The Skills And Characteristics Of Successful Entrepreneurs Business Essay
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You are working as a trainee for a consultancy company whose niche is travel organisations. Your supervisor wishes to establish a map of the key factors for small and medium-sized businesses to be successful in the travel and tourism industry. She has asked you and the other trainees of her team, to each select a successful entrepreneurial firm in the travel and tourism industry, and research the development of the company as well as the skills of the entrepreneur.
The student evaluates the key factors, such as organisational structure, resources, management skills that have made the company successful (e.g. effective use of physical, human or technological resources and strength of management team, etc.)
In human history, entrepreneurs played a key role in the technological, economic and social development. The word "entrepreneur" and "entrepreneurship" are widely used in economic literature since Richard Cantillon in his book written in 1755, Essay on the Nature of Commerce in General used them as terms for the first time. Today, research on entrepreneurship concerns many areas including finance, management, cognitive sciences and sociology. In economic literature there is no clear definition of entrepreneurship and this is due to its dynamic nature.
Generally, it could be said that â€‹â€‹entrepreneurship can be defined as follows (Carton et al. 1998:4):
Entrepreneurship starts with action, it concerns the foundation of a business and everything that is needed before the business is set up i.e. monitoring environment for finding opportunities, identifying and select the right opportunity, assess the viability of the new business etc.
The second dimension of entrepreneurship concerns business performance. Some academics suggest that growth is the main characteristic of a business. Quantitative development is characterized by the size of the business (turnover, added value), profitability and value (stockholder value). Quantitative goals are related to the quantitative ones in order to achieve business development. Other qualitative goals are competitive position, product quality and customer service. Drucker defined entrepreneurship as a systematic and professional activity giving therefore, another dimension in entrepreneurship.
Sharma & Chrisman (1999:12) defined two sub-concepts of entrepreneurship. The first one is focused on the characteristics of entrepreneurship (e.g. innovation, growth, uniqueness) and the other is focused on the results of entrepreneurship (e.g. value creation).
Outcalt (2000:1) supports that the following three characteristics should be included in entrepreneurship:
Uncertainty and risk.
Complementary managerial capability and
He also suggests that none of these characteristics should be ignored because if they are ignored business risk is repeated.
The present report analyzes the skills and characteristics of successful entrepreneurs and focuses on Conrad Hilton and Hilton Hotels. Following, there is a self- appraisal on strengths and weaknesses and strategies to invigorate strengths. The second part of the report presents a brief history of Hilton hotels followed by an analysis of its key success factors.
Discussion of the skills and characteristics of successful entrepreneurs
According to Kaufmann & Dant (1998) the features of a successful entrepreneur are the following:
The entrepreneur is the one who takes the risk, s/he is self-motivated and can resolve crises.
The entrepreneur is a leader and can cause creative destruction.
The entrepreneur is someone who undertakes risky investments and possesses and unusual low level of risk aversion.
According to Johnson (2001) other characteristics of the entrepreneur include: accepting easily new information, be autonomous, make independent decisions, being able to find out opportunities in a quick changing and unsecure environment, being persistent and success oriented, have knowledge, personal integrity and reliability, being a good organizer and manager.
Gartner (1985) states the following six common behaviors of entrepreneurs:
Identifying business opportunities
Accumulation of resources
Marketing of products and services
Production of goods
Setting up a business
Responding to the environment (society and government).
Successful entrepreneurs control their destiny. They surpass their genetic inheritance and culture and they understand their uniqueness. They are excellent partners and they easily develop relations.
Not everyone can become an entrepreneur but s/he can acquire business habits.
Most people when they set up a business are not entrepreneurs. They are either owners of a small business or they are self-employed.
Their success is dependent on how they effectively "exploit" market segments, how much attention they give to customer values and how effective they are in the creation of a successful business strategy.Business attitude is considered as being more important for business success rather than knowledge and skills.
Conrad Hilton has an impressive personality and became an "icon" for his time. He purchased unprofitable hotels and turned them into profitable ones. His "magic formula" had to do with hotel cost control. He used to ask from this department directors to calculate their departments' costs and at the end of the month they had to evaluate the actual cost. This was the first time that hotels performed budgeting to acquire the correct amount of provisions and achieve, at the same time, a maximum gross profit. It could be suggested that each hotel department was acting as a business unit, controlling its individual costs and increase profits without harming customer service quality.
