A PAPER SUBMITTED IN FULFILMENT FOR THE COURSEWORK IN ENTREPRENEURSHIP AND SMALL BUSINESS MBA 657
There is no doubt that all over the world small and medium business enterprises (SMEs) have been identified as vehicles driving national economic growth and development and more often than not the initiators of these SMEs are entrepreneurs. Indeed Brockhaus (1987) states “anyone who starts a small business is an entrepreneur”. The term “entrepreneur” was coined from the French language and Cantillon (1725), was the first to describe the entrepreneur in his seminal work published post hum in 1755 as “a person willing to take risk and able to manage uncertainty”. A variety of definitions of who an entrepreneur is has been given over the years, Olson (1987) defined an entrepreneur as a “risk taking and innovative individual who establishes and manages a business for the purpose of profit and growth”, Vesper (1987) defined entrepreneurship as “the art of operating in an exceptional way”. Earlier, Mill (1934) had emphasized that the features of direction, supervision, control and risk taking characterize the entrepreneur and the affinity for risk taking is what distinguishes the entrepreneur from the manager, Schumpter (1934) posited that innovation rather than risk taking is the most important distinction between the entrepreneur and the manager. So what really is the difference between the entrepreneur and the manager? If entrepreneurs are not managers, what common ground exists between them and what role, does managerial ability have to play in entrepreneurial success. The objective of this paper is to identify managerial functions and abilities contributing to the success of entrepreneurship and because SMEs are entrepreneurship driven, it is hoped that the paper will serve to provide useful insights for the management of SMEs and consequently economic growth and development.
Small entrepreneurs lead the way in developing ideas; they are responsible for more than half of all innovations, 67% of inventions and 95% of radical inventions since World War II. According to the Global Entrepreneurship Monitor (GEM: 1999), one third of the differential in national economic growth rate is due to the impact of entrepreneurial activity, but of course successful entrepreneurial activity. Entrepreneurs are characterized by the following features: innovation, intuition, imagination, ambition, drive, hard work, determination, resourcefulness, incisiveness, foresight, responsibility, integrity and a moderate risk taking nature. Be it as it may, will the possession of all or most of these features guarantee that an aspiring entrepreneur will be successful? According to Owualah (1999), “the success or failure of any small business firm is neither an abstract phenomenon nor a matter of gamble. Whereas good management is a factor that determines a small firms’ survival and success, bad management is the only factor that determines it failure”. If this statement is true it means that to keep from becoming a failed entrepreneur, a good managerial ability is required. However, is it enough to learn the basics of management as a pre-requisite to business success or is there more to being a successful entrepreneur? In addition, if there was one critical factor contributing to the success of entrepreneurs, what would it be? Many factors such as culture, personality, perception, background, intelligence and exposure amongst others have been identified as important in influencing the entrepreneurial process. For instance, it has been observed that people from a less privileged background could be more aggressive and pushfull when it comes to accomplishing task and this could be due to the fact that they are used to struggling for survival. This could be a critical factor of success when it comes to breaking thru barriers...