What is Entrepreneurship? Introduction, Dimensions, and 7 Types

Entrepreneurship: An Introduction

Entrepreneurship is an approach to management that we define as the pursuit of opportunity without regard to the resources currently available. Howard Stevenson opined that entrepreneurship is neither a set of personality traits nor an economic function. It is a measurable, cohesive pattern of managerial behavior. Therefore, entrepreneurial management is an existing business that requires policies and practices in the area of an enterprise’s appraisal of performance. The systematic measurement or appraisal of a company’s performance enables the entrepreneur to learn from the past to improve performance in the future.

Dimensions of Entrepreneurship

The six dimensions of entrepreneurship are as follows:

• Strategic Orientation
• Commitment to Opportunity
• Commitment of Resources
• Control of Resources
• Management Structure, and
• Reward Philosophy

1. Strategic Orientation: It describes the factors that determine a company’s formulation of strategy. An entrepreneurial orientation emphasizes opportunity. Entrepreneurs perceive that those opportunities exist in their environment and are not constrained by the availability of resources. It is this dimension that has led to one of the traditional definitions of the entrepreneur as opportunistic, or, more favorably, creative and innovative. However, the entrepreneur doesn’t need to identify new opportunities. Opportunities can be founded with a new mix of old ideas or the creative application of traditional approaches. Normally, enterprises tend to look for opportunities with an assured combination of both available human and non-human resources. Accordingly, the formulation of enterprise strategies depends on the opportunities available in the environment of the entrepreneur.
2. Commitment to Opportunity: It is evident that an entrepreneur’s creative or innovative ideas are not enough. Some innovative thinkers never get anything done. It is necessary to move beyond the identification of opportunities. However, they have to choose a better opportunity and commit themselves to implementing their innovative ideas. A simple act of taking a risk does not lead to success. They should have more knowledge of the area in which they operate. Their familiarity with their chosen field means they can recognize patterns as they develop and have the confidence to assume that missing elements will take shape as they foresee. This early recognition of missing elements in the identified opportunities enables entrepreneurs to get a jump on others’ commitment to action.
3. Commitment of Resources: The entrepreneur is also very concerned with the effective utilization of the resources available. The problem with entrepreneurship is determining what resources are necessary to pursue a given opportunity. There is a constant conflict between the amount of resources used or committed and the potential return. The entrepreneur attempts to maximize value creation by minimizing the resources set and by accepting more risk in the process. Hence, to make effective use of resources, he has to undertake a careful analysis of the commitment of resources to give shape to his business opportunity.
4. Control of Resources: Entrepreneurs should learn that resources are scarce and they have to decide over time what resources they need to implement their business ideas or run the enterprise successfully. They should know how to use, when to use, what to use, and where to use human and non-human resources. Proper control over such resources will help the enterprise achieve the desired goal of maximization of profits. There are certain resources that the enterprise never owns or employs. For example, a real estate enterprise employs an architect temporarily because the need for that resource is only temporary. Whenever the entrepreneur needs the resources temporarily, an enterprise can reduce the risk and fixed costs by not owning an expensive resource. Proper control over the use of resources helps the organization attain the goals set.
5. Management Structure: The entrepreneur wants knowledge of his progress via direct contact with all of the principal actors. He wants relations to be more formal, with specific rights and responsibilities assigned through the delegation of authority. The decision to use and rent resources and not to own or employ them requires the development of an informal information network. Informal networks arise when the critical success elements cannot be contained within the bounds of a formal organization. Entrepreneurial management is needed for the coordination of key non-controlled resources. It is because there is a need to communicate with, motivate control, and plan for resources outside the organization.
6. Reward Philosophy: The enterprises differ in their philosophy regarding reward and compensation. They focus more on the creation of value. In the value-driven philosophy, enterprises tend to base compensation on performance, which is closely related to the creation of value. Compensation is often based on individual responsibility and performance relative to short-term profit targets. Reward in such organizations is often heavily oriented towards promotion to increased responsibility levels. The individuals in the organization expect to be compensated in proportion to their contribution rather than merely as a function of their performance relative to an arbitrary peer group. The increased competition for talented people in the organization creates pressure for the enterprises to reward them in proportion to their contribution.

Thus, these six dimensions of entrepreneurship help the entrepreneurs identify opportunities in formulating business strategies, make them use the resources effectively and monitor efficiently, formulate a desired management structure, and design a rewarding policy for the contributions made by the individuals in the organization.

Types of Entrepreneurships

Entrepreneurship remains the only key to the effective and adequate eradication of poverty in developing countries. It is because when people cannot think, they are not willing to work but instead wait for what the government will do for them, which does not improve one’s life or the country at large. Hence, there is a need for increased investment in entrepreneurship to have more and more industries. We find different types of entrepreneurships in our country, such as small business entrepreneurship, scalable startup entrepreneurship, large company entrepreneurship, social entrepreneurship, intrapreneurship, technopreneurship, cultural entrepreneurship, international entrepreneurship, netpreneurship, ecopreneurship, etc. Some of these entrepreneurs are discussed below:

1. Intrapreneurship: Intrapreneurs are those entrepreneurs who work on any innovative idea or product while working within a large organization. When an individual possesses an innovative skillset within the organization, the individual has the support system that entrepreneurs don’t have. If he fails, he won’t suffer financially. Usually, the failure prepares the individual for the next venture.
2. Technopreneurship: A technopreneur is an entrepreneur who is technology savvy, creative, innovative, dynamic, dares to be different, takes the explored path, and is very passionate about their work. Technopreneurship can be industry-specific. The best examples of technopreneurs are Bill Gates, Steve Jobs, Sergey Brin, and Larry Page, who developed Microsoft, the iPod, and Google, respectively.
3. Cultural Entrepreneurship: This entrepreneurship belongs to the development of arts and culture as a part of the profit motive. Cultural entrepreneurship is a win-win scenario, developing a new audience as well as the opportunity to create revenue to invest back into cultural content.
4. International Entrepreneurship: International business occurs when a business sells its products or services to a purchaser who lives in a different country. Hence, the entrepreneur who intends to carry on international business has to gain knowledge of export and import rules and regulations and other legal formalities.
5. Netpreneurship: It refers to a small start-up that is solely online-based with no physical office. Their website, blog, or e-presence in the office. E.g., it can be a freelancer working from home, taking projects online, or launching e-marketing campaigns.
6. Ecopreneurship: Ecopreneurship is deliberate human innovation to expand the supply of natural resources and improve environmental quality. It was recently developed and described as an innovative activity for the creation of new enterprises. It is the process of creating additional value for people.
7. Social Entrepreneurship: Social entrepreneurs carry out business with innovative solutions to society’s most pressing social problems. They are ambitious and persistent, tackling major social issues and offering new ideas for large-scale changes. They do not leave social needs to the government or business sectors. They identify the needs of society and solve the problem by changing the system, spreading the solution, and persuading society to move in different directions.