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Competitive advantage and entrepreneurial power
The dark side of entrepreneurship
Nottingham Business School, The Nottingham Trent University, Nottingham, UK, and
School of Management, University of Southampton, Southampton, UK Abstract
Purpose – To show that the inability to adapt to a series of crises caused by business development is one of the principal causes of failure for all organisations and that one of the primary components in small business success must be the managerial competence of the principal actors, inevitably the owner-manager. Design/methodology/approach – This paper examines the divergence between the prescribed and assumed models of entrepreneurial behaviour provided by contemporary management theorists and the real, observed and reported behaviour of small business practitioners and owner-managers. It reports on case study examples and highlights the dichotomy between expected and actual behaviour in typical management situations. Findings – The paper suggests that the almost egotistical attitude displayed by many entrepreneurs, constitutes an abuse of the trust and the power placed in the hands of small business owner-managers and that in extreme instances, the abuse of entrepreneurial power may lead directly to the failure of the small ﬁrm. Originality/value – Many surveys of small business failure and sub-optimal performance often suggest situational and operational causes and explanations. This paper offers a different perspective for future research because the cause may be seen to lie with the apparently non-rational behaviour of the entrepreneur or owner-manager who does not adhere to the “rules” and expectations of classical management theory. Keywords Entrepreneurs, Competitive advantage, Management power Paper type General review
Introduction The Bolton Report (1971) explicitly highlighted the fervently guarded sense of independence, which is seen to be a prime motivator for many small business owner-managers. Contrary to popular belief and a great deal of economic theory, money and the pursuit of a personal ﬁnancial fortune are not as signiﬁcant as the desire for personal involvement, responsibility and the independent quality and style of life which many small business owner-managers strive to achieve (MORI, 2001). However, the pursuit and eventual attainment of independence brings with it the power to inﬂuence events and other people surrounding the small business and the owner-manager and other key actors. Whilst there can be little doubt that the power, capability and inﬂuence of the entrepreneur, which according to Chell et al. (1991) “the rarely gifted individual exhibits” are of vital importance in determining the creation and development of the organisation, the relentless drive for personal achievement may inhibit the growth potential and ultimately, the survival potential of the small ﬁrm.
Journal of Small Business and Enterprise Development Vol. 12 No. 1, 2005 pp. 9-23 q Emerald Group Publishing Limited 1462-6004 DOI 10.1108/14626000510579617
Entrepreneurs and entrepreneurship Society appears to be fascinated by entrepreneurs who start up small businesses and facilitate their growth and development. Entrepreneurs are commonly seen as the self-made business people of today, creating their own wealth rather than inheriting it. The popular press, as well as more serious academic and business publications, frequently contain articles describing their business and social activities and exceptionally successful entrepreneurs, such as Richard Branson, Anita Roddick and Chris Evans are revered as the role models which aspiring business graduates should seek to emulate....
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