The Definition of Entrepreneurship Definition Essay

Introduction

Entrepreneurship is defined from different perspectives depending on the discipline and context where the definition is applied. Here, the general definition of entrepreneurship captures the core elements of “discovery, evaluation, exploitation of opportunities, and the organisation of markets that had not previously existed” (Bruton, Ahlstrom & Li 2010, p.34).

Another definition is the “new firm formation and self-employment and the subsequent creation of new economic activities to exploit the opportunities”. On the other hand, the definition provided in the extract focuses on the “pursuit of opportunities beyond resources controlled” (Bruton, Ahlstrom & Li 2010, p.34).

However, the congruence of both definitions with that extracted from the Harvard definition fall short of capturing all the elements of the definition of entrepreneurship, leading to the conclusion that the definition is useful for an individual entrepreneur.

Pursuit

According to the extracts from the definition, an entrepreneur is a person defined by a relentless and singular focus on an idea that is acceptable because it is consistent with the characteristics of entrepreneurial behavior. Kuratko (2013) contends that the element of singly focusing on the pursuit of opportunities by consuming limited resources efficiently and effectively makes one introduce more profits to an organisation, making the definition comprehensive about an entrepreneur.

The definition fits well because entrepreneurs exist in different categories and each category is defined by various elements such as the personality of an individual, the background or environmental factors and the social processes that define what a person gets involved in, leading one to conclude that entrepreneurship is about pursuing opportunities.

While the relentless focus is evidently a definition of an entrepreneur, a question arises on “what are the elements to focus on?” Here, an entrepreneur must first identify a “good idea” before even preparing themselves to focus and pursue the idea. How good an idea is, depends on the provision of answers to the core elements of entrepreneurship of “why, when, and how” opportunities arise and the type of entrepreneurial skills required to identify and pursue the opportunity.

Here, it is important to filter out what should be focused on although the Harvard definition fails to capture in the definition the initial phase of the core elements of “discovery, evaluation, and exploitation of opportunities” in the context of being a risk-taker and the ability to combine innovation and pro-activeness.

In addition, the pursuit of opportunities in an environment that is defined by a sense of urgency is an appropriate definition of an entrepreneur. However, a question arises as to “why should the opportunities be limited to the sense of urgency?” when critically evaluated, the statement provides a definition that narrows the entrepreneur to one who already has ideas that enables them to respond urgently to an opportunity using readily available and resources.

Here, the issue of the scarcity of resources or the optimal use of resources to optimise output from scarce inputs has not been explored in the definition. However, a comprehensive definition must include the concept of initiation, identification, discovery or creation of opportunities as underpinning the definition in the study.

The definition also must encompass the decision to exploit the opportunities when they have been identified because some do not provide economic value and other opportunities that add economic value. Entrepreneurship is about the pursuit of new ideas and the willingness to pursue those ideas and combine resources to achieve the goal of fulfilling the needs of market.

The relentless pursuit is based on the individual decision to pursue an opportunity that makes an opportunity profitable. Here, when opportunities arise, they do not lead to spontaneous exploitation but get exploited by the people who relentlessly pursues them for profit. One can dispute the Harvard definition, which bases the definition on the relentless focus of the pursuit of an opportunity without factoring risk.

Here, risk can impede and therefore tend to discredit the definition. However, a critical focus on the definition shows that a risk cannot be estimated merely because uncertainties are not known until the opportunity has been pursued by the entrepreneur who will determine the extent of the demand for a product or service and whether a value chain can be created.

Here, the core elements are to get organised and creating a new way of doing things and pursuing and exploiting opportunities innovatively.

Opportunity

A continuum of Academic literature agrees that entrepreneurship cannot exist where opportunities do not exist. In fact, the nature of the opportunities differs across different disciplines even though the general definition is the same.

Here, opportunity is about some unfulfilled desire in the market place or the creation of services or products that meet the unmet needs of the customers in the marketplace. Opportunity can also be defined as an idea that leads to a business concept which leads to newness, economic value, and perceived desirability (Levie J & Lichtenstein 2010).

From the extract presented by the Harvard school, opportunity is an element that is used to define entrepreneurship. In the context of the extract, opportunity arises in any of the four ways, which include pioneering innovation, targeting a product to new customers, creating cheaper substitute products, or devising new ways of doing business.

The scope of the definition perfectly fits into the definition of entrepreneurship because it captures the timing of the opportunity and the issues of venture creation leading to the conclusion that innovation, identification of new products and markets are necessarily sufficient to define an entrepreneurial opportunity.

