Business Essays Entrepreneur Education Natural

Business Essays Entrepreneur Education Natural Entrepreneur Education Natural Introduction The intention of this paper is to discuss whether entrepreneurs are born, that is, they have inherent, natural in-born endowments to become and succeed as entrepreneurs or they are the products of the art and the science of entrepreneurship that they have been taught in schools and colleges. This, of course, is not a new controversy; it has been debated for a long time and by different people from different backgrounds. Some aspects of this debate are discussed below in the review of the literature on the subject. It is tempting, no doubt, to follow in this matter of the debate too, Alexander Pope’s advice on the forms of government and get on with a discussion and analysis of the concept and implications of entrepreneurship without tarrying to find an answer to the query whether entrepreneurship is a god-given attribute or a man-made artefact. However, it is found prudent and even somewhat necessary in the matter of discussing the topic of this essay, to follow the sage dictum attributed to the amiable character, Sir Roger de Coverly of Addison’s Essays, that â€Å"much may be said on both sides of the question† . Much indeed can be said about the qualities of entrepreneurship being implanted in a person by Nature herself as in the case of Sir Alan Sugar in UK or Ophrah Winfry in USA. And much also can be said to counter this view with many examples of outstanding ‘entrepreneurial’ achievement by college-educated ‘entrepreneurs’. In a few paragraphs below we verify these points of view with some select appropriate examples. Entrepreneurs by natural endowments The US is a land of entrepreneurs. ‘From Benjamin Franklin to Ben Jerry, William Penn to Bill Gates, Eli Whitney to Oprah Winfrey, famous entrepreneurs, both historical and contemporary, offer insight and inspiration through their stories’. The discoverers of the American continent themselves were ‘entrepreneurs’ of a high calibre. It is not necessary to take any stand on a dispute whether it was Christopher Columbus or Amerigo Vespucci who discovered America, for both of them were in-born entrepreneurs. The hall-mark of an entrepreneur commonly accepted by ‘economist writers’ on the subject is the propensity of the person to start and manage an enterprise, with great risk and uncertainty being constant, in-built companions as it were, of the enterprise from the very moment of its commencement and later all throughout its journey towards achievement – a kind of risk incorporating within itself the possibility of losing one’s name, reputation, may be one’s entire wealth and friends, and even life itself. Cassen remarks that: â€Å"According to Cantillon the entrepreneur is a specialist in taking on risk. He insures workers by buying their products (their labor services) for resale before consumers have indicated how much they are willing to pay for them. The workers receive an assured income, while the entrepreneur bears the risk caused by price fluctuations in consumer markets. This idea was refined by the U.S. economist Frank H. Knight, who distinguished between risk, which is insurable, and uncertainty, which is not. Risk relates to recurring events whose relative frequency is known from past experience, while uncertainty relates to unique events whose probability can only be subjectively estimated† (Casson). Knight is said to have postulated that while the entrepreneurs can lay off risks much like insurance companies do (with their ‘law of large numbers’), they have to bear the uncertainties themselves. They are prepared to do this because the profit of the enterprise compensates them for the psychological costs involved. Casson goes on to say that Joseph Schumpeter took a different approach, emphasizing the role of innovation. â€Å"According to Schumpeter, the entrepreneur is someone who carries out new combinations by such things as introducing new products or processes, identifying new export markets or sources of supply, or creating new types of organization. Schumpeter presented a heroic vision of the entrepreneur as someone motivated by the dream and the will to found a private kingdom; the will to conquer: the impulse to fight, to prove oneself superior to others; and the joy of creating.(Casson) This ‘dream and vision’ attribute of a Schumpeterian entrepreneur to found a ‘private kingdom’ all his own seems to be a latter day echo of Marx-Engel’s version of the entrepreneur (‘the bourgeois’), ‘who cannot exist without constantly revolutionizing the instruments of production and creating such an abundance of wealth, to get rid of which â€Å"he is in search for new markets by conquest and/or by the more thorough exploitation of the old ones†. â€Å"The need of a constantly expanding market for its products chases the bourgeoisie over the whole surface of the globe. It must nestle everywhere, settle everywhere, establish connections everywhere† (Marx Engels). The burden of the argument in this paragraph has been that an entrepreneur is a person who takes the risks of failure of an enterprise and by analogy enjoys the benefits from its success. The proclivity to take risk and accept its consequences either for good or bad is largely a natural inclination, and not come by from pouring over voluminous pages of treatises on management. That entrepreneurship is inborn is exemplified by the life history of the famous Sir Alan Sugar. As the story of his life well known, it does not merit repetition here. But what does merit mention here is the overwhelming substantiation of the proposition that entrepreneurial talents are inborn and not induced by school or college learning in a survey conducted by the Northeastern Universitys School of Technological Entrepreneurship. Leslie Taylor reports that according to the survey conducted by the School, â€Å"nearly two-thirds of entrepreneurs claim they were inspired to start their own companies by their innate desire and determination, rather than by their education or work experience. Only 1 percent of more than 200 U.S. entrepreneurs surveyed cited higher education as a significant motivator toward starting their own venture, while 61 percent cited their innate drive. Other motivators cited were work experience (21 percent) and success of entrepreneurial peers within their industry (16 percent). Thirty-three percent of respondents launched their first venture between the ages of  18 and 30; 13 percent between 30 and 40; and only 12 percent started their first business after the age of 40† (Taylor). The Survey also shed some light on the psychological trait of ‘risk’ on which a heavy weight has been laid in the context of entrepreneurship. The survey found that â€Å"that the majority of entrepreneurs were confident about the success of their first venture. Thirty-two percent said they had no fear that their venture would not succeed, while 42 percent had some fear but characterized themselves as confident. Only 14 percent said they experienced significant fear that their first venture would fail, while 12 percent said fear of failure delayed their leap into entrepreneurship† (Taylor). The survey findings are significant in so far as they indicate that the innate desire to become an entrepreneur cannot generally be taught; however, what may be called ‘the entrepreneurship skills’ can be taught, to a consideration of which I turn now. Skills required for an entrepreneur It has been mentioned above the entrepreneurship requires certain skills. In this section I propose to discuss some of the skills usually considered as being necessary for one to become a successful entrepreneur. It is a truism to say that getting a business off the ground successfully requires a combination of a sound business concept, skill, effort, and timing. Apart from the purely idiosyncratically individualistic factors that may motivate one to launch oneself as an entrepreneur, it has been noted that successful entrepreneurs normally have a number of similar skills and characteristics. Colette Henry et al citing Hisrich and Peters (1998) categorize the various skills required by entrepreneurs as follows. â€Å"Technical skills: includes written and oral communication, technical management and organizing skills. Business management skills: includes planning, decision-making, marketing and accounting skills. Personal entrepreneurial skills: includes inner control, innovation, risk taking and innovation. In addition, Hisrich and Peters (1998) stress that the development of particular skills, namely inner control, risk taking, innovativeness, being change oriented, persistence and visionary leadership, differentiates an entrepreneur from a manager† (Henry 2005). Specifically these skills include, first the â€Å"Product/expertise†, that is to say, in order to start, survive and flourish, all businesses need a product that is in demand. The would-be entrepreneur needs to have the know-how and industry-specific knowledge of product or service he or she is proposing to provide. He/she should examine what is unique about them, about their product or service, and the experience they have gained throughout their career; and how they can present all these to potential clients so that they see the value of what the entrepreneurs have to offer. Strong motivation to achieve is an essential â€Å"skill† for an entrepreneur. Working for oneself requires a great amount of dedication, discipline and drive. One must be able to get to work every morning without the support frame-work of a demanding boss or hustling co-workers to keep one going. Another skill requirement is that of marketing and sales. However much one is competent technically, one will have to market and sell oneself. This requires a large measure of self-confidence not just in one’s technical skills but in one’s ability to find and land assignments as well. It will be necessary to get potential clients to believe that one is the best person for this task even before one will get a chance to show off one’s technical competence. It is essential for one to have the confidence that he or she is the person who can deliver the special product that meets their customers needs. ‘Integrity and follow-through’ is another skill that is indispensable for an entrepreneur to succeed. The commitments and promises made to the consumers should be fulfilled honestly and promptly at or before the time when they have been promised to be done and according to the promised quality specifications. Any deviation