What Is Entrepreneurship - Economics Essay Example

Introduction:
In the 21 century, with the abundant appearance of entrepreneurs who make huge contribution to the social economy, the vital of entrepreneurships are much accounted of by people - What Is Entrepreneurship introduction. Nevertheless, the definition of entrepreneurship is ambiguous and there are different functional concepts of entrepreneurship. The European Commission defines entrepreneurship as a general attitude that can be usefully applied in all working activities and in everyday life (Kathrin, Werner & Frank 2008). This explanation is a whole summary of entrepreneurship. The essay will illustrate the entrepreneurship from taxonomy terms, namely what, who, why, when and how in detail.

What:
The ‘what’ adjective described in the term of entrepreneurship, always, either explicitly or implicitly, would be allocated into the lexicon as business entrepreneurship (Gedeon 2010). The real connotation of business entrepreneurship refers to the field of activity and what types of values are created. Generally, the entrepreneur’s internal sense of business decides the field of activity. A successful entrepreneur should has such sense that the activity could be profit seeking business activity at the beginning and in the later, it could transform such orientation into non-profit orientation sector to created more values. Making money is the primary stage of the enterprise. Then, entrepreneur starts to achieve the thought of development when having certain platform. Yu Minhong, the chairman of New Oriental Education group, is a typical entrepreneur. The inchoative establish of private training school was to making profit and only offered training on GRE and TOEFL. Nowadays, it has expanded to various fields of activities, like SAT and National English Exam. However, the entrepreneur should also pay attention to the control of the field of activity. Unlimited expanding will come into the negative effects.

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In addition, what types of values created by entrepreneur is also a critical factor to define entrepreneurship. First of all, an entrepreneur should create value to the consumers. As the terminal customers and driving source, the consumer values reflect the entrepreneurship to some extent. One of the reasons for the success of New Oriental Education group is that it brings opportunities for the consumers to strive for a higher storey. Besides, the industry value created by the enterprise plays a decisive role. The growth of New Oriental Education group spurs the whole training industry. Nowadays, there are thousands of training organizations in China. Another important value is that the enterprise provides chances to the economy. With the listed of New Oriental Education group, in 2009, Wen Jiabao pointed explicitly in the government report that the training industry is the industry that will pull the China’s internal need in the future.

Who:
The traits school expressed that entrepreneurship involves individuals with certain behavioral skills, who participate in entrepreneurial activity (Steven 2008). Personality traits have been popular among the researches in the entrepreneurship. Need for achievement and internal locus of control have been considered as extremely combined with entrepreneurship (Wei & Ismail 2008).

Need for achievement reflects a person’s willing to achieve his or her ambition. Person with high achievement need has the perseverance to challenge difficulty and insist on what he or she does. This person owns the trait of entrepreneurship and can make success better than others. For instance, although Yu Minhong experienced abundant obstacles, he insisted on implementing his objective, as a result, he achieved huge success. As his saying goes ‘Don’t wait to have a good job, to start to work’, which means the things we obtain result from the efforts we make.

The internal locus of control measures the extent to which people feels in charge (Beugelsdijk, 2007). People who believe in internal locus of control have such belief that the success is comes from individual’s effort rather than the external outcomes like luck, fate and chance. The internal locus of control is more important compared with the external locus of control in the term of entrepreneurship. Whereas, the external influence still occupies certain factors in the way of success. Entrepreneurs also need to catch the opportunity to expand their business.

In contrast to the traits school, the behavior school does not focus on the personality of the founder but emphasis on creating a new venture during the whole stages of activity (Steven 2008). Cooperation is the keystone in behavior school, which is significant in entrepreneurship. Entrepreneur carries out team work not individual action in making influential decision. Although great entrepreneur always plays one-man show apparently, the real entrepreneur is adept at cooperating. Moreover, such team spirit needs to expand to each employee. New Oriental Education group is a representative example. It embodies the perception that employees are the entrepreneurs in the enterprise. Managers play the role of coaches to collaborate with subordinates and conduct them in positioning their rational goal. Accordingly, the New Oriental Education group created the high reputation record and growth record.

How:
The connotation of entrepreneurship can be explained by the Austrian School of Economics (Gedeon 2010). The core of theory in Austrian School of Economics is subjective theory of value, in other words, the marginal utility theory of value. Marginal utility theory of value believes that if one thing wants to be valuable, it must be rare and utility. This means that not everyone can have the entrepreneurship. It is unique, precious and rare. As an entrepreneur, he or she must has the conscious that the enterprise should be the leader in the industry, not only in China but in the worldwide. Still taking New Oriental Education group as an example, in the initial period, no one regarded training can be an industry, however, with the enlargement of New Oriental Education group, the training industry is recognized by people gradually. At the same time, Oriental Education group keeps ahead in training industry.

Innovation is another point to explain Austrian School of Economics. Besides, innovation is the soul of entrepreneurship. The disappearance of the initiative spirit is the most serious hidden trouble in the enterprise. Innovation must be the instinct of an entrepreneur. Nevertheless, creativeness is not the glitter of genius but the result of entrepreneur’s arduous endeavor. Innovation represents the typical trait in entrepreneur activity, such as product design, technological innovation, marketing innovation and organizational innovation. The substance of innovation is to do different things rather than improving the thing that has been done ever. Therefore, an entrepreneur with creative spirit is more like an artist who full of passion and energy. The spirit marketing creation brings the special competitive strength to New Oriental Education group. New Oriental Education group not only promotion its course but put more emphasis on promoting life spirit. This is a critical factor that facilitates the success of Yu Minhong.

Why:
The goals of the founders are a significant dimension of entrepreneurship. As an entrepreneur, the first step is to institute the enterprise goals. After having the definite objective, the entrepreneur is able to execute a series of activities. In addition, the entrepreneur should have the ability to enlarge his or her ambition. In other words, an entrepreneur should possess hero feelings. The entrepreneur just likes the general in the battlefield. The hero encounter not only need the feeling of making contributions but need the hero temperament including the performance of future vision (Wiseuc 2012). A person with hero temperament is willing to magnify the activity to become unlimited. Therefore, as long as the strategy and tactics as well as implementation are accurate, he or she is able to achieve the success. When New Oriental Education group was just established, Yu Minhong had the thought that expand the training market over China. Nowadays, New Oriental Education group has over 25 constituent companies in China.

Moreover, with the appearance of new economy, entrepreneurs cannot follow the old business simulation. Facing the goal of enterprise, entrepreneur needs reconsider the corporation’s future developing orientation and possible change with the new technology. For instance, with the steadily increase of sales volume in JingDong Mall, the GOME and Suning Appliance have the possibility that they will be replaced by JingDong Mall in the future. In brief, not only entrepreneur needs soaring ambition but sets goals according to the modern situation.

When:
The risk theory exhibits that new venture formation is prominent aspect of entrepreneurship (Gedeon 2010). Hawley (1907) is the first to convey vigorously that the assumption of risk is the most essential function of the entrepreneurship. Risk is the nature of entrepreneurship. Richard Cantillion and Frank Rnight, these two economists connected entrepreneurship with risk or uncertainty. A person cannot be an entrepreneur without the mettle of taking risk. The American 3M Company has a valuable slogan: ‘To be able to find the prince, you have to kiss with thousands of frogs ’. Kissing with frogs means risk and failure. However, it is not wise to taking risk without considering any situation. Before taking risk, one needs to prepare enough information under certain environment.

There are three types of entrepreneurship, respectively, inherent risk spirit, cognitive risk spirit and scientific risk spirit (Zhao & Wang 2007). Person with inherent risk spirit regards that opportunity is always accompanied with risk and risk is a kind of pleasure. Cognitive risk spirit is trained during the practice. From starting from scratch to pioneer creation, undergoing innumerable failure and success, these kinds of entrepreneurs have deep reasonable cognition and express temperate mode in operating business. Yu Minhong is the typical person with cognitive risk spirit. During his entrepreneurial process, he experienced heaps of times failure and learnt from the failure every time. Such experience completed his success and can be even-tempered confronting with risk and failure. Scientific risk spirit is based on the deep acknowledge on activity and though analyzing, investigating risk, entrepreneurs make courageous decision. These entrepreneurs using scientific method to analyze risk including testing where these risk come from, what content these risk have and what kind of degree these risk are.

Conclusion:
This short essay reviewed the concept of entrepreneurship by applying several theories, such as trait school, behavior school, Austrian school and risk theory. Besides, to explain the theories more distinct, the article mainly used the example of New Oriental Education group to support these theories. The entrepreneurship can be explained by five aspects. Firstly, an entrepreneur should create particular values and the filed he or she involved should be diverse. Then, the two traits comprising need for achievement and internal locus of control are necessary to entrepreneurs. The cooperation behavior also cannot be ignored. Moreover, the enterprise should be the leader in the industry and entrepreneurs need to put emphasis upon innovation. More importantly, the high goal is essential factor for entrepreneurship. Finally, the risk spirit is also a significant part of entrepreneurship. Reference:

Beugelsdijk, S 2007, ‘Entrepreneurial Culture, Regional Innovativeness and Economic Growth’, Journal of Evolutional Economy, vol. 17, pp. 187-210,

Gedeon, S 2010, ‘What is entrepreneurship’, Ted Rogers School of Management, Ryerson University, vol. 1, no. 3, pp. 1-35, http://www.entryerson.com/epr/index.php/jep/article/viewFile/60/43

Hawley, F 1907, ‘Enterprise and the productive process’, New York, viewed 8 April, 2013,

Kathrin, F, Werner, A & Frank, W 2008, ‘Entrepreneurship education in Germany and Sweden: what role do different school systems play’, Journal of small Business and Enterprise Development, vol. 15, no. 2, pp.365-381,

Steven, G 2008, ‘A Lexicon for entrepreneurship’, Journal of Business and Entrepreneurship, vol. 10, no. 2, pp. 1-24,

Wei, O & Ismail, HB 2008, ‘Visiting Personality Traits in Entrepreneurship Study from Resource-Based Perspective’, Business Renaissance Quarterly, vol. 3, no. 1, pp. 97-114,

Wiseuc 2012, Wiseuc Company, viewed 8 April, 2013,
http://www.wiseuc.com/zt/zt_30/ztcon_1474.shtml

Zhao, YJ & Wang, XM 2007, ‘The risk spirit of entrepreneur’, Changan University, viewed 8 April, 2013, http://www.cnki.com.cn/Article/CJFDTotal-SCZG200827045.htm

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