Why are some people able to identify and lead the opportunity to consummation while others can't and continue to be part of the ordinary crowd? The entrepreneurship phenomenon incorporates concepts from several disciplines like economics and psychology; and the interpretation of the term so far has been varied according to perceived understanding of different school of thoughts. According to Cunningham and Lischeron (1991), there exist six different schools of thoughts having various interpretations of entrepreneurship. The definition of an entrepreneur has evolved continuously for several decades as the temptation to explore the most competitive economic catalyst has been increasingly realized by governments across the world which led to extensive research into the understanding of the phenomenon of entrepreneurship.
Cole’s experience reflects the varied nature of the phenomenon entrepreneurship as he sated (Cole, cited in Gartner, 1988, p.1),
“...for ten years we tried to define the entrepreneur.
We never succeeded. Each of us had some notion of it—what he thought was, for his purposes, a useful definition...”
In the past, much research done on understanding entrepreneurs focused on the traits or personality characteristics of the entrepreneurs in an attempt to identify them using a common set of traits which proved to be insufficient. After reading different approaches described by Bridge et al (2009), I deduce that with minor exclusions these approaches complement each other for understanding of the phenomenon entrepreneur. Cognitive viewpoint of an entrepreneur is much more rationale as it offers an insight into the decision making process and its dependence on perceived reality.
Cole’s experience reflects the varied nature of the phenomenon entrepreneurship as he sated (Cole, cited in Gartner, 1988, p.1),
“...for ten years we tried to define the entrepreneur.
We never succeeded. Each of us had some notion of it—what he thought was, for his purposes, a useful definition...”
In the past, much research done on understanding entrepreneurs focused on the traits or personality characteristics of the entrepreneurs in an attempt to identify them using a common set of traits which proved to be insufficient. After reading different approaches described by Bridge et al (2009), I deduce that with minor exclusions these approaches complement each other for understanding of the phenomenon entrepreneur. Cognitive viewpoint of an entrepreneur is much more rationale as it offers an insight into the decision making process and its dependence on perceived reality.
Recent work by Delmar on the cognitive models of entrepreneurship is substantial (Delmar, cited in Bridge et al, 2009). It all starts with believe in oneself (perceived self efficacy) which leads to positive attitude which is a key element for the intentions to be converted to entrepreneurial behavior. Krueger called these intentions the entrepreneurial 'potential' (Krueger, cited in Bridge et al, 2009). McGee (2009) found the entrepreneurial intentions to be the precursors of entrepreneurial activity. Both personal factors such as personal traits, experience, perceived self efficacy and the contextual factors such as social and economic structures are the key influential parameters for intentions. The integrated approach as adopted by Krueger introduced personal desirability as a crucial factor for long term sustained and prevalent entrepreneurial behavior. Bridge et al. considered perception to be the most important element of the Krueger's model.
It is implied that every potential entrepreneur have a clear vision. The seemingly strongest primary variables or the skills and attributes of an entrepreneur are high perceived self-efficacy, opportunity obsession and high perseverance.
Self-efficacy
Boyd and Vozikis defined self-efficacy as 'a person's belief in his or her capability to perform a given task' (Boyd and Vozikis, cited in Bridge et al, 2009, p.79). Intrinsic motivation and self-efficacy augment each other. Bridge concluded as does Krueger that perceived self-efficacy leads to intentions which ultimately lead to behavior. Self-efficacy relates to thinking process, perception, the cognitive side and so it is more amenable to change through intervention than personal traits as Bridge et al. expressed self-efficacy as 'proximal' and personal traits as 'distal'.
A good example of self-efficacy is the prolonged endeavor undertaken by Earl Nightingale to find the answer for the question that why some people are successful and others not. The importance of perceived self-efficacy was realized by Earl Nightingale as 'We become what we think about' originally presented by Napoleon Hill in his book 'Think and Grow Rich'. The findings were the result of interviews of 500 highly successful and influential people like Thomas Edison, Henry Ford, Theodore Roosevelt and Woodrow Wilson.
Entrepreneurial self-efficacy (ESE) is the self-confidence that one has the necessary competence to succeed in realizing the discovered economic opportunity. McGee et al. (2009) believed that ESE can be raised by intervention through training and education. He stressed the need for further research and refinement of the ESE construct because he found it to be a promising element in the understanding and the improvement of the entrepreneurial activity. I consider it to be the intrinsic and primal foundation of an entrepreneurial act.