from such promises should be made known to the client well in advance, in any case before the deadline arrives. This skill is an important key in building a successful business practice because a happy and satisfied class of customers help to build and enlarge the domain of one’s business. Another skill required is communication skills. Oral and written communication skills are required for networking, marketing, sales presentations, project proposals, project/client management and documentation of the finished product. If one is unable to convey thoughts clearly and concisely in conversation and in writing, it is apt to reduce one’s effectiveness as a professional. Associated with the communication skills that a would-be-entrepreneur is expected to have, are the interpersonal skills that he/she should posses. The ability to work with people at all levels of authority and status and all types of persons within one’s company is considered a critical requirement for success in getting projects and doing them in a timely manner. Another required skill is professionalism. The dictum that first impressions are important is to be taken as a statement of fact, because first impressions do really count. It will do a lot of good to the company if the entrepreneur’s appearance and behaviour make a terrific statement about the high quality of work they can expect from the company. An entrepreneur’s appearance is part of his or her marketing package. They should avoid giving people reasons to complain or think less of them. That an entrepreneur should have a healthy relationship with money sounds like ‘carrying coal to Newcastle’ because the popular perception is that he or she is out there to make money. It need not be so, because the ‘attitude to money’ is a ‘skill’ that has to be inculcated. Money is one of the means for living well; it should not be the â€Å"be-all-and-end-all† of business. ‘If youve started your business just for the money, you may at some point find yourself hating what you do and feeling trapped’ is a verifiable statement. Prudence would dictate that a business person should treat the money that flows through his or her business with respect or hire someone reliable who will do this for them. Planning skills is yet another skill expected of an entrepreneur. Apart from planning out how to tackle the technical problems of the project, the entrepreneur will need to provide time-estimates for pricing quotes to get business and plan his or her days and weeks effectively to meet the delivery schedule they have committed to. A skill that is important for an entrepreneur is the ‘problem solving skill’. An entrepreneur has to tackle many problems in different shapes and sizes. Right from the classical days of Cantillon, the capacity for judgement has been reckoned as a necessary skill for an entrepreneur. If one furrows the business area as a ‘lone wolf’, one may not have a colleague around to bounce ideas off or a buddy in the next cubicle for quick answers. One has to handle the challenges on one’s own with the resources available, and with the skills that one has been naturally endowed with and also with the skills acquired from one’s years of learning of the art and science of entrepreneurship from schools and colleges (4D Consulting Center). The presumption here is that the skills of an entrepreneur listed in this paragraph can be taught in schools and imbibed by discerning students. This aspect of the matter, that is, whether these skills and qualities can really be taught is examined in the section immediately following this. In the subsequent sections detailed analysis and discussion of the different programmes and content of entrepreneurial education and training are proposed to be made. In the course of discussion of these aspects of education and training, it is also proposed to incorporate a review of the literature pertaining to the specific topic of discussion in that section. Can entrepreneurship really be taught? Can entrepreneurship really be taught is a question that is still debated among some academicians and also practitioners of the ‘profession’. But disregarding the debate, entrepreneurship education has been offered by educational institutions and been a sought-after course of study by many people over the last couple of decades (Sexton et al., 1997). Some countries have developed courses in â€Å"what can be broadly termed the field of enterprise and entrepreneurship education in schools and colleges† (Gibb 1993b). In the UK, for instance, specific kinds of programmes regarding the â€Å"concept of enterprise† sponsored by both the public and private sectors were developed in the 1980s (Gibb 1993b). At the university level, under the Enterprise in Higher Education Initiative, courses were hammered out for training in â€Å"interpersonal† and â€Å"enterprising† skills. It was realised that general skills, on their own, were probably not sufficient for developing entrepreneurial traits. Gibb has pointed out that, in order to avoid confusion, it is particularly important â€Å"to clarify notions of the relationship between enterprise, entrepreneurship, business skills and personal transferable skills in developing an approach to entrepreneurship education† (Gibb, 2000). In one of his previous works Gibb