CHAPTER TWO
LITERATURE REVIEW
2.1 Theoretical Framework
Theoretically, several literature have considered entrepreneurial orientation and its relationship with corporate performance in Europe, Africa and Nigeria, Dess and Lumpkin (2005); Lyon, Lumpkin and Dess (2000); Wiklund and Shepherd (2003a) conducted a study on the relationship between entrepreneurial orientation (EO) and performance moderating effect on the nature of environment other characteristics. Therefore, the study shows that there is a direct relationship between entrepreneurial orientation (EO) and performance, suggesting that this relationship may be moderated by characteristics such as the nature of the environment or other organizational factors. The meta-analysis conducted
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These theories have their roots in economics, psychology, sociology, anthropology and strategic management. The multidisciplinary nature of entrepreneurial management is given a close examination in this thesis.
2.1.1 Economic Entrepreneurial Theories
The economic theory to entrepreneurial orientation has been well focused on the outcomes of new entrepreneurial creation (Schumpeter, 1934). The economic theory has examined the profitability or growth of organizations in evaluating their entrepreneurial environment. The economic entrepreneurial theory has deep roots in the classical and neoclassical theories of Economics. These theories explore the economic factors that enhance entrepreneurial dimensions. Economic theory includes the following: the classical theory, Non-classical theory and innovation theory.
2.1.2 Classical
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The trait theory is an enduring inborn qualities or potentials of the individual entrepreneurs that naturally make him an Entrepreneur or have entrepreneurial skills. The obvious or logical question on mind may be “What is the exact trait or inborn qualities? However, this theory gives some insight into these traits or inborn qualities by identifying the characteristics associated with the entrepreneur? The characteristics give a clue or an understanding of these traits or inborn potentials. In fact, explaining personality traits means making inference from
Entrepreneurs rapidly understand the commercial environment of markets. Economy is driven by markets, if demand is elevated extra work needs to be done and production increases. There is an additional demand for new and better products and services as the demand for it increases. Entrepreneurs are quick to exploit market opportunities and its potential. A successful entrepreneur considers the chances of success within the economic context. More factors such as culture, labour, work force, infrastructure and trade regulations are also considered when exploiting an opportunity.
Analysis Effective entrepreneurship requires tangible and intangible resources; however, it is the quality of the entrepreneurial
Hisrich, R.D. and Peters, M.P., (2004) Entrepreneurship, Fifth Edition – International Edition, McGraw-Hill Higher Education
The corporation realization of entrepreneurial goals requires, for its success, adequate, even high-quality management inputs. Many of these management inputs involve specialist knowledge of functional areas. The proportion of entrepreneurs and managers required within an enterprise, or indeed the desirable blend of these characteristics within the same individuals, can vary markedly.
Basing on the multiple cases study model, we listed and compared the entrepreneurial history of every firm to identify the strategy and actions implementation by the firm and represent how the Effectuation theory guided the entrepreneur ‘do the right things’. Finally, we draw tables for each form to conclude and analyze those data and information ordered by the time line (Freeze & Glassman, 2000; Reid, 1999).
Entrepreneurial mindset is when an individual is attracted to new opportunities and creative innovations and is willing to take that leap of faith and all the risk and doubt that comes with making that decision ("Entrepreneurial Mindset Definition from Financial Times Lexicon," n.d.). Everyone thinks they can become that successful entrepreneur but without a strong- minded personality and the ability to handle frustrating situations the odds are not in your favor. According to Emerson (2015), there are seven ways to foster that mindset needed, always keep a positive attitude even in the most difficult times, learn from mistakes and keep going, do not get lost in the crowd by being safe, accept life-long learning, set reasonable and achievable
Joseph Schumpeter, an American economist, renowned for his term ‘creative destruction,’ defined ‘entrepreneurs as individuals who exploit market opportunity through technical and/ or organisational innovation.’ Entrepreneur is derived from the French verb ‘entreprendre,’ meaning to undertake and consequently entrepreneurship is the ability and will to develop and manage a business scheme; accompanied by any of its risks with the intention of making turnover. Conversely, innovation is the process of transforming a creation into a product or service that generates value; ‘the commercially successful exploitation of ideas.’ It is integral to any developing economy, particularly in those where prevailing business models have become outmoded. Entrepreneurship
Strategy Entrepreneurship is the integration of strategic management and entrepreneurship. Strategic management involves activities taken to create sustainable competitive advantage and earn wealth while the latter i.e. entrepreneurship, involves the identification and exploitation of opportunities. The marriage of the two, “strategic entrepreneurship” is defined as the integration of opportunity-seeking behavior (entrepreneurial) and advantage-seeking behavior (strategic) in creating well above-average returns for owners as well as value for customers (Hitt & Ireland, 2005).
There are several theories has been developed by different scholars for entrepreneurship development since couple of decades. A consistent universal theory does not present in entrepreneurship, but rather it contains of several approaches such as economics, psychology, sociology, anthropology, regional science. All theories has explored the rationality with the emergence of new entrepreneurs and theirs contribution in socio-economic development of a country (Sexton, 1997). Many of these studies assume that all entrepreneurs are similar including the owner of small enterprises and high growth innovative ventures. The following section some of theories explained and finding the literature gap and selecting the appropriate theory for this study.
When embarking on a new venture, managing and existing business or trying to increase the success of a company, it is important to be aware that entrepreneurships not just about being innovative and taking chances.
In the era of hypercompetitive business economy and high increasing market environments, the role of and attention to corporate entrepreneurship have escalated highly throughout the world. Not only small business ventures are considerably into creating new opportunities, adaptable natures, helpful philosophies and undiscovered approaches along with entrepreneurship ethics, but also huge corporations feel the need for the aids of improved and advanced corporate entrepreneurship owing to either small or enormous circumstances in the competitions. There are different kinds of internal and external forces that create a need for corporate entrepreneurship, and they will be discussed thoroughly below. The recent business practices have implied that the need for newly innovative entrepreneurial management is on the increase. However there are some possible and unforeseeable obstacles to inhibit corporate entrepreneurship to flourish.
One of the controversies is relating to their behaviour. Among others is entrepreneurial motivation, which is an output of a variety of environmental factors as well as the founder’s individual characteristics (Suzuki et al. 2002). Oakey (2003) further elaborated that motivation shapes the attitude of the entrepreneur towards his chosen mix of business management skills, the amount of external resources accessed and the level of personal control that he or she exercises on running the business. Abetti (1992) detailed key social factors that affect entrepreneurial behaviour: family and social support system, financing sources, employees, customers, suppliers, cultural, political as well as economic environment.
Schumpeter (1911/1934, 1928) believed entrepreneurs were hero figures which had the ability to become innovators and identify opportunities. Knight (1921) described an entrepreneur as someone who is willing to take risk to attain profit as a reward. Drucker (1974) was considered the “father of modern management”; he stated entrepreneurial management and strategies along with innovation are crucial to making the future or into a different business. Kirzner (1973, 1979, 1997 and 1999) identified that entrepreneurs play the role of spotting opportunities and being creative. More recently Ely and Hess in 1983 created a four-factor model which consists of entrepreneur, capital, labour and enterprise, this model was made to understand entrepreneurship in depth. From this we can see that over time some of the key scholars have disparate approaches regarding entrepreneurship and how a foundation platform has progressively been advanced into academic
It is true that most entrepreneurs typically have a flair for the creative and a lot of energy. They are born with it. But having these characteris...
Being a student of success you will find there are varying traits but consistent ones, that lean toward success. It is your personality, your inner drive that will make you successful. Once you identify those traits, your journey as an entrepreneur will lead to success. Here now is THE list. See what you have and what you will need to acquire to achieve: