The Role Of Personal Values In Entrepreneurship In America Business Essay
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Almost every man and woman of intellect and character wants to be rich and famous. I can't imagine anyone who doesn't dream of joining the elite class of the likes of Bill Gates, Andrew Carnegie and Walt Disney just to mention a few. We are often mesmerized with such "rags to riches" tales of individuals who build successful business ventures from almost nothing. Robert Kiyosaki (2000) said that his father passionately advised him to learn how to make money, if he (Robert) wanted to be rich (p. 14). This secret of "making money and creating wealth"- in order to be rich is what we are all looking for. What is the secret then, and how can we replicate it to turn lead into gold. Entrepreneurship seems to be the myth to unearth.
With unemployment proving to be the conspicuous socio-economic challenge of the next century, governments and individuals are turning focus on entrepreneurship and creation of small business enterprises to solve this problem (Rainer & Jim, 2009, p.1-2). Fashions come and go, but the field of entrepreneurship and small business development and promotion remains one of the most consistent ventures that attract intervention and funding from donors and governments. It is also a significant driver of economic progress in any society. Needless to say, entrepreneurship outshines almost all other factors when evaluating the success of richest men in the American society, talk of Bill Gates, Walt Disney or any other.
Thesis Statement: The Issue
Successful entrepreneurship has both ups and downs. Is it all about having the necessary monetary capital, government connections and superior brands and products? Or are there other hidden or intangible values that a successful entrepreneur should posses? Some people argue that, "personal values" of an entrepreneur determine-to a greater extend, the success and corporate strategy of any business enterprise, others disagree and give convincing arguments to defend their point of view. The purpose of this study is to find out to what extend "personal values" determine the development of a successful business venture (entrepreneurship). The position of this paper is that in this era where the business environment is rapidly changing, "personal values" determine-to a greater extends the success or failure of entrepreneurs in the American society and any other part of the world. The study adopts an analysis of credible literature to support the problem of study (thesis).
This study will focus on three credible issues under the umbrella of the thesis statement; (1) what defines a "model type" entrepreneur (successful); are personal values part of this? (2) In what ways can personal values influence the success or failure of an entrepreneur? (3) What strategies are most effective in nurturing a sustainable entrepreneurial activity?
Key words; Entrepreneur, entrepreneurship, personal values, enterprise
Definition of Terms
Who is an entrepreneur and what is Entrepreneurship?
Entrepreneurship may be viewed as a kind of leadership orientation, to be precise, leading a business venture or enterprise. Robinson et al. (2007) defines the term entrepreneur as "a person who creates something of value and assumes the risk of building a business around it" (p. 413). This definition incorporates risk, innovations and implementation. Studying entrepreneurship often focuses on managing innovation, maximizing profits and minimizing risks. To achieve this, the "personal values" of an individual play a big role.
The concept of entrepreneurship has a long history. During the mercantilist years, the term "entrepreneur" was used by French mercantilists to refer to a person who buys goods at certain prices with an intention of selling them at unpredictable prices in future. This definition satisfied every body until when Jean Batiste Say wrote in 1803 and broadened the term to "bringing together the factors of production with the provision of management and bearing the risks associated with the venture". This definition has not changed much over time, but of significance is the introduction of the concept of innovation-as the sole purpose of an entrepreneur by Schumpeter (1950) and Marshall's 1920 description of the entrepreneur as someone who, usually combines the factors of production-be it labor, capital or land so as to produce an increased output of goods or services. This results into increased total wealth and, or material welfare.
"Personal Values"; What Are They?
"Personal values" refer to the desirable qualities, standards, or principles that motivate actions. Schwartz's Value Theory identifies ten fundamental values assumed to be universally important in any societal functioning; power, achievement, self-satisfaction, stimulations, self-direction, benevolence, universalism, tradition, conformity, and security. Bardi and Schwartz posited that people behave according to their values because there is a need for consistency between one's values and actions; and, value-consistent action is fulfilling as it helps people achieve satisfaction from their actions.
A "Model-Type" Entrepreneur
Much is often said and documented about the social, economic and educational backgrounds of the successful American entrepreneurs. Almost every ambitious man would be interested in reading about the "life of Bill Gates", wont you? Literally, to get a tip of how he managed to develop "Microsoft" and become the richest man on earth. It is agreeable that money is not the sole motivator for a successful entrepreneurial activity. Underlying personal values and needs are seen as the main motivation, with money playing a secondary role of accomplishment (Paula, 1988)
In his study of "High-tech entrepreneurs" Paula (1988) sought to know why people venture into entrepreneurship. Is it because they have much more money than they need? He observed that factors that influence this most are; deteriorating job or career satisfaction-leading to alternatives, discovery of a new opportunity and external encouragement to begin a new enterprise. Some jobs may not allow an individual to pursue his/her new discovery. Paula also found that "High-tech" entrepreneurs readily find donors who finance them to pursue their new ideas. Therefore financial stability is not the sole determinant of venturing into and succeeding in an enterprise. You disagree with me, who new Bill Gates, before he invented Microsoft.
The decision to venture into entrepreneurship therefore, results from values held by an individual before he/she makes the decision to venture into entrepreneurship. These values are carried on into the business and will eventually determine the success or failure of the enterprise. Paula concludes that the ultimate risk that entrepreneurs face is directly associated with personal values; to be precise, the fear of failure. Yet in most cases they overcome this risk. The significance of solving a problem to achieve a certain goal seems to outweigh the devilish fear of failure for the passionate entrepreneur.
Despite personal differences in social, economic and educational backgrounds, the personality traits of a "model-entrepreneurs" do not differ significantly. They possess a powerful desire for control, autonomy, keen intuition-the ability to connect ideas with reality, and the capability to build, create and solve difficult problems. In addition they are optimistic and possess a strong desire to accomplish (Paula, 1988, McClelland, 1971).
An entrepreneur is a risk bearer. He/she must have the strength and courage to assume the liability of uncertainty, a person who takes the task of combining the land of one, the labor and capital of another, in order to produce a product (Hisrich & Peters, 2000). A "model entrepreneur" should be able to innovate and invent solutions to problems and challenges that cannot be solved by normal practice alone. They should always operate outside standard operating procedures (Schumpeter, 1950, Casson, 2005).
Sarasvathy (2001) observed that Entrepreneurs are entrepreneurial, they are different from managers because they think "effectually", they think of how they can make the future and shape it. They believe that the future can be made, predicted, and shaped by human action. To be precise, they should always be a head of others. Entrepreneurs are like explorers moving out on voyages to unknown waters and land like Christopher Columbus discovering the new world. They always imagine of new and possible ends given a certain set of means. An entrepreneurial thinking is "effectual thinking"-inherently creative.
The entrepreneur is an "individual portrait", what do people say about you, what do they like or hate about you, basically this will be determined by your personal values. Schumpeter (1934) portrayed the motives of an entrepreneur as an individual with a will and dream to found a private kingdom or dynasty, the desire to conquer, fight and be superior to others and finally to celebrate the joy of getting things done. The economic activity of entrepreneurship becomes similar to sporting. Just the way sporting is inborn to individuals, and people know it, so is entrepreneurship. Your success will largely be determined by what you passionately like and Value.
The personal values that exist in our "model entrepreneur" who is successful and always innovative are not "sweets" that can be bought in the market. These are values that are inborn and self driving within the individual. Successful and celebrated entrepreneurs like what they do and they are always proud of it, name them; the Bill Gate', Andrew Carnegie and the Rockefellers' among others, and I bet you will come to my aide.
Succeeding In Entrepreneurship: The Influence of Personal Values
Why do some entrepreneurs flourish, while others shine for a while and get into the forgotten "chapters and books of history"? Is it because some have accumulated capital, and superior brands and products-that customers develop "relationships with" and sustain them in competitive markets? Peter Drucker, -a management Guru once said that, marketing and innovation are the two basic functions of any business enterprise-"all others are just costs". What does an entrepreneur need to satisfy the ever changing needs and consumption styles of consumers?
Fournier (1998) observed that the successful business entrepreneur "personified" his/her brands which in turn develop a "relationship" with consumers giving such a brand an edge in a competitive business market. This is often associated with the real or perceived superior quality of the product compared to substitute or similar products. This signifies the importance of "human factor" in today's business. Personal values play a significant role in any entrepreneurial activity.
Our "model entrepreneur" is protective, perceptive, creative and sustaining a relationship with their firms that can be depicted as familial. Their firms are like their children, who desire protection, discipline, and care from infancy to adulthood. Many founders often consider leaving their firms after accumulating substantial income, but they hardly do so due to a sense of strong personal involvement and attachments with their firms. These are the findings of Paula (1988) in his study of establishing the characteristics of the "High-tech entrepreneur". This is a personal value that is inborn to most entrepreneurs. They are not like strategic managers who are rapidly mobile and always looking for "greener pastures" in other suitable firms and who may not necessarily have an emotional attachment with the firms they manage.
