Entrepreneurship_300

1.0 Introduction Every year, many millions of dollars are spent on starting new enterprises. An entrepreneur is a person who accountable for risk and outcomes, with appropriately managing the life cycle of the firm and to overcome the factors affecting the growth of a firm (Meijaard, Brand and Mosselman 2005). The critical factors leads to succeed in business will be how a business owner managing entrepreneurial growth. Sunpizz Sdn. Bhd. has been chosen as an entrepreneurial firm for interview project, which will be discuss in the later section. 2.0 Company Background Sunpizz Sdn Bhd was owns by Mr. Andy Yek Hock Siang, who was graduated under Bachelor Science (BSc) in Quantity Surveying at University of Port Mouth, London. Currently, Sunpizz Sdn Bhd located at Lot 1398, Centre Point Commercial Center, Miri. Sunpizz Sdn Bhd transforms themselves from traditional hand drawing designers and carpenters in making the furniture into new innovation of cutting edge 3D technology, where the design are done via computerized 3D sketch up and the furniture is selected from design catalogues and can be custom fit to size, color which best suits your preferences (Sunpizz 2010). In 3 years time, Sunpizz Sdn Bhd are now boost themselves with increasing franchises in Malaysia, which are now able to see their ventures in Kuching, Sibu, Bintulu, Miri, Brunei, Kota Kinabalu and Kuala Lumpur. 3.0 Managing Entrepreneurial Firm’s Growth Accessing the entrepreneurial firm’s growth will be the crucial pathway which leads the success of business enterprises. A successful entrepreneurship has to discover the golden globe of opportunities (Boeker and Wiltbank 2006). Nevertheless, it is a great challenge as continuous changing economic scale and the perceptions of the societies nowadays. Thus, the survival and growth of a business needs the entrepreneurs to equip themselves with strategic, tactical skills and abilities in innovation, finance and business acumen in an effort (Forbes 2005). These knowledge and abilities would be essential in part of the business’s formulation (Bradley, Wiklund and Shepherd 2010). 4.0 The Life Cycle of a Venture The graph below represents the different stages of a venture life cycle. It involve the development of a new venture, activities during start-up, growth of a venture, stabilization of business and decision for innovation or decline of the venture (Frederick and Kuratko 2010). Figure 1.1 Venture’s Life Cycle (Frederick and Kuratko 2010). 4.1 Venture Growth In Figure 1.1, it represents the traditional venture’s life cycle of a business. Sunpizz Sdn Bhd are now under venture growth. The growth stage would require some minor changes in the entrepreneurial strategy. The external environment would affect the business strategy such as the potential competitors, emerging competitors and other market forces. The growth of the ventures would typically meet the administration tasks of the firm (Forbes 2005) s. For instances, the entrepreneur would relinquish the enterprise or move to other firms which resulting in the failure of the business. Stage of growth often signals the beginning of a metarmorphosis from a personal operated venture transform into group-structured operation (Frederick and Kuratko 2010). Hence, entrepreneur need to analyze their managerial styles, to realign behaviors and time management, which will be useful for entrepreneurs whose enterprise are in the growth stages. 5.0 Key Factors during the Growth Stage When entering the venture growth, there are mainly four key factors an entrepreneur needs to consider. Firstly, control of the entrepreneur firm would be discussed, followed by the sense of responsibility on entrepreneur (Scott 2006). Next, tolerance of failure would examine how a firm manages degree of failure. The last is the changes an entrepreneur need to retain from time to time (Frederick and Kuratko 2010). Each of these factors would affects the firm growing towards either succeed or failure. 5.1 Control During the growth stages of the entrepreneur firm, the growth would creates problems in command and control. The entrepreneur will need to consider the current control system and resources allocation system which sets the control of a venture (Datta, Guthrie and Wright 2005). It ensures that the firm was moving towards direction of control and participation. Eventually entrepreneur holds great importance in controlling the wide operations of the firm. 5.2 Responsibility When a company grows, the perception of dissimilarity between the authority and responsibility becomes more obvious. The entrepreneur has to create a sense of responsibility to be more flexible, innovative, and supportive (Forbes 2005). It is essential for all the employees to take parts in all the innovative activities and shared responsibility. This could encourage the employees handle the job with responsibilities and minds the consequences after it (Scott 2006). 