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Theories And Practice Of Entrepreneurship

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Entrepreneurship covers three chief constructs, which are people, organisation and environment. These constructs are closely linked to the each other. There are literally tonss of different definitions of enterpriser and the account of entrepreneurship. Harmonizing to ( Kuratoko, 2009 ) , Entrepreneur can be defined as “ an pioneer or developer who recognizes and seizes chances into workable/marketable thoughts ; add value through clip, attempt, money or accomplishments ; presume the hazards of the competitory market place to implement these thoughts ; and realizes the wagess from these attempts.

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However, an enterpriser should be recognised on what they do but non who they are. Garner ( 1989 ) pointed out that “ focal points on the traits and personality feature of enterprisers ” to calculate out who, how, why and when an entrepreneur start a new venture. In this essay, I will depict two enterprisers by utilizing psychological, sociological and economic theories to discourse and includes the instance surveies to explicate an enterpriser.

Entrepreneurs Background – Amancio Ortega Gaona

“ [ We seek ] to democratise manner, in contrast to the thought of manner as privilege.

“ – Amancio Ortega Gaona ( Davidson, 2009 )

Amancio Ortega Gaona is the richest Spaniard in the universe. He is the president of the fabric group Inditex and is besides the laminitis of the well-known manner boutique- ZARA. He even appeared on the one-year Forbes list as a really successful man of affairs but he ne’er appeared in any media channel or interview. ( Hansen, 2012 ) He does n’t wish to be noticed, he goes to Finance Club for breakfast and work out everyday before he goes to headquarter company. Ortega is rather different from other enterprisers as there are non much information about his yesteryear and background. Badia ( 2009 ) explained the chief ground it ‘s due to both Ortega and his people whom seldom reveals their information to others.

However, there ‘s some basic information that are still “ available ” . Ortega was born in Busdongo de Arbas, a Leon state. His male parent was a railroad worker and his female parent served as a maidservant. He moved to La Coruna with his household in 1944. However, Ortega did non complete his instruction as he dropped out after simple school and started to work at shirt shop when he was 14. After working with different shops, he bean to larn and understand the fabric industry such as fabrication and trading.

From his working experience, he had an thought to bring forth and sell straight to clients. ( Menon, 2011 ) In 1960s, he owned his first concern named Confecciones Goa. He realized that non merely affluent people can have expensive, well-design apparels but everyone in the universe. So, he came up with all the thoughts and combined them to utilize cheaper stuffs to bring forth merchandises with friendly monetary value that everyone can afford He besides wants to straight sell it to the clients to cut down the premier costs. As a consequence, in the mid-1970s, the first ZARA shop was opened. ( Badia, 2009 ) ( Davidson, 2009 )

Entrepreneurs Background – Pierre Omidyar

“ I ne’er had it in head that I would get down a company one twenty-four hours and it would truly be successful. I have merely been motivated by working on interesting engineering. “ -Pierre Omidyar ( Entrepreneur, 2008 )

Pierre Omidyar, the laminitis and president of the EBay auction web site was born in Paris in 1967. When he was immature, his Persian parents migrated to the U.S when his male parent obtained the residence at John Hopkins University, Maryland. Therefore, Omidyar received his American instruction where his involvements towards calculating grew. As a immature computing machine partisan, Omidyar would instead jump category to play computing machine and larn programming while other pupils were playing balls with their friends. Furthermore, Omidyar ‘s first occupation was working in his high school ‘s library where he writes plan by utilizing his accomplishments and cognition. ( Cohen, A 2003 ) , ( Wisdom )

In 1988, Omidyar graduated from Tufts University with a Bachelor of Degree in Computer Science. Subsequently, he worked for several companies, including Apple where he invested a batch of his work and investigation into Apple merchandises since he was in his eighth-grade in 1980. ( Omidyar, P 2011 ) While he was working at software-maker company- General Magic, he missed an chance to put in a market portion. However, he observed and noticed an issue. He wants a free market that public can besides merchandise reasonably and freely alternatively of being operated by dominant purchasers who can all pay in one monetary value. From at that place, he thought about an on-line auction and an online market place where people could sell or buy points freely. So, Omidyar started composing the plan for the on-line auction during his trim clip of the occupation.

In 1995, on Labor Day of America, a newborn auction web site was created and launched called “ AuctionWeb ” . And subsequently Omidyar formed the AuctionWeb into his exclusive proprietary – Echo Bay Technology Group, but the name could n’t be registered since it was occupied by a Canadian company already. Therefore, he registered with a more preferred name: eBay.com.

Omidyar advertised his concern on “ Usenet ” newsgroup and “ What ‘s New ” page on Labor Day. However, it did n’t pull even a individual visitant as both the listings were delayed due to the web traffic, heavy backlog, public vacation and etc. But it did n’t discouraged him as he kept posting proclamations, described the points, and besides lists the history record of sale on Usenet. Nevertheless, AuctionWeb started to pull some visitants. Throughout the viva-voce promotion, AuctionWeb had successful helped to merchandise over 1000s of auctions. With the increasing clients utilizing the web site, jobs arises such as to a great extent web traffic trust between the purchaser and marketer, uncountable inquiries, ailments has landed in his electronic mail, and besides difference during the trading came up. ( Cohen, A 2003 )


The solutions that Omidyar had made up for those jobs appeared in his web site showed several psychological enterprisers ‘ features. Many of enterprisers are moderate hazard takers. They would prevail at any chance that will take to success. ( McClelland, 1961 ) First, AuctionWeb was wholly for free users, but due to to a great extent web traffic, the decision maker increased the monthly payment. Omidyar started bear downing users and it became an unsure determination. Once the users refused to pay, the web site lost its users and with the following job of cut down naming points. On the other manus, if this scheme succeeded, the web site will get down gaining net income. As what Omidyar did, he would ne’er cognize whether the users would be willing to pay for the site. ( Cohen, A 2003 )

Omidyar ‘s web site enabled people all over the universe to take part and merchandise concern. He knew the “ connexion ” between people is highly of import. It was influence by his male parent who was a doctor. His male parent taught him the value of connexion through the clip when he had connected with the patients. ( BusinessWeek, 2004 ) Furthermore, Omidyar is besides authorising influenced by his female parent ‘s success. His endowment of linguistics was inherited from his female parent Elahe Mir-Djalali Omidar who is besides known as the laminitis and president of the non-profit organisation: Roshan Cultural Heritage Institute.

The book of Pierre Omidyar has mentioned that “ her female parent ‘s work and academic accomplishments must hold exerted an tremendous influence on him. ” ( Viegas, J 2006 ) Precisely, his good understanding about the construction of all linguistic communication particularly in computing machine linguistic communication is precisely unconditioned and acquired from his female parent. “ One person can do a difference ; that belief comes from my parents ” said Pierre Omidyar. ( Bloomberg BusinessWeek,2004 ) Harmonizing to The Deviancy Hypothesis- early childhood experiences, it is one of chief factors to development of the personality. ( Mitra, category ) . ( Cohen, A 2003 ) ( McClelland, 1961 )

With big sums of ailments ‘ electronic mail, inquiries and debate between the users, he created the “ Feedback forum ” and “ Bulletin Board ” . Creativity is regarded to be the Core and desirable entrepreneurial properties. ( Mitra, category ) so, Timmons et Al. ( 1977 ) identified 14 features, and “ admitted that merely few enterprisers would possess all traits and some appear to be linked. ” “ Think different ” by Steve Job, to be originative and advanced, can interrupt through something that exists. ( Omidyar, 2011 ) In Jay Mitra ‘s category, a slide showed that the deviancy hypothesis contain one of the premises that a individual who was caused by a force in most of behaviours. Omidyar let the people resolved their ain job. He besides did non engage more staffs to pull off the web site. These two schemes were really successful and it exceeded his outlook.

His creativeness and advanced is non merely from internal but besides external influenced by person or something. “ Think otherwise ” is the 1 of the chief factors that affected him to set up AuctionWeb. When he missed an chance to put in a market portion, he was n’t merely thought of deficiency of experience or bad fortune but to make a new market topographic point. “ I wanted to give the power of the market back to persons, ” Omidyar said. ( Bloomberg BusinessWeek, 2004 ) The thought of making a new market topographic point besides covers in the theory of Tolerance for Ambiguity. Budner ( 1962 ) ( Okhomina ) has defined it as “ inclination to comprehend equivocal state of affairs as desirable ” . They believed the enterpriser have innate abilities to work out the jobs.

