Business Enterprises & Competences W’ton, 11/04/01 Oliver Weimann

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Content page 3

Introduction page 4

Entrepreneur Life Cycle page 5 Manager Life Cycle page 8

Comparison of Task’s page 9 Comparison of Skills page 12

Environmental Influences page 14

Conclusion page 16

References page 17

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Business Enterprises & Competences W’ton, 11/04/01 Oliver Weimann

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Entrepreneurial behaviour can be seen in various areas like sports, music, solidarity, etc. just to mention a few. In this context we have to focus on the business style entrepreneur to enable the comparison with the manager.

But what exactly does an entrepreneur and which characteristics he fits? Thereby even experts despair at the question what exactly makes an entrepreneur successful und which lacks leave him fail. "Entrepreneurship is an extremely topical subject. The concept of entrepreneurship is useful, however, only if it is careful defined. It is sometimes suggested that entrepreneurship is to be found mainly in high-technology industries or in owner-managed firms," ¹ but if we look in history entrepreneurs can be found in every branch. Moreover it would point out that an entrepreneurs is not just another manager, but a business owner. Otherwise it would lack concrete information about the differences between these two kinds of business leaders. "I am often asked what it is to be an ’entrepreneur’ and there is no simple answer. It is clear that successful entrepreneurs are vital for a healthy and competitive economy. If you look around you, most of the largest companies have their foundations in one or two individuals who have the determination to turn a vision into reality." (Richard Branson, 1995)

Even one of the greatest entrepreneurs of the last century does not have a concrete definition or explanation about entrepreneurship. Therefore we need to evaluate firstly which components influence persons to be entrepreneurs or managers.

"Certainly, internationally we can see that many of today’s dominant corporations, have been spawned by individuals with vision and, importantly, the commitment to turn that vision into a reality. What they have in common is that they saw an opportunity, commercialised it, and in the process created wealth and jobs that, hopefully, benefit the rest of the society. Such entrepreneurs are people who have the courage and self-belief to turn their own dreams into realities. Furthermore, they permeate all levels of society and every walk of life." ² We all know the influence and importance of these multinationals, which all are result of entrepreneurial processes. "Like many of us, the ’entrepreneurs’ have spotted a window of opportunity ... but unlike most of us they have acted on it." ³ Through skills "such as risktaking, good planing, assumption of responsibility, decisiveness, drive and foresight," ⁴ they have established organisations, which stayed healthy until nowadays. But these companies are now leaded by managers...

"People who specialise in applying judgement to problem-solving are, by definition, entrepreneurs." ⁵ Now we have a definition of an entrepreneur but this is rarely exact enough and moreover business managers in influential positions, such as heads of divisions and Cho’s are doing the same during strategic planing. Can we then define CEO' s as entrepreneurs as well?

¹ Casson, M.; 1990

Enterprise and Competitiveness ² Morrison, A.; 1998 Entrepreneurship: An international Perspective

³ Harrison, J. & Taylor, B.; 1996 Supergrowth Companies; Entrepreneurs in action

⁴ Morrison, A.; 1998 Entrepreneurship: An international Perspective

⁵ Casson, M.; 1990 Enterprise and Competitiveness

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Business Enterprises & Competences W’ton, 11/04/01 Oliver Weimann

To explain the required tasks and skills, similarities and differences of entrepreneurs and managers I invented the ’entrepreneur and the manager life cycle’. This concept followed the product life cycle because the entrepreneurial and manager life can be divided into different stages with various specialities, like the product life. It should give a better and more detailed understanding of required skills and forced tasks. As every theoretical concept the entrepreneur life cycle also provides exceptions, which will be outlined during explanation. The both decisive factors are ’age of the entrepreneur’ and ’level of responsibility for the society’. It does not mean that entrepreneurs mainly social orientated, more that "... entrepreneurs are ordinary human beings, seeking to do good for themselves in terms of material gain and social status." ⁶ But "in creating their own wealth, entrepreneurs also ’pollinate’, generating wealth creation opportunities for others, and with the potential to bring about positive consequences in the wider society." 7

Therefore we use these factors, which identify five different stages. It starts with education, goes over employment to self-employment, to leadership and finally retirement, which is shown more clearly in illustration 1, below.