It is often hypothesized that entrepreneurs compared to managers, are more susceptible to ethical aspects of decision making in any business firm. This is due to the varying types and degree of financial risks which entrepreneurs face. Ethical standards any business enterprises are closely associated with an individuals' value system (Bucar, 2009). An entrepreneur will likely succeed in his/her business development and innovation, when motivated by the society in which he/she operates. This is closely related to the social contact theory proposed years back by Thomas Hobbes and John Locke-which is akin to granting an entrepreneur the "license' to do business within a certain environment. Our "model entrepreneur" is two-fold; he/she understands the technological aspect of his/her business as well as the social aspect of it and of the environment within which the business operates. The normative social contract of businesses assumes "an implicit consent between societal members and businesses in which the societal members grant rights of existence to businesses in return for certain specified benefits" (Hasnas, 1998, p. 29). Why does Bill Gates traverse the world, granting medicine and mosquito nets to affected communities in Africa? This is a practice of Corporate Social Responsibility (CSR) and it secures societal acceptance and recognition. To succeed, an entrepreneur needs to be diversified. Indeed America is the largest world donor; much of this comes from successful entrepreneurs, evidence of their inner personal values.
A noteworthy theme in the personalities of our "model entrepreneur" is the desire for control, a feature that can have negative effects on a business venture. This affects the entrepreneur's ability to give direction, take others' orders and get along with others-often presumed as the "darkest side of entrepreneurial personality" (Paula, 1988). Freedom from control by others is an inborn value and outstanding objective of the "model" entrepreneur in building a successful enterprise. Personal values may in most cases act as drivers of our behavior and this point to the values of the entrepreneur (Hemingway, 2005).
Employees may not always act rationally in the interests of the shareholders (of which the entrepreneur may own the largest percentage). Entrepreneurial discretion, largely determined by his/her personal values is of significance in any business venture. Personal values are recognized as essential components in the process human perception due to their correlation with social norms and emotions (Postman et al, 1986). Personal values are an important aspect of human-decision making. They determine attitude and behavior formation. We cannot ignore them in "making" the "model entrepreneur". Personal values seem to have influenced the success of most of her successful entrepreneurs.
Entrepreneurs are not necessarily successful managers as we have observed. Most of them may not realize that their success may depend on team works, team spirit, team efforts and loyalty to the firm. Their desire to dominate and control may negatively affect their ability to manage their ventures effectively and efficiently. It is agreeable that the greatest challenge to most entrepreneurs is finding, maintaining and motivating a managerial team. They hardly delegate or relinquish authority to managerial team. Our "model entrepreneur" is research-oriented, with a passion for continuous development. This may bring conflicts in the firm leading to dismal performance.
The value system of an entrepreneur determines how he/she behaves and relates with staff and consumers. Technically a good entrepreneur is both a manager, a researcher and an innovator,-tasks that require an individual of impeccable integrity and character. This is because he/she is the "portrait" of the business venture.
Nurturing a Sustainable Business Venture: The Strategies
It is a common saying to hear people from the rest of the world saying "I am chasing the American dream". This is because every individual wants to be successful in life. In this section, this study focuses on a possible model that may be useful in establishing a strategy that can aid a society or an individual to become a successful entrepreneur. Whether it is has been applied by leading entrepreneurs or not is a debate. Entrepreneurship is the successful application of innovative ideas that translate into new customer values. It is a result of creative thinking and the application of personal values to create a product that is valuable to consumers.
Impressive and innovative strategies are what differentiate entrepreneurs from followers. The American desire to maintain a superpower status after the end of Second World War and later the cold war may have necessitated the need for continuous innovation. This may have given American entrepreneurs an edge over others from the rest of the world. Possession of capital or entrepreneurial skills doesn't necessarily mean that, one will succeed in establishing a sustainable business venture automatically.
Social Scientists have developed the Enterprise Development Process (EDP), which holds that, given different societies with equal resource endowment, those societies with resourceful and enterprising individuals are likely to record a higher output than the others. This is directly linked to the "quality" and accountability of its human resources. The individual's capability as well as the macro-economic environment will determine the outcome there is need for continuous and constant employee development through training and mentoring. Employees in today's business environment need to understand both the technical and social dynamics of the business environment. Employees, irregardless of their job level can act as constant source of new ideas and creative innovation that can add value to a business environment.
Technology has often changed the way business is done today. We are not in the mercantilist period. Goods and services today take a shorter time to manufacture and deliver; consumers' tastes and preferences are constantly changing. There is also the increased focus on the impact of certain products on the environment and societal value. Therefore for any business to remain competitive, today, there is need for strategic thinking and contestant innovations. . Figure 1 below summarizes the interactions that exist within a society and that may determine the success or failure of an entrepreneur. Any society is unique in its own way, but this model provides a prototype that can be applied in different societies. How the individual interacts with his/her environment will likely determine his/her most suitable strategy.
Successful interaction with an entrepreneurial environment will determine the choice of entrepreneurial strategy chosen by an individual or organization. This requires and individual with strong values because in most cases business environments are complex, dynamic and require interaction with different factors.
Figure1. Source: CEFE International (2009)
Macro Environment; refers to activities in which the individual has lesser influence on but they have impact on his/her entrepreneurial capability (culture, economy, education system, legal framework).
Meso Environment; denotes conditions which the individual may influence and may have a strong impact on him/her (markets, resources, institutions).
Micro Environment; refers to circumstances the individual can strongly influence and which have a strong influence on the Individual (Infrastructure, Family Culture, domestic Situation).
Capability; refers to combined inherited talents and acquired skills (Physical Attributes, Education, Acquired Skills, Experience).
Motivation; refers to the response or reaction to a given situation (Personal Values, Level of Commitment, Likelihood of Success).
Personal Resources; denotes the tangible assets that individuals have at their immediate disposal (Inherited, Acquired Networking Ability).
Outcomes: the likelihood of success.
This EDP focuses both on the individual and the society and it is important for any society that seeks to develop a productive entrepreneurial culture. Human resource development and training proves vital.
Our "Model Entrepreneur": Tips
Michael Porter said that "a business cannot succeed without creativity". In these turbulent times of doing business sustainable comparative advantage lies in our capacity of individuals or organizations to innovate-creating something new (Mcbeth and Rimac, 2004, 17). This largely depends on the skills and creativity of individuals. Entrepreneurship is about finding a way in opaque barriers and reacting to unexpected challenges on the way. In this ever-changing business environment, the only way to survive in the near century is to ensure constant renewal and innovation managed through entrepreneurship.
Continuous innovation and entrepreneurship doest not naturally occur in organizations. They are developed and it is the responsibility of management in any firm to determine the suitable degree of entrepreneurship for the firm (p. 19). Additionally firms and individuals who brand themselves "entrepreneurs" should adopt proactive rather than adaptive strategies if they want to remain innovate and relevant. Societal values and customer demand are changing; technology is also altering the tradition of "how business was done" and this is driving business firms to be "opportunity focused".
Mcbeth and Rimac (2004) give the seven dimensions of an entrepreneurial orientation as follows;
Strategy: Risk-aware and opportunity-focused, proactive and long-term orientation (5-15 years).
Risk Management; Stepwise commitment of resources with minimal exposure at each stage, Attracts resources to potential opportunity.
Corporate Culture: Attract, Acceptance of change, intrinsic motivation.
Organizational Structure; Empower, Flexibility and autonomy, Flat, team-based, people-centered.
Systems; Open, networked, flexible, interconnected, Results focus, self-correction, communication and coordination.
Reward Philosophy; Motivate, Based on value creation, team-based, individualized rewards, Promote creativity and innovation.
Learning; Integrative, ongoing, and experiential, focused on individual growth.
"Creativity can solve almost any problem. The creative act, the defeat of habit by originality, overcomes everything." George Lois
The purpose of this paper was to determine the extent to which "personal values" determine the success or failure of an entrepreneur. The position held was that "personal Values" determine to large extend the success or failure of an entrepreneur, whether in America or any other part of the world. Several objectives were set forth to establish the truth of this matter and the findings supported by credible sources found that;
Personal values are what define a person, his/her character and subsequent behavior. It is the driving force for entrepreneurship or any other business venture, because it is closely related to the moral perceptions of an individual. Entrepreneurship is not all about having enough money or capital to invest, it is about the inner person and holding other factors constant, the drive to a successful entrepreneurship is determined by his/her personal values whether in America or any other society.
Personal values may determine the success or failure of an entrepreneurial activity. This because entrepreneurs always try their best to control, own and manage their ventures. The desire to do so is inborn-driven by ones' personal values. This is akin to how a mother owns and nurtures a child till its maturity. Entrepreneurs are not like managers who may not take risks that entrepreneurs can take. Entrepreneurs rarely delegate or relinquish authority to management completely. They have a personal desire to drive each and every process of a firm. Additionally entrepreneurs are "pictorials" of their ventures.
The success of an entrepreneur may be determined by other factors that ay influence his/her success; the macro-economic environment, education system and institutions among others. The interaction of these factors leads to some societies/individuals being more entrepreneurial than others. The secret for successful and sustainable entrepreneurship is continuous innovation and creativity-determined by an individuals' or a firms" skills and capabilities.
God created you and me to in his own image and likeness, and gave us power to conjure, subdue and rule the world. He gave us dominion over everything that he created. If you have that passion, talent and unique skill, make use of it and inspire others before it expires.
"The things we fear most in organizations-fluctuations, disturbances, imbalances -are the primary sources of creativity." Margaret J. Wheatley
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