In internal venue of control, Rotter ( 1996 ) defined it as an ” person ‘s perceptual experience about the underlying chief causes of events in his/her life ” . From the head of enterpriser, they do believe that they can command or alter something in their life by their personal attempts or activities. ( Okhomina ) Ortega ‘s household bantam pay of 300 pesetas per month was non plenty to back up them. Due to his child-hood background, Ortega can wholly understand to the “ diminutive-wealth ” of people ‘s life. He believes everyone can hold their ain manner and have on it without paying a batch of money. In order to be less on the premier cost, Ortega has to happen out the cheapest, similar resources and straight sell it to the clients to cut down the premier cost.

This action could besides be cover at “ Commitment, finding, and doggedness ” ( Kuratko, 2009 ) as an enterpriser, they would seek their best to get the better of reverses and obstructions with doggedness. Furthermore, Ortega might hold a “ vision ” of his company when his thought comes up and he has adequate “ self-assured and optimism ” to cover with the jobs that he face so far due to his profound apprehension in textile field. ( Kuratko, 2009 ) For illustration: Steve Job of Apple Computer ( 1955-2011 ) “ ever had a vision of what he wanted apple to carry through ” . ( Fitzgerald, 2012 ) His address on 1983 had pointed out that he wants to make a personal computer that can be carried around and easy to utilize. ( Fitzgerald, 2012 )


Although an enterpriser could be clarify into assortment psychological facets but bookmans have besides discovered that “ entrepreneurship besides need to considerably geographic expedition into the development. “ ( Mitra, 2012 ) “ The entrepreneurship is unconditioned, but needed some resources to turn this unconditioned thrust into a concern and maximise their opportunity of edifice. ” ( Gannett, 2012 ) Omidyar has the endowment in computing machine accomplishments and cognition since he was immature ; “ as the package is pure “ thought material ” all you need is imaginativeness and scheduling endowment ” . ( Naugton, 2012 ) Naughton besides mentioned that the laminitis of FaceBook-Mark Zuckerberg besides did the same. ( Naughton, 2012 )

Furthermore, In Weber ‘s theory ( Weber, 1864-1920 ) , he claimed that a magnetic enterpriser is ever linked to the thoughts. The relationship between society and entrepreneurship is of import as it might do the decease of entrepreneurship and the economic system. Harmonizing to the research of Hofstead ( 1980 ) , there are non merely one sort of theory or pull offing method existed and even pull offing a basic issue demand to be reliable on each states society and civilization root.

Hofstead has defined four cultural value dimensions- Individualism/collectivism, power distance, uncertainness turning away and masculinity/femininity. Most of people would establish on their empirical experience to thought, feel and action. For illustration: Ortega was born in a normal household to beget who worked for railroad and female parent as a maidservant. So after he worked for assortment shops, he saw the commercial potency of the market. He came up with an thought of “ look similar, cost less ” . He thinks everyone deserved to have on good design apparels.

The facet of societal capital by and large is to stand for and invested the value resources turns to persons and corporate groups in society. Investigator could derive the net incomes through the procedure of investing and good executing it via societal web. ( Mitra, 2009 ) Both the enterprisers, Omidyar and Ortega are authoritative illustrations of societal capital. They utilized the bing status to do a maximal net income. Possibly to derive the net income is non the end that they set up ab initio. But their schemes and their head are suited to the market decently.

“ Social capital is besides linked to the thought of reputation-building and legitimacy ” . ( Litch and Seigel,2005 ) ( Aldrich and Fiol, 1991 ) The better repute of a house, the better chance to entree ends such as resources, employees or distributers and etc. Nevertheless, “ Trust ” is an of import appraisal of constructing a repute. In Omidyar ‘s belief, people are by and large good and they should larn to swear each other and handle them as the manner they wish to be treated. From Licht and Siegel ( 2008 ) there were four beginnings of societal capital viz. value introjection, reciprocality exchange, bounded solidarity and enforceable trust.