Level of

responsibility for the society

The entrepreneur life cycle is divided into these five stages because surveys figured out that "the majority (of entrepreneurs) was what we described as SURIHVVLRQDO HQWUHSUHQHXUV. The professional entrepreneur ... had seen a long period of stability in business and most managers were content to enjoy the security afforded by a career spent in one firm. The recession then caused the contraction of many industries from, which emerged large numbers of professionally qualified individuals who were seeking new business opportunities. These were ready and available to fill the key roles in these emerging mid-sized companies." ⁸ The ’Education’ stage should not needed to be explained more detailed because of compulsory education throughout schools in the US, Europe and most Western states.

⁶ Morrison, A.; 1998

Entrepreneurship: An international Perspective ⁷ Morrison, A.; 1998 Entrepreneurship: An international Perspective

⁸ Harrison, J. & Taylor, B.; 1996 Supergrowth Companies; Entrepreneurs in action

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Business Enterprises & Competences W’ton, 11/04/01 Oliver Weimann

Followed by a stage of ’Employment’, which most entrepreneurs participate. Getting experience in business and taking first levels of responsibility for the society moulds this phase. Thereby just to mention the learning process is of enormous importance, which depends on person and situation. "Experience alone, however, is of little value if the individual cannot learn from it. If he is strongly attached to certain prejudices, or he feels that he would lose face (either with himself or with others) if he were to change his initial position, then he is unlikely to benefit from this experience." ⁹ So even in this early stage "IOH[LELOLW\RIWKRXJKWis very important, and most particular when the environment ’or person’ itself is undergoing major change." 10

The future business leaders get firstly involved in the process of business including leadership style, customer orientation and work sharing. "Breadth of experience comes from having ’hands-on’ experience in a wide variety of different situations, and in having had sufficient experience of each such that the experiences are to some extent representative of the actual situation." 11

A significant number of entrepreneurs, mainly in the US, never stayed at this stage because they started to develop their own businesses directly from scratch without participating of experiences in other companies. This depends, not surprisingly, enormous on business culture, which will be outlined later on. These entrepreneurs start directly in stage three, ’Selfemployment’.

The third stage ’Self-employment’ is defined as transforming an idea in reality. "Ideas are useless unless used. The proof of their value is only in their implementation. All too often people believe that creativity automatically leads to innovation. It doesn’t. The scarce people are the ones who have the know-how, energy, daring and staying power to implement ideas." 12

Thirdly follows a period of leadership, "understanding their markets and customers," ¹³ and flexibility of the organism.

Here the entrepreneurs have shown their talents in risk-taking and self-organisation most impressive. "Entrepreneurs are ambitious individuals with a strong passion to achieve. They are highly proactive and respond to challenges with enthusiasm, self-confidence and the determination that they have the potential to excel - to win. This motivation is driven by a need to achieve a combination of personal and economic goals ... As business persons, entrepreneurs are both goal and result oriented, setting ambitious but realistically do-able goals. While entrepreneurs seem to be motivated by a self-belief that they can succeed, that does not imply a complete lack of the fear of failure." 14

At the point another attraction is findable. Minorities of entrepreneurs leave their companies if these have been established in the market because of various reasons. Most important are lacks of challenge in established organisations, missing of entrepreneurial spirit and not sufficient levels of changing required skills.

⁹ Casson, M.; 1990

Enterprise and Competitiveness ¹⁰ Casson, M.; 1990 Enterprise and Competitiveness

¹¹ Casson, M.; 1990 Enterprise and Competitiveness

¹² Levitt, T.; 1981 Marketing Intangible Products and Product Intangibles

¹³ Harrison, J. & Taylor, B.; 1996

Supergrowth Companies; Entrepreneurs in action ¹⁴ Morrison, A.; 1998 Entrepreneurship: An international Perspective

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