Exploring the Benefits of Studying Entrepreneurship: Who, What, and How - Essay Sample

Introduction

The last few decades have been characterized by increased global interest in entrepreneurship by institutions and individual theorists. The recognition of small firms is largely a result of their positive contribution to the growth of a vibrant and progressive economy. Nevertheless, in the past, scholars have implicitly and explicitly wondered why one would study entrepreneurship leading to questions on specific entrepreneurship terms. These include who are entrepreneurs, what they do, how they do things the way they do, why they do things the way they do, and where they do it. However, all scholars agree that entrepreneurship is a nexus of the availability of enterprising individuals and lucrative opportunities. The paper seeks to delineate the creation and discovery contexts of entrepreneurial opportunities and the dimensions of entrepreneurial orientation.

Is your time best spent reading someone else’s essay? Get a 100% original essay FROM A CERTIFIED WRITER!

Save 25%

Creation and Discovery Contexts of Entrepreneurial Opportunities

Entrepreneurial opportunities can be defined as the situations that arise in which new goods, services, raw materials, and methods of the organization could be introduced in the market and sold a higher price than their cost of production (Shane & Venkataraman 2000). It is for this reason why entrepreneurs look for emerging chances through which they can create future goods and services through the process of discovery, evaluation, and exploitation. Entrepreneurial opportunities are usually treated as objective, although not all agents are aware of their existence. Entrepreneurial opportunities, however, are different from profit opportunities in that they include value creation through the means-ends framework (Lewin 2013). It is unlike profit opportunities whose focus is value creation through enhancing the efficiency of production.

Although the concept of opportunity dominates in theories of entrepreneurship and economics, the source of these opportunities raises a debate. The debate pertains to whether opportunities are created or discovered. Opportunity discovery is situations that arise in which new goods, services, markets, raw materials, and methods of the organization could be introduced (Eckhardt & Shane 2003). Their introduction, in this case, is through the formation of new means, ends, or means-ends relationships. Therefore, by definition, opportunity discovery is based on the assumption that entrepreneurial opportunities are situations by which one can come up with new combinations to produce economic value. Consequently, the elements that are used to create these situations are assumed to exist already. Opportunity creation, on its part, is a set of beliefs, actions, and ideas that make it possible for the creation of future goods and services when they do not have a current market for them (Sarasvathy et al. 2003). In this case, the assumption is that opportunities arise from a combination of perceptions and behaviors as people try to create new economic artifacts.

Similarities Between Opportunity Creation and Opportunity Discovery

Opportunity creation and opportunity discovery are similar in that they arise from competitive market imperfections. Incomplete information about products and prices is an example of the market imperfections, and here, in opportunity discovery, the main focus, in this case, would be exploiting this chance of lack of information to set price and introduce products. Similarly, creation would involve risking by setting a price and introducing a product anticipating future success (Klein 2008). The other similarity is that both go through the evaluation and exploitation process. In both creation and discovery, the first process is to evaluate the situation and, after that, decide where to exploit to own advantage. The other similarity is that both opportunity creation and discovery have similar drivers in their opportunity model. For instance, the desire to create something new, making a difference, making revenue, among others, drives both opportunity discovery and opportunity creation.

Differences between Opportunity Creation and Opportunity Discovery

One of the differences is that whereas opportunities discovered can arise from exogenous shocks such as market changes, created opportunities do not exist independently of social construction. Created opportunities can only occur through social interactions and human imaginations, and this is usually a continuous process (Alvarez & Barney 2007). The other difference is that discovery is objective, and creation is subjective, and this is so because the former relies on hard facts as opposed to the latter that is largely based on perspectives and feelings. The other difference is that opportunity discovery is independent of the actions of the entrepreneur, unlike opportunity creation that depends on the actions and reactions of entrepreneurs. Additionally, creation deals with uncertainty because the entrepreneur is focused on introducing something new that does not have an existing market. On the other hand, discovery involves looking for possible changes, and therefore an entrepreneur here deals with risks (McMullen, Plummer & Acs 2007).

Opportunity Exploitation

Opportunity exploitation implies activities conducted by an entrepreneur to exploit a potential entrepreneurial opportunity to gain economic returns (Wiklund 2015). There are numerous ways through which an entrepreneur can exploit opportunities. One of these ways is making use of new technologies. For instance, in the current COVID-19 pandemic, people have shifted their shopping online (Craven et al. 2020). An entrepreneur could exploit this technology to its advantage by selling online. Also, businesses can exploit opportunities by exploring new business models, attract new customers, increase customer loyalty, and even expanding through strategies like acquisitions and mergers (Ge et al. 2016).

