Enterpreneurship Theories and Practice

Topics: Entrepreneurship, Entrepreneur, Trait theory Pages: 16 (5449 words) Published: October 1, 2008
This article highlights key issues / factors that motivated MrJohnston to start his business. These key issues will be analysed using the external and internal factors of entrepreneurship. The internal factors will include theories such as personality theories, behavioural theories and sociological and cognitive approaches studied by various individuals and groups. We will also apply the Krueger Model which is an integrated approach to entrepreneurship. We will briefly examine certain external factors that could contribute to / influence the behavioural characteristics of an enterprising individual, especially the cultural, political and economic conditions. We will also discuss Mr Johnston’s views and practices on enterprise, in comparison to the various approaches and how they have evolved over the years, and examine the factors that contributed towards his success and continuity so far.

There are various narrow and broad definitions that have been used by different authors to define an Enterprise. However, essentially in a narrow sense enterprise is a profit making firm that contributes to the economical growth (Bridge, O'Neill, & Cromie, 2003). In a broader sense however, enterprise is a culture. It’s the attitude of an enterprising individual towards many different areas including social, individual, group, economic etc. A definition by (Coffield & MacDonald, 1991) summarises the broader meaning nicely; “One can be enterprising both by making a million before one’s fortieth birthday and by shepherding passengers out of a burning aeroplane”. These considerations of narrow and broad meanings of enterprise and some of approaches we will look at should help us explore the attributes and behavioural characteristics of enterprising individuals, in this case Mr Johnston. Do all entrepreneurs create enterprising businesses? Does EOL have an enterprising culture? We might find some clues to this by analysing the ‘stages of business growth’ model. 2.1Stages of Development

Using (Churchill & Lewis, 1983) model for stages of business growth (see Table 1), EOL can be placed in the Take-off stage. The business has survived for eight years since launch and has grown from a turnover of under a million to eight million in 2007, and growing further. The business has also physically grown from one single office to four additional global territories and 10 regional UK offices. Table 1The five stages of business growth

Existence: staying alive by finding products or services and customers •Survival: establishing the customer base, demonstrating viability •Success: confidence in its market position, options for further growth •Take-off: opting to go for growth

Maturity: the characteristic of a larger, stable company There are other models, however, that have additional stages that come either prior to or after the Churchill and Lewis stages. A model proposed by the Forum of Private Business, for instance, does not stop at maturity, but includes the stages of ‘decline’ and ‘termination’, while the Krueger model (see section 3.6 below) recognises that the beginning of trading is not itself the start of the process but that there are stages before the formation of the business that are relevant to the development of the entrepreneur, which gives an understanding of the inception of the business. These stages have been summarised in figure 2.1 and adopted from (Bridge, O'Neill, & Cromie, 2003, p. 190). Mr Johnston has successfully created a business and taken it to the growth stage and it seems likely that the business will continue to remain in this stage for some years to come. His plan is to sell half the company now to the management (which has been accepted) and then continue to be involved as an executive chairman. ‘Continued growth and technical efficiency will soon get EOL noticed and one of the big players might desire to buy’ them out for their ‘brand presence and sound technological...

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