Hilton's tactic of purchasing hotels, renew and redecorate them was called "mining for gold". Conrad Hilton was not just a simple successful entrepreneur but also a statesman having influence to global leaders.
His personal philosophy was Hilton's corporate motto i.e. "World Peace through International Trade and Travel". He believed in friendly relations among nations that would boost tourism and tourist spending.
Hilton Hotels' architecture aimed at serving two goals: a) respecting the external environment of the city b) provide high operational efficiency that would make customers delighted.
Conrad Hilton was also a great philanthropist and set up a foundation but he also made personal presents to people worldwide. He believed in God and he was convinced that it is a natural duty to help the destitute.
Self - appraisal
I have decided to develop further my leadership skills. I am a good team player and I like to work with others but I find difficult to "impose" my opinion on others.
A general definition of leadership states that "a leader is someone who influences a group of people aiming at achieving a specific goal" (Graen & Uhl-Ben,1995:227).
3 Ps are related with the word leader i.e. People, Purpose and Person. The leader is someone who is very dedicated to a goal which he follows very strictly even if s/he has no followers.
A leader is someone who has a personal vision but needs others to make this vision become true. A leader must transfer his/her vision in such a way to others that his/her followers would share it and the goal will become common to all. S/he should be someone that his/her followers can trust. Some people can be more influential than others. This skill is attributed to leadership styles, the leader's personal characteristics and his/her persuasion skills.
The leader is someone who can cause big changes, someone who can handle effectively big crises. According to Goleman (2000:57), the leadership styles are the following:.
Coercive. It is the less efficient style since it underestimates employees' dignity. The leader terrifies and underestimates employees when they do the slightest mistake. As a style can be used only in urgent situations.
Authoritative. The leader has a vision, s/he motivates people by showing them that their work matches the vision of the organization. This style is not effective when the leader should lead a group of experts but it is a style that can be used in most cases.
Affiliative. The leader focuses on creating powerful emotional relations and then s/he receives the benefits of these relations i.e. employee loyalty. This type of leader offers positive feedback. It is a positive style but it should be better used when the leader wants to improve communication and raise the moral.
Democratic. Employees participate actively in decision making and in shaping the way they work. It is a positive style when the leader does not know which direction to follow and employees can consult the leader.
Pacesetting. The leader is very demanding and sets high standards. Employees feel that they are under continuous pressure. This style should be sparingly used but it is very efficient when employees are highly qualified.
Coaching. The leader encourages his/her employees and helps them to identify their strong points. This style is very efficient, however, it is used less. This style is very good when employees know their weaknesses but it is not effective when employees resist change.
During my studies, I have participated in various teams and in some of them I had to be the leader. I found out that the style I followed is the democratic one. However, I believe, that a leader should be in a position to change styles depending on the various situations s/he has to face and the personnel s/he has to manage.
Acquiring leadership skills is very important for entrepreneurship. Therefore, I have decided for the current period to attend leadership seminars, participate in as many teams as possible and read books on leadership and self-development.
A brief description of the nature of the company and an analysis of the company's historical development
Hilton belongs to the hotel industry. Conrad Hilton bought his first hotel in 1919. The name Hilton was given in 1924 to the first hotel constructed in Dallas. In 1947, Hilton became the first hotel company listed in New York Stock Exchange. In 1949 Hilton opened its Puerto Rico branch and in 1953 opened the first European Hilton in Madrid. Hotel expanded its business in casino hotels in 1970 by acquiring two casino hotels in Las Vegas. In 1996 it merged with Bally Entertainment Corporation and in 1998 it expanded in gaming operations.
Nowadays, Hilton owns more than 500 hotels globally. Originally, Hilton was involved in acquiring small and medium-sized hotels. It has changed its strategy from 1970 onwards. In 2006, Hilton became the biggest lodging company of the world. Hilton's recent strategy is franchising.
Key success factors
The key success factors of Hilton Hotels are the following:
Hilton is very customer oriented. It provides customers with excellent customer service and focused on meeting their needs satisfactorily. The service is provided by flexible and well trained employees and the products offered are of excellent quality.
Regarding people, Hilton reinforces team working and offers a pleasant working environment. By satisfying their customer needs, Hilton increases steadily its sales and profits. Costs, as mentioned above, are controlled but quality is not neglected.