Strategies That Can Be Used in the Effective Exploitation of Opportunities

Collaborations/Alliance Formation

Firms can exploit opportunities in the form of forming business alliances. These include temporary mergers, permanent mergers, and acquisitions that help the business to possess a collaborative advantage (Siren, Kohtamaki & Kuckertz 2012). These alliances are beneficial in several ways, including reducing and eliminating competition, creating a wide pool of resources, and granting a firm a pool of customers and the factors contribute towards a collaborative advantage.

Making Use of New Technologies

Technologies are dynamic, and a business is expected to move as the technology advances. Usually, customer trends change with technology, and therefore adopting new technology will ensure that the firm captures the needs and interests of the customers. A company can, therefore, exploit this opportunity by satisfying arising customer needs using their new technology, and this will always give it a competitive edge over its competitors (Siren, Kohtamaki & Kuckertz 2012).

Marketing

Marketing can be used successfully by firms to exploit market opportunities. An opportunity to exploit a business opportunity would entail expanding the customer base, and this is possible through effective marketing. A firm can explore new markets even beyond its sector or established market. This will open up business opportunities as it will open up sales channels, which will be captured through effective marketing and promotion strategies.

Entrepreneurial Orientation

Entrepreneurial orientation is critical for business managers who are crafting something new with the target of exploiting opportunities that their rivals are not able to exploit. Entrepreneurial orientation can be understood from five dimensions, including innovativeness, autonomy, risk-taking, proactiveness, and competitive aggressiveness (Jeremy, Dave & Janice 2014).

Innovativeness is the tendency to pursue creativity. Usually, some innovations are done to create incremental improvements, and thus they depend on existing skills, and other innovations are radical such that they require brand new skills. Autonomy is the determination of the level of freedom in an organization for allowing workers to come up with new ideas and implement them (Jeremy, Dave & Janice 2014). Risk-taking, on its part, is the tendency of an organization to take bold actions as opposed to implementing cautious ones. Proactiveness as dimension is the tendency to implement plans to deal with the anticipated future rather than acting on events as they unfold (Jeremy, Dave & Janice 2014). Competitive aggressiveness is the tendency to taking down competitors rather than acting in the way of avoiding them.

Throughout my life, I have noted that my attitudes and behaviors are consistent with autonomy, proactiveness, and competitive aggressiveness. Autonomy can be explained as the freedom of allowing people to bring a new idea to fruition without limiting the development through bureaucracy (Boso, Story & Cadogan 2013. Autonomy is well reflected in my career. As a little child, I always yearned to become a business CEO, and I followed this dream with no one trying to sway me against it. I had the freedom to choose a career path, and this is autonomy. Proactiveness, on its part, is the tendency to anticipate and act on future needs instead of reacting when things occur (Wang, Thornhill & De Castro 2017). I was the first student in my class to choose a business administration course even when other students were reluctant to choose it. Being proactive in this case means being willing to take on a course that others thought was not the most ideal. I also set up a smoothies shop near our school, and this was at a time when many business owners were closing their shops for incurring losses. In this case, I was proactive as I embraced opportunities that others feared. Competitive aggressiveness it the tendency to take competitors directly rather than attempting to avoid them, and it is a phenomenon that can be reflected in my job-seeking experience. I have the tendency to seek the best business administration jobs, and I always compete with the best for these positions.

References

Alvarez, S. A., & Barney, J. B., 2007, 'Discovery and creation: Alternative theories of entrepreneurial action', Strategic entrepreneurship journal, 1(12), 11-26.

Boso, N., Story, V. M., & Cadogan, J. W., 2013, 'Entrepreneurial orientation, market orientation, network ties, and performance: Study of entrepreneurial firms in a developing economy', Journal of Business Venturing, 28(6), 708-727.

Craven, M., Mysore, M., Singhal, S. and Wilson, M., 2020, COVID-19: Implications for business, McKinsey & Company. Available at: https://www.mckinsey.com/business-functions/risk/our-insights/covid-19-implications-for-business [Accessed 4 May 2020].

Eckhardt, J. and Shane, S., 2003, 'Opportunities and Entrepreneurship', Journal of Management, 29(3), pp.333-349.

Ge, B., Sun, Y., Chen, Y. and Gao, Y., 2016, 'Opportunity exploitation and resource exploitation', Internet Research, 26(2), pp.498-528.

Jeremy, S., Dave, K., & Janice, E., 2014, Mastering Strategic Management: 1st Canadian Edition. BCcampus.

Klein, P., 2008, 'Opportunity discovery, entrepreneurial action, and economic organization', Strategic Entrepreneurship Journal, 2(3), pp.175-190.

Lewin, P., 2013, 'Entrepreneurial opportunity as the potential to create value', The Review of Austrian Economics, 28(1), pp.1-15.

McMullen, J., Plummer, L. and Acs, Z., 2007, 'What is an Entrepreneurial Opportunity?', Small Business Economics, 28(4), pp.273-283.

Sarasvathy, S. D., Venkataraman, S., Dew, N., &...