Here, there is some degree of consensus on the definition that vindicates the earlier definition contained in the extract by pointing out that the method used by an entrepreneur distinctively defines the pursuit, although some other academicians object to the assumption by arguing that time is left out in the definition. Here, opportunity depends on circumstances that are defined by conditioning or the probability or improbability of an event.

One can conclude that opportunity is a favourable event that presents itself to be exploited to add value to the economic activities of institutions (Nicholls 2010). However, a critical analysis of the definition shows that even if the time frame within which entrepreneurial the activities occur is not mentioned, yet one can keenly note that the continuum of entrepreneurial activities that define entrepreneurship must exist or occur in a time frame.

Also, the definition is not for a specific discipline but is a generalised form of definition. When it gets done to specifics, then one can expand on the definition by addressing the particular needs of each discipline. It is important to note that the business practises that an entrepreneur gets involved in do not deviate from the standard business practises but are done by making combination of different factors of production to bring about innovation.

However, innovation is based on new combinations of factors of production to meet the unmet needs in the market. However, innovation from the entrepreneurial perspective should be distinguished from chance because innovation comes and disappear because of the failure to succeed in the market.

On the other hand, the definition distinguishes and entrepreneur with normal business pursuit by affirming that the definitions that focus on profit improvement do not fit into the correct definition of entrepreneurship. It is true that an entrepreneur can innovatively introduce new ways of increasing profits, such as identifying new markets with unfulfilled needs or through the innovation of a new product.

Even though the scope of the definition does not clearly show where an entrepreneur and the normal business transactions end and start, the definition shows that opportunities are about venture creation, which leads to profit generation. In conclusion, opportunity is about an occurrence that can be exploited to make profits.

Beyond resources controlled

The definition of entrepreneurship based on the component of “beyond resources controlled” is another acceptable element that fits an entrepreneur. The argument here is that new organising does not require the use of a new resource, but leads to the optimisation of resources and is not contained by the unavailability of resources.

In addition, an entrepreneurial activity can be exploited with minimum of resources so long as there is a profitable opportunity to be exploited. For instance, a person can discovers a new opportunity which he sells to another person to be exploited (Shane 2012). It has been demonstrated through empirical research studies that entrepreneurship goes beyond the controlled resources because the opportunities being pursued are risky.

The entrepreneur seeks for ways of making the dormant customer to accept the new idea, ensure that the technology is available to make an idea become successful, and be able to attract the customer buy in into the idea and attract people to work out the idea.

The definition fits an entrepreneur because when starting to pursue an opportunity, the plan must encompass the resources that are not available but which can make idea successful. To address the deficiency of resources, an entrepreneur will need to create partnerships with others who could be stakeholders in the business, expand resources that are less likely to be adversely affected by risks, and be able to explain to others that a new idea brings about better life for others.

Conclusion

In conclusion, the definition presented in the Harvard extract fits well because an entrepreneur is one who identifies opportunities and pursues them to create profit and value by exploiting the opportunities. In addition, opportunities can only be pursued to become profitable by the people. Here, opportunities can be identified by an entrepreneur who can device new ways of doing things such as creating new business models or by improving on existing opportunities to add value and profit to an organisation.

It is important to note that entrepreneurs sometimes are limited by inadequate resources, but the entrepreneurial spirit takes the entrepreneur beyond the available resources by making partnerships and looking for other sources of income to exploit the opportunities without getting limited to exploit an opportunity.

References

Bruton, G. D., Ahlstrom, D. & Li, H. L. 2010, ‘Institutional theory and entrepreneurship: where are we now and where do we need to move in the future’, Entrepreneurship theory and practice, vol. 3, no. 34, pp. 421-440.

Kuratko, D. 2013, Entrepreneurship: Theory, process, and practice, New York, Cengage Learning.

Levie, J. & Lichtenstein, B. B. 2010, ‘A terminal assessment of stages theory: Introducing a dynamic states approach to entrepreneurship’, Entrepreneurship Theory and Practice, vol. 2, no. 34, pp. 317-350.

Nicholls, A. 2010, ‘The Legitimacy of Social Entrepreneurship: Reflexive Isomorphism in a Pre‐Paradigmatic Field’, Entrepreneurship Theory and Practice, vol. 4, no. 34, pp. 611-633.

Shane, S. 2012, ‘Reflections on the 2010 AMR decade award: delivering on the promise of entrepreneurship as a field of research’, Academy of Management Review, vol. 1, no. 37, pp. 10-20.