5.3 Tolerance of Failure At the growth stage, maintaining tolerance of failure is extremely important. There are certain degrees of failure as opposed to punishment of failure when an entrepreneur firms continually innovate and grow, which are moral failure, personal failure, and uncontrollable failure (Frederick and Kuratko 2010). Moral failure known as failure of internal trust which serious on mutual expectation and trust. Secondly, personal failure known as the lack of expertise or application and the failure would be shared by the firms or particular individual (Henley 2005). Thirdly, uncontrollable failure is caused by macro-environment such as resource limitation, strategic plan and market trends. Overall, top management need to analyze thoroughly to prevent these occurrences. 5.4 Change An entrepreneur should also retaining innovative and opportunistic posture towards growth stages as made immediate changes to the firms planning, operations and implementation (Buseneitz and Barney 2007). Entrepreneur should holds flexibility in the continuous changes of market environment. For instance, most of the ventures will involve series of marketing stages at the growth stage. The marketing strategies had developed to serve different market needs. A successful would adopt appropriate marketing strategies and make immediate changes after deeply discovers the current market trends. Thus, entrepreneur would introduce unique selling proposition (USP), which the other competitors unable to provide certain products or services of this uniqueness (Echols and Tsai 2005). Therefore, it is prominent for entrepreneur to make immediate managerial response to different environmental situations. 6.0 Unique Managerial Concerns of Growing Ventures There are some challenges that during the growth of a ventures, typically how the firm positioning itself in the market and recruitment of the right people (Cho and Pucik 2005). These challenges might obviously shapes the firms in long term businesses running. The managerial concerns are more like significant to small business and important to entrepreneurs. 6.1 The Distinctiveness of Size The size of a firm would decide the size of the market it can serve. This happened as the geographical areas of the firm, which it only provides products and services to certain region or state. With the emerging and potential competitors which increasing nowadays, it had become a threat for a firm to be succeed in their business (Frederick and Kuratko 2010). The customers would have more mindsets in considering the different products offering by number of firms in the market, as the customers would decide the quality of the products and the services provided. Hence, it is a challenge for the firms to positioning itself to gain more market coverage (Echols and Tsai 2005). As sooner the competitors would learn through the experiences and switching the buyers’ decision. As part of that, the entrepreneur need to re-positioning and de-positioning in year by year basis to identify competing product which suit the customer’s preference and market demands. In addition, typically smaller firms would encounter higher ordering costs for the inventories as they do not receive quantity discounts and have to pay higher prices (Smith and Tushman 2005). In the other hand, smaller firms would have more flexibility as compared to large firm, which the decision makings can be made and implemented immediately (Frederick and Kuratko 2010). Besides, the marketing or service could be adjusted immediately as their competitive advantage. Smaller firms tend to have more constant communication with the community, as involvement of entrepreneur to adjust the products or service to suit market needs are visible. Eventually, the entrepreneur would have more personal contact with the customers in smaller size of firms which builds good relationship with the customers and improve customers’ loyalty. 6.2 The one-person-band syndrome In today’s world, many entrepreneurs start a business alone or with their family members. When the entrepreneur encounters certain problems, he/she would need to handle the risk personally. The one-person-band syndrome occurred when the entrepreneur need to retain all the decision-making authority (Smith and Tushman 2005). Recruitment of the employees is an example, recruitment of the employees nowadays are more difficult, as most of the major players in the business world recruiting people via ‘headhunters’, which they grab the talented people before any get one of them (Frederick and Kuratko 2010). It is very time consuming of an entrepreneur to recognize the candidates with appropriate skills and abilities through interviewing by the entrepreneur himself (Echols and Tsai 2005). Hence, the entrepreneur could delegate the recruitment tasks to HR department or administration. Moreover, the one-person band would restrict the growth of the firms, because the entrepreneur would have limited ability and skills (Gelderen, Sluis and Jansen 2005). So it is more beneficial for an entrepreneur to recognize the importance of delegation. 6.3 Time Management Time management is crucial for an entrepreneur to success. It is challenging for an entrepreneur to manage time more efficiently and carry out managerial activities (Endres and Woods 2006). There are four steps which are assessment, prioritization, creation of procedures and delegation. Assessment is where entrepreneurs list out the daily operations and tasks and rank them according to the importance (Ferrante 2005). While prioritization is entrepreneur examined his or her ability to devote necessary time to the task. Next, creation of procedures would be encompasses the repetitive daily activities and to be handled by employees. Lastly, delegation is whereby the entrepreneur would delegate different tasks for the employees to avoid one-person-band syndrome (Frederick and Kuratko 2010). 