Hilton engages its newly recruits in being in "customers' shoes" by experiencing the services offered before they start officially working at Hilton hotels. Hilton links personnel delivery to customer offering. Hilton focuses on employee training since it wants to have well coordinated teams offering superb customer service.
Hilton employees know that they have a specific career path and that the company is dedicated in their development.
Hilton is a service company and for service companies the factor "People" is very important thus Strategic Human Resources is also very important for Hilton. Hilton International has a three-five years HR plan. In 1998 it had launched its successful manager training program "Elevator". The program was aiming at recruiting highly qualified and talented graduates to become general managers. In cooperation with . Human Factors International (HFI), an HR company, Hilton launched the "virtual psychologist" i.e. the screening process is done online rather than consuming Hilton employees' time.
People recruited had to receive a short month training to make sure that they are highly talented people. Online recruitment has turned to be very efficient for Hilton.
"Esprit strategy" is another Human Resources strategy launched by Hilton International. For hotel businesses having satisfied customers is not enough, they have to be delighted. It is imperative for hoteliers to provide high quality services but these cannot be delivered without adequate employee training. "Esprit" focused on attributing rewards, respect and recognition to employees.
"Equilibrium" was another initiative that was undertaken. The purpose was to ensure that customers enjoyed a relaxed stay and balance their needs on work and leisure.
Apart from customers, Hilton wants to include value to the rest of its stakeholders namely partners, the community, owners, shareholders and team members. For achieving this goal, Hilton has introduced some recent strategies. It emphasizes training on brands that is delivered online, centralized web content and other training programs.
Progress is further measured and reported. Hilton has an internal management tool. This tool was expanded in other Hilton properties, therefore, opportunities that could lead innovation and efficiencies.
In addition, the standards on operation and construction was revised so as best practices are shared and adopted among the various properties.
Purchasing policies were also formulated to ensure that the best value for money is achieved so as the customers get the best products but also value for owners is delivered.
Modern literature on entrepreneurship moves from entrepreneurial characteristics to the behaviorist stage and is not focused on the type of personality that entrepreneurs have but on their activities and actions (Timmons 1999: 221).
Morris & Jones (1999:73) believe that the business process has behavioral components. Entrepreneurial behavior involves innovation, risk taking and initiative. The key for achieving the above is self-efficacy in other words, the belief that one can organize and execute successfully the necessary steps to achieve specific types of performance. This happens because it has been found that there is a positive correlation between self-efficacy and behavior and that this relationship is causal by nature (Bandura 1978:43).
Regarding innovation and creativity according to Schumpeter's theory only few entrepreneurs and for some time can be innovative. Those are the ones that pave the way for others others.
On the other hand, the issue of imitation has been neglected in the scientific literature of entrepreneurship. Ricoeur's ideas can contribute to the study of entrepreneurship by presenting a combination of imitation and creativity. This means that entrepreneurial behavior is based on imitation and repetition and it also has the element of creativity.
Being able to see entrepreneurship as creative imitation implies that imitation is considered a vital element of entrepreneurship. Linking creativity with imitation gives the impression that the business process is more accessible to the average everyday person and not just to a few special people, however not everyone of us is suitable for big business. The reason why not everyone can become a great business man is not due to the lack of creative ability or alertness. As it has been said by Schumpeter "each one of us is an entrepreneur since s/he can make new combinations."
Ricoeur's theory allows us to reflect broadly on the topic. The degree of creativity and how important it is for entrepreneurship is not doubted. Some people may be more prepared to become entrepreneurs. Past experiences have prepared them to become entrepreneurs. One aspect of imitation has to do with the association of prior experience with the future business actions. Ricoeur's theory enables us to look at entrepreneurship from an alternative point of view where the emphasis is on the role of creativity and imitation.
Some people may be more prepared to become entrepreneurs. Their past experiences have prepared them to become entrepreneurs. One aspect of imitation has to do with the association of prior experience with the future business action. Ricoeur's theory enables us to look at entrepreneurship from an alternative point of view where the emphasis is on the role of creativity and imitation.
Conrad Hilton was a successful entrepreneur almost a legend. He combined all the above characteristics i.e. innovation, risk taking and initiative. However, as Schumpeter said "every one of us can become an entrepreneur" .
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