has differentiated between entrepreneurship, enterprising behaviour and small business management (Gibb 1987a). He defined the entrepreneur in terms of attributes, and the small business manager in terms of tasks. In the US, entrepreneurship education is provided not only by the universities, but also by private consultants and trade associations (Sexton et al 1997); and their contribution in the area of entrepreneurship education has been on the increase in recent times. In addition, research in the area is growing (Gibb 2000). Research has been particularly on the increase at empirical levels in the areas of educational process and structure (Gorman et al 1997). Gorman and colleagues also report that their findings indicate that entrepreneurship can be taught, or if not taught, at least developed by entrepreneurship education. This is in conformity with the findings of a survey in which US University professors were of an overwhelmingly consensus view that entrepreneurship can be taught (Vespers 1982). The same view was found to prevail among a group of 408 entrepreneurship students in Ontario, Canada, who believed that the majority of entrepreneurial traits and abilities can be taught, with abilities seen as being more teachable than traits (Kantor 1988). An important opinion that has been expressed is that entrepreneurship being both a ‘science and an art’, it is possible to teach the ‘science’ part of it because it involves skills of the business management job amenable to be taught through the conventional pedagogical approach, while the ‘art’ part, which relates to the inherent and innovative attributes of entrepreneurship, does not appear to be teachable in the same way (Jack and Anderson 1998). A similar view is expressed by others, Saee (1996) for instance, who suggest that some individuals are naturally talented, whilst others must work hard to achieve the same kind of objectives. Saee is of the view that a curriculum cannot create an entrepreneur, rather it can only demonstrate the process necessary for being successful. The individual will always be responsible for their own success (Saee (1996). This distinction between the ‘science’ and ‘art’ of entrepreneurship seems to have stood in the way of developing a holistic programme of entrepreneurship education. Collette Henry et al say that these critics see â€Å"science as something that is selective, analytical, sequential and fixed while they describe art as generative, provocative, jumping and without constraint. While they do not suggest that the essence or art of entrepreneurship is completely unteachable, they propose that this area has been largely neglected by those involved in delivering entrepreneurship and business courses† (Henry, Colette et al). It is incumbent on schools and colleges to develop ‘teachable modules’ of entrepreneurial attributes, incorporating in them the ‘science’ and the teachable part of the ‘art’ of the profession. â€Å"The challenge for entrepreneurship teachers and trainers†, say Henry et al, â€Å"is to find innovative learning methods that coincide with the requirements of potential entrepreneurs† (Henry et al). Training and instruction in entrepreneurship, either in its ‘science’ component or its ‘arts’ component, or in both need not be confined to schools and colleges. They can be done through ‘on-the-job methods’ as has been demonstrated by the Minnesota Mining and Manufacturing Company (3M). The 3M Company is 106 years old as of 2008, but is still leading the list of world’s top-ranking ‘innovative’ companies. Innovation, as explained above is a distinguishing mark of entrepreneurship. If a metaphor can be used here: ‘innovation is in the blood of the 3M company’. The first tenet of the company is that from the chief executive on down, the company must be committed to innovation. It is acknowledged that in the present age innovation is impossible without a broad base of technology. 3M claims to have leading know-how in 42 diverse technologies. That allows researchers to take an idea from one realm and apply it to another (Arndt). In earlier times 3M’s innovation success relied on long-term, individually directed exploratory research projects. Now it is usually the result of team work. One such team work project is called the Lead User System, which has reliably produced profitable new products, services and strategies for 3M. â€Å"It does this at a rate that beats the natural odds. Lead User Teams are made up of four to six individuals with a diverse set of skills from both technical and marketing areas. Depending on its focus, a team may have members from procurement, manufacturing or any other functional area. All team members are taught techniques for creating profitable solutions to unarticulated customer needs, well in advance of the competition. Lead User Teams are told to welcome ambiguity and uncertainty. They are taught to set their sights on exploring the areas where the possibilities for discovery are greatest because the pre-existing knowledge is most slim. The teams must learn to recognize these gaps in understanding as prime locations for generating new products and concepts. The teams are shown how to seek, value and protect ideas that don’t reflect business as usual, be it new technologies, applications, strategic relationships, channel partnerships, or service offerings. Team members start by getting acquainted with what we don’t know; they then work to increase their knowledge base at a greatly accelerated pace, primarily through their contacts with ‘Lead Users’ and ‘Lead User Experts.’ The Lead User System achieves success by approaching innovation in a disciplined way. The teams go through a set of phases, retrieving information from specific sources and then collaborating with these sources to create new products, services and strategies† (Shor, Rita). From the discussion in this section, it is clear that that it is possible to teach the skills, the ‘scientific’ nuances and even aspects of the ‘art’ of entrepreneurship, and that it can be done in schools and colleges and also outside them. Teaching Entrepreneurial Skills Colette Henry and colleagues specify at least four circumstances that have compelled, so to say, entrepreneurs and even others who have something to do with business and the economy to familiarise themselves with the tenets of ‘entrepreneurial/business’ theory. They say: â€Å"At the global level, the reduction of trade barriers and the reality of the Euro currency, together with the advancements in telecommunications, technology and transportation, all combine to provide more opportunities, as well as more uncertainty in the world. At the societal level, privatisation, deregulation, new forms of governance, mounting environmental concerns and the growing recognition of the rights of minority groups are all presenting society with greater complexity and uncertainty. At the organisational level, decentralisation, downsizing, re-engineering, strategic alliances, mergers and the growing demand for flexibility in the workforce, all contribute to an uncertain climate. Finally, at the individual level, the individual is now faced with a wider variety of employment options, the probability of ending up with a portfolio of jobs, more responsibility at work and more stress. Given the above, it is apparent that, at all levels, there will be a greater need for people to have entrepreneurial skills and abilities to enable them to deal with lifes current challenges and an uncertain future. Furthermore, whatever their career choice or personal situation, individuals, will be able to benefit from learning an innovative approach to problem solving; adapting more readily to change; becoming more self-reliant and developing their creativity through the study of entrepreneurship. There is no doubt that in any economic climate such learning could have far reaching benefits for society. It could be argued, therefore, that the need for entrepreneurship education and training has never been greater than now† (Henry, Colette et al). The consensus arrived at on â€Å"the need for entrepreneurship education and training has never been greater† has not percolated to the particulars of organising this kind of education and training. For instance, for Gorman et al (1997) the ‘educational objectives, subject matter and pedagogical approach might be expected to vary depending on the nature of the target audience’, while for others such as McMullan and Long (1987), Monroy (1995), OGorman and Cunningham (1997) and others the training needs of an individual will vary according to the particular stage of development of the enterprise such as awareness, pre- start-up, start-up, growth and maturity. A three-category framework for organising entrepreneurship education has been put forward by Jamieson (1984). His categorisation is in terms of â€Å"education about enterprise, education for enterprise and education in enterprise†. The role that education has to play in threes three categories is different. In the first category, education about enterprise, education has to deal mostly with awareness creation, provide information on the various aspects of setting up and running a business mostly from a theoretical perspective. The business and related modules in this category at all levels of collegiate education seek â€Å"to foster skills, attitudes and values appropriate to starting, owning, managing or working in a successful business enterprise† (Jamieson, 1984). Jamieson’s second category, education for enterprise, is concerned with providing the would-be entrepreneurs for a self-employment career, with the intellectual tools specific to setting up and run their own business. ‘Participants are taught the practical skills required for small business set-up and management, and the courses are often geared towards the preparation of a business plan.’ The third category, education in enterprise, is designed for imparting management training to established entrepreneurs and focuses on ensuring the growth and future development of the business. Management development and growth training programmes, and also specific product development and marketing courses, are in this category. Training in this category also provides skills and knowledge for people to create their own futures and solve their own problems (Jamieson, 1984,). Garavan and OCinneide (1994) emphasise more on the education and training for small business entrepreneurs, classifying the type of training that they might receive into three categories, which relate specifically to the particular stage of development. The first of these is termed small ‘business awareness education’ and is normally found in secondary school syllabi. The objective of this type of training is to encourage people to consider small business as a career option. The second category describes education and training for owners of small business, its aim being to provide practical help to those seeking to change over to self-employment. The content of training here would include instruction on raising finance, marketing the product and matters of legal issues. The third kind of education and training in respect of small business is meant to enable people to enhance and update their skills. The content of entrepreneurship programmes Entrepreneurship educators have identified that there are two objectives of entrepreneurship education programmes, which are 1) to increase the awareness and understanding of the process involved in starting and, 2) managing a new business, as well as to increase students awareness of small business ownership as a serious career option. At the initial stage of entrepreneurial development the need is to inculcate, as far as it is feasible, a sense of readiness and capability to venture into the realm of entrepreneurship. Instruction at this stage, therefore, should provide opportunities to act in an ‘entrepreneurial’ manner, as well as an exposure to several real-life entrepreneurs (Cox 1996). Life-history of truly successful entrepreneurs might serve as a ‘guiding-star’ in the students’ journey towards reaping the benefits of entrepreneurship. The song of the poet that â€Å"Lives of great men remind us/ We can make our lives sublime/.And, departing, leave behind us Footprints on the sands of time† (Henry Wadsworth Longfellow, 1807-1882) should be made to resound in their mind frequently. The main focus of training at the start-up stage should be to intensify students resolve to become entrepreneurs. Accordingly instructional emphasis should be on the development of a viable business plan which should be supported by individualised assistance in the form of financing, networking, or counselling. It is advisable to assist the students in developing their personal characteristics of leadership; promoting and strengthening their willingness to invest a significant portion of their savings or net worth to get their business started; inculcating and hardening their confidence in themselves and their abilities to sustain themselves in business, if or when things get tough; prodding them to make their own decisions; advising them to adjust their standard of living at a lower level, if necessary, until their business is firmly established; to acquire the traits of a team-player and be willing to commit themselves to long hours of work to make their business work. Hisrich and Peters (1998) examined entrepreneurship programmes from the students perspective. The students were found to be keen to have in the course content the essentials of marketing, finance, operations planning, organisation planning and venture launch planning. They also wished to include as an essential part of the Course all information concerned with obtaining resources. To find out topics considered to be most important by prospective students, Le Roux and Nieuwenhuizen (1996) conducted a survey of 220 aspiring entrepreneurs. Their survey revealed that the main areas of interest were practically the same as those mentioned by Hisrich and Peters (1998) and included marketing, entrepreneurship, business planning, management and financial management. From the discussion in this section, it is apparent that the content of the a course on entrepreneurship need to include topics considered as being relevant to the ‘science’ part of the discipline as also those that would serve to enhance the ‘art’ component of the discipline. In the following section, I propose to discuss the methods of teaching entrepreneurship. Methods of teaching entrepreneurship The literature on the learning methods employed in entrepreneurship education and training programmes mentions a variety of methods, including lectures, video presentations and handouts, case study-based learning, seminars, group discussion and role-plays. Additionally, mention is also made about both traditional and non-traditional approaches to learning. Traditional methods are said to focus mainly on theory and a didactic approach and some writers are critical of their adoption as a teaching method, because in their view they are ‘inappropriate’ in the teaching of entrepreneurship (Davies and Gibb 1991). This view is endorsed by others, Young (1997) for example, who say that a theoretical approach is not relevant to teach a subject which deals almost exclusively with activity, implying that the experience and practical skills for entrepreneurs are not something that can be acquired through conventional teaching methods. Against the contention of these writers, others like Shepherd and Douglas (1996) criticise the use of the less traditional methods like ‘role play, simulation and problem solving’, arguing that, in the classroom guidelines are to be provided to promote creative entrepreneurial thinking, but the ‘modern’ methods of teaching encourage only logical thinking which is inappropria