6.4 Continuous Learning An entrepreneur would never stop learning and should be adapted to the constant changing of market trends and environment. Entrepreneur would need to make immediate changes to their products and services as to maintain the competitive edge (Brush, Ceru, Blackburn 2009). 7.0 Conclusion In conclusion, a successful entrepreneur would able to regulate entrepreneurial firm growth and to avoid the firm towards failure, as he or she should mind the factors that would affecting the growth of a firm and apply managerial styles from time to time to overcome the factors and challenges affecting the growth of a firm. (1620 words) 8.0 Reference Boeker, W., and R. Wiltbank. 2006. New Venture Evolution and Managerial Capabilities. Organization Science 16 (2): 123-133. JSTOR. http://www.jstor.org.dbgw.lis.curtin.edu.au/ (accessed March 20, 2011). Bradley, S. W., J. Wiklund, and D. A. Shepherd. 2010. Swinging a double-edged sword: The effect of slack on entrepreneurial, management and growth. Journal of Business Venturing 23 (1): 1-34. ScieceDirect. http://www.sciencedirect.com.dbgw.lis.curtin.edu.au/ (accessed March 20, 2011). Brush, C. G., D. J. Ceru, and R. Blackburn. 2009. Pathways to entrepreneurial growth: The influence of management, marketing and money. Business Horizons 52 (5): 481-491. ScieceDirect. http://www.sciencedirect.com.dbgw.lis.curtin.edu.au/ (accessed March 20, 2011). Buseneitz, L. W., and J. B. Barney. 2007. Differences between entrepreneurs and managers in large organizations: Biases and heuristics in strategic decision-making. Journal of Business Venturing 12 (1): 9-30. ScienceDirect. http://www.sciencedirect.com.dbgw.lis.curtin.edu.au/ (accessed March 20, 2011). Cho, H. J., and V. Pucik. 2005. Relationship between Innovativeness, Quality, Growth, Profitability, and Market Value. Strategic Management Journal 26 (6): 555-575. JSTOR. http://www.jstor.org.dbgw.lis.curtin.edu.au/ (accessed March 20, 2011). Datta, D. K., J. P. Guthrie, and P. M. Wright. 2005. Human Resource Management and labor Productivity: Does Industry Matter. The Academy of Management Journal 48 (1): 135-145. JSTOR. http://www.jstor.org.dbgw.lis.curtin.edu.au/ (accessed March 20, 2011). Echols, A., and W. Tsai. 2005. Niche and Performance: The Moderating Role of Network Embeddedness. Strategic Management Journal 26 (3): 219-238. JSTOR. http://www.jstor.org.dbgw.lis.curtin.edu.au/ (accessed March 20, 2011). Endres, M. A., and C. R. Woods. 2006. Modern Theories of Entrepreneurial Behavior: A Comparison and Appraisal. Small Business Economics 26 (2): 189-202. JSTOR. http://www.jstor.org.dbgw.lis.curtin.edu.au/ (accessed March 20, 2011). Ferrante, F. 2005. Revealing Entrepreneurial Talent. Small Business Economics 25 (2): 159-174. JSTOR. http://www.jstor.org.dbgw.lis.curtin.edu.au/ (accessed March 20, 2011). Forbes, D. P. 2005. Managerial Determinants of Decision Speed in New Ventures. Strategic Management Journal 26 (4): 355-366. JSTOR. http://www.jstor.org.dbgw.lis.curtin.edu.au/ (accessed March 20, 2011). Frederick, H. H., and D. F. Kuratko. 2010. Entrepreneurship Theory, Processes, Practice. Australia: Cengage Learning. Gelderen, M. V., L. V. D. Sluis, and P. Jansen. 2005. Learning Opportunities and Learning Behaviors of Small Business Starters: Relations with Goal Achievement, Skill Development and Satisfaction. Small Business Economics 25 (1): 97-108. JSTOR. http://www.jstor.org.dbgw.lis.curtin.edu.au/ (accessed March 20, 2011). Henley, A. 2005. Job Creation by the Self-employed: The Roles of Entrepreneurial and Financial Capital. Small Business Economics 25 (2): 175-196. JSTOR. http://www.jstor.org.dbgw.lis.curtin.edu.au/ (accessed March 20, 2011). Meijaard, J., M. J. Brand, and M. Mosselman. 2005. Organizational Structure and Performance in Dutch Small Firms. Small Business Economics 25 (1): 83-96. JSTOR. http://www.jstor.org.dbgw.lis.curtin.edu.au/ (accessed March 20, 2011). Scott, A. J. 2006. Entrepreneurship, Innovation and Industrial Development: Geography and the Creative Field Revisited. Small Business Economics 26 (1): 1-24. JSTOR. http://www.jstor.org.dbgw.lis.curtin.edu.au/ (accessed March 20, 2011). Smith, W. K., and M. L. Tushman. 2005. Managing Strategic Contradictions: A Top Management for Managing Innovation Streams. Organization Science 16 (5): 522-536. JSTOR. http://www.jstor.org.dbgw.lis.curtin.edu.au/ (accessed March 20, 2011). Sunpizz. 2010. http://www.sunpizz.com/(accessed March 20, 2011). 9.0 Appendix Questions for the Entrepreneur: 1. What are the challenges that are you facing in the growth stage' 2. What are the next steps or your decisions towards the future of the firm' 3. Would you recognize the USP for your company' 4. How are you delegating your tasks and jobs to your other employees or managerial team' Or you handle all the things by yourself' 5. Time management is crucial for entrepreneur' What is your viewpoint about this' And how would you manage it'