Omidyar appropriate utilizations all of the beginnings of societal capital when he was fighting with the difference job between the users. He taught users to “ set themselves into other ‘s topographic point ” and generous aid each other and portion thoughts together. Therefore, he created the “ Feedback forum ” and “ Bulletin Board ” . Users could go forth whether any good or bad feedbacks on the marketer ‘s forum. It ‘s non merely to promote the Sellerss but besides could enforceable the users to be “ honest ” . Users can besides discourse any jobs that they faced when trading. These two methods really save the labours job and besides reduced the load of the laminitis. On the other side, Ortega ‘s scheme of “ cost less ” increased his repute in the market. “ Zara has a repute of interrupting the market wherever it goes. A clear trade name proposition has been important in the trade name ‘s success “ ( Hughes, 2011 )


Marshall ( 1842-1924 ) had pointed out that cognition is one of the cardinal points and experience is a really of import component in concern. Abundant experience could assist better the growing and critical from past experiences. Besides, trust and pick of people are besides indispensable. To take or swear the right individual to work with non merely encourages the endeavor but besides better the creativeness and larning thought out the insight from group. ( Mitra 2012 ) Both Omidyar and Ortega have the wealth cognition in their specific country. Omidyar had been involved with computing machine since he was in the eight-grade.

He kept larning and working with the related cognition. When AuctionWeb was turning faster than he thought, he needed a spouse to assist him to set together a concern thought and that spouse was Jeff Skoll. As Omidyar said ” Jeff Skoll and I are the perfect balance and “ it ‘s like a yang to his yin. With Skoll ‘s aid, AuctionWeb swimmingly turn and became stronger. ( Cohen, 2003 ) On the other side, Ortega did non learned about the related-textile cognition during his instruction. But he gained all the cognition from his work experiences.

His profound experience of fabric field is the chief factor that leads to his success. In add-on, there is a bookman who was against this theory. “ For every nescient individual there is one who likely sees things more clear than others, and this “ person ” is enterpriser ” says Israel Kirzner ( 1973,1985 ) . He claimed that enterprisers do n’t necessitate to incorporate much cognition and experiences in a field that they were involved. ( Mitra, 2012 ) However, in this paper, the two successful enterprisers have overthrown the theory of Kirzner. It was observed that the cognition and experience are indispensable while running a concern.

Schumpeter ‘s creativeness enterpriser refers to make something that does non be before, some new visions of the universe and besides create the chance to the society. ( Mitra, 2012 ) Omidyar is precisely an illustration of Schumpeter ‘s theory where his concern, eBay: an on-line auction web site, have opened up the new market topographic point to the society. This new trading signifier has n’t been used before and people can merchandise anything they want through the web site whether it ‘s new or used merchandise.

At the same clip, more and more people were involved in this and get down up their concern in the new market topographic point. It created incalculable chances invisibly. Additionally, Schumpeter ‘s entrepreneurship and invention has defined it as “ a new merchandise, procedure, or method of production ; a new market or beginning of supply ” ( Mitra, 2012 ) ZARA every bit known as a manner dress shop increases the wealth of company through a uninterrupted assortment of inventions. For illustration, it merely took under 3 hebdomads to develop a new merchandise and have it available to clients at a assortment of locations.

This is a immense figure compared to other companies within the same industry. The unreplaceable sense of manner, friendly monetary value and the rapid produce velocity gives them a competitory advantage over other companies. This is due to Ortega public presentation of new procedure and methods to bring forth the merchandises. He found the cheapest and low-cost resources to bring forth the manner. His system of selling merchandises to clients straight from mills indicates a new beginning of supply.

In decision, enterprisers have their ain traits. By and large, their civilization and household background plays a cardinal function in developing their traits. In my sentiment, I believe if one has to be a really successful enterpriser, one has to decidedly confront job his/her work in order addition valuable experience. Omidyar and Ortega are proved enterprisers as both developed and demonstrated what they ‘re capable of in their concern. Some argued enterprisers are born of course. However, both Omidyar and Ortega are non merely born of course as an enterpriser but because of their experience and hardwork finally led them to go an complete enterpriser.

Cite this Theories And Practice Of Entrepreneurship

Theories And Practice Of Entrepreneurship. (2018, Apr 11). Retrieved from https://graduateway.com/theories-and-practice-of-entrepreneurship/

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