Opportunity Obsession
Timmons & Spinelli (2009) suggested that successful entrepreneurs are obsessed with the opportunity they recognize to be of high potential than with the other issues such as money or resources. Entrepreneurs are always on the look for new ideas by observing market trends and identifying patterns to exploit the opportunity with the highest potential. Kirzner described the notion of opportunity recognition as ‘lookout for hitherto unnoticed features of the environment’ (Kirzner, cited in Markman & Baron, 2003).
A good example of the ability to recognize and exploit an opportunity of high potential is that of Tom Stemberg. After business school and 15 years into the supermarket business, he started to look for a high potential opportunity and after considering several he found a substantial economic opportunity. Main Street shops in America were selling ballpoint pens for $2 (wholesale price about 30 cents) and more, Stemberg soon recognized the same pattern for several other office supplies used by small businesses; he believed that the whole office supply business could be revolutionized by exploiting this opportunity pattern. He and Leo Kahn founded Staples and he succeeded in what he believed. He went onto develop several other successful new ventures.
Essentially a successful entrepreneur learns from experience what it takes to be successful and after that success comes often. Same is the reason why Timmons & Spinelli (2009:51) expressed 'Entrepreneurs rely heavily on their own previous experiences … to come up with their breakthrough opportunities'. Opportunities of high potential exist even in tough economic climates and an entrepreneur can identify them. Warren Buffett justly reflects his investment intellect as 'We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful'; I believe an entrepreneur adept at interpreting human psychology is more likely to succeed in identifying and exploiting high potential economic opportunities.
High Perseverance
All successful entrepreneurs show a very high degree of diligence towards their vision. Bandura (Bandura, cited in Markman & Baron, 2003) finds that under challenging conditions such as financial and social adversity, individuals with high perseverance are more likely to succeed than the individuals who fail to persevere. Markman & Baron (2003) argues that entrepreneurs usually embark upon innovation to provide 'new combinations' and they often face substantial uncertainty regarding market acceptability; high perseverance is the principal and decisive element of success in such a case.
A good example of high perseverance is that of Steve Jobs. The biography of Steve Jobs (Mullins, 2009) the founder and the CEO of Apple highlights his spirit for high perseverance throughout his career. Jobs intrinsic motivation seems not to radiate from the desire for wealth but from innovation, his annual salary as Apple's CEO is famously set at $1. It seems like innovation is much more important to Jobs than affluent wealth. After the inception of the company in 1976, several successful innovative personal computer designs were introduced including the remarkable Macintosh under Jobs leadership. In 1985, Jobs fell out with the Apple board and resigned from the company; he didn't stop but continued to pursue his vision as an innovative leader by taking new initiatives. His desire for innovation compelled him to found the computer software company NeXT and than later on another highly successful company Pixar, a computer animation company. Later NeXT was bought by Apple and Jobs was again installed as the CEO of Apple. The renaissance of Apple under Jobs included the launch of the spectacularly successful iPod music player and more recently the iPhone, a Smartphone with a huge success.
Another example of high perseverance is that of Thomas Edison. He tried approximately 10,000 times before he succeeded in inventing a working light bulb. He commented on his 9,999 failures as learning 9,999 different ways of not making a light bulb light. The only time successful people fail is when they give up. To conclude perseverant entrepreneurs are more likely to be successful than those who are less persistent.
I conclude that the cognitive approach described by Bridge et al. (pp.64-85) is more appropriate for the understanding of the phenomenon entrepreneur as it gives an insight into the decision making process of an entrepreneur and describes about the significance of perception. It gives an understanding of the transition between intentions and behavior and helps to understand how positive attitude influence intentions. It values personal traits and attributes as one of the key influential factors towards the entrepreneurial intentions. Mitchell et al. (2002) believes that the cognitive approach provides the researchers a tool to better define and measure the entrepreneurial activity. Successful entrepreneurs may not have a common set of traits and attributes but they will have the ESE, ability to spot and recognize opportunities and high perseverance common among them. I conclude that self-efficacy as exemplified by Steve Jobs and Thomas Edison is the cardinal decisive factor for entrepreneurial success.
References
Bridge, S., O'Neill, K. and Martin, F. (2009) Understanding Enterprise: Entrepreneurship and Small Business. 3rded. Basingstoke: Palgrave Macmillan.
