An entrepreneur influences the decision-making process by using different attributes such as intuitiveness, emotions or rationality (Hitt, 2001). In turn, the decision-making process affects an entrepreneur as it highlights the elements of loss or profit in business. This definitely shapes the thinking and the ultimate choice an entrepreneur makes.
Referring to the influence on the environment, an entrepreneur creates ventures and makes strategic choices that ultimately influence the environment. On the other hand, it is worth noting that in an open system, the environment is not only a recipient as it is also a feeder (Gelderen, 2001). In this regard, the environment gives feedback to the entrepreneur and influences the choices made regarding business ventures.
Based on the ideas of Hisrich, Peters and Shepherd (2008), entrepreneurship is a process that entails the creation of a new thing. The created substance must hold value, as time, resources and efforts are often employed. In addition, financial, social and psychic risks are involved. However, the opportunity to receive both personal and monetary rewards makes entrepreneurship a worthwhile experience.
Entrepreneurship decisions have far-reaching effects within any given economy (Gelderen, 2001). As an illustration, entrepreneurs influence allocation of resources through the decisions that they make. Precisely, entrepreneurs are allocators of resources.
In this regard, it is worth noting that entrepreneurs decide in which industries to invest and in which industries not to invest. Such a decision can influence the policy framework of economies in a big way.
By way of illustration, if entrepreneurs decide to invest resources in a new business, then the government may decide to introduce regulations in such ventures. Regulation is mostly achieved using policy instruments.
Additionally, the government policies may extend further and outline how taxation is carried out in relation to the new business. In a similar way, the decision to allocate resources to a certain industry is likely to influence demographic diversity, in terms of the regions occupied by people.
Further, if the area that an entrepreneur chooses to invest in lies far away from the rural areas, there are chances that such a decision will affect demographics. Demographics are affected since there is a likelihood that individuals would be tempted to migrate from their original areas of residence in the pursuit of the emerging employment opportunities.
It is also worth noting that the decision to allocate resources to a certain industry may hold the potential of altering employment demographics within a region, as it definitely changes the labor force statistics.
This view is held in reference to the idea that a decision to allocate resources to a certain region influences access to work opportunities. As job opportunities increase in an area that entrepreneurs decide to invest in, people move to such areas with a view to taking advantage of the emerging vacancies.
Moreover, the decision to allocate resources has political implications. As an example, investing in certain regions is likely to contribute towards development in reference to expansion of job opportunities and investment opportunities to businesses that deal in the same line of production. As such, the political class is likely to enjoy increased popularity when investments increase in the areas that they hail from.
Based on the example above, it is evident that a decision by an entrepreneur holds different outcomes. Although the results are far-reaching, it is true that intuitiveness, rationality and environmental factors influence the decisions that are taken. However, the extent to which the effects of entrepreneurial decisions are felt varies across regions.
Reference List
Gelderen, M et al. (2001). Strategies, uncertainty and performance of small business start-ups, Small Business Economics 15, 165-181.
Hisrich, R.D., Peters, M.P. & Shepherd, D.A. (2008). Entrepreneurship. Boston: McGraw–Hill.
Hitt, M. R. (2001). Strategic entrepreneurship: entrepreneurial strategies for wealth creation, Strategic Management Journal 22, 479-491.