Cunningham, J.B. and Lischeron, J. (1991), 'DEFINING ENTREPRENEURSHIP', Journal of Small Business Management, 29(1), Business Source Complete [ONLINE] Available at: http://search.ebscohost.com/login.aspx?direct=true&AuthType=athens,ip,cookie,url,uid&db=bth&AN=9609040966&site=ehost-live
(Accessed: 5 November 2009)
Gartner, W.B. (1988), ' "Who is an Entrepreneur?" Is the Wrong Question.', American Journal of Small Business, 12(4), p.1, Business Source Complete [ONLINE] Available at: http://search.ebscohost.com/login.aspx?direct=true&AuthType=athens,ip,cookie,url,uid&db=bth&AN=5748404&site=ehost-live
(Accessed: 5 November 2009)
Markman, G.D and Baron, R.A. (2003), 'Person-entrepreneurship fit: why some people are more successful as entrepreneurs than others', Human Resource Management Review, 13(2), EBSCO Electronic Journals Service [ONLINE] Available at:
http://ejournals.ebsco.com/direct.asp?ArticleID=TU1KC5D54AE1HTLT8CTD
(Accessed: 8 November 2009)
McGee, J.E., Peterson, M., Mueller, S.L. and Sequeira, J.M. (2009), 'Entrepreneurial Self-Efficacy: Refining the Measure', Entrepreneurship Theory and Practice, 33(4), EBSCO Electronic Journals Service [ONLINE] Available at: http://ejournals.ebsco.com/direct.asp?ArticleID=4FB4BB9BE73D06F4B418 (Accessed: 8 November 2009)
Mitchell, R.K., Busenitz, L., Lant, T., McDougall, P.P., Morse, E.A., Smith, J.B. (2002), ‘Toward a Theory of Entrepreneurial Cognition: Rethinking the People Side of Entrepreneurship Research’, Entrepreneurship Theory and Practice, 27(2), EBSCO Electronic Journals Service [ONLINE] Available at: http://ejournals.ebsco.com/direct.asp?ArticleID=4FB4BB9BE73D06F4B418 (Accessed: 8 November 2009)
Mullins, L.J. (2009) Management and Organisational Behaviour, 8th ed. Harlow: Financial Times Prentice Hall
Timmons, J.A. & Spinelli, S., Jr. (2009) New venture creation : entrepreneurship for the 21st century. 8th ed. Boston: McGraw-Hill.
Bridge, S., O'Neill, K. and Martin, F. (2009) Understanding Enterprise: Entrepreneurship and Small Business. 3rded. Basingstoke: Palgrave Macmillan.
Cunningham, J.B. and Lischeron, J. (1991), 'DEFINING ENTREPRENEURSHIP', Journal of Small Business Management, 29(1), Business Source Complete [ONLINE] Available at: http://search.ebscohost.com/login.aspx?direct=true&AuthType=athens,ip,cookie,url,uid&db=bth&AN=9609040966&site=ehost-live
(Accessed: 5 November 2009)
Gartner, W.B. (1988), ' "Who is an Entrepreneur?" Is the Wrong Question.', American Journal of Small Business, 12(4), p.1, Business Source Complete [ONLINE] Available at: http://search.ebscohost.com/login.aspx?direct=true&AuthType=athens,ip,cookie,url,uid&db=bth&AN=5748404&site=ehost-live
(Accessed: 5 November 2009)
Markman, G.D and Baron, R.A. (2003), 'Person-entrepreneurship fit: why some people are more successful as entrepreneurs than others', Human Resource Management Review, 13(2), EBSCO Electronic Journals Service [ONLINE] Available at:
http://ejournals.ebsco.com/direct.asp?ArticleID=TU1KC5D54AE1HTLT8CTD
(Accessed: 8 November 2009)
McGee, J.E., Peterson, M., Mueller, S.L. and Sequeira, J.M. (2009), 'Entrepreneurial Self-Efficacy: Refining the Measure', Entrepreneurship Theory and Practice, 33(4), EBSCO Electronic Journals Service [ONLINE] Available at: http://ejournals.ebsco.com/direct.asp?ArticleID=4FB4BB9BE73D06F4B418 (Accessed: 8 November 2009)
Mitchell, R.K., Busenitz, L., Lant, T., McDougall, P.P., Morse, E.A., Smith, J.B. (2002), ‘Toward a Theory of Entrepreneurial Cognition: Rethinking the People Side of Entrepreneurship Research’, Entrepreneurship Theory and Practice, 27(2), EBSCO Electronic Journals Service [ONLINE] Available at: http://ejournals.ebsco.com/direct.asp?ArticleID=4FB4BB9BE73D06F4B418 (Accessed: 8 November 2009)
Mullins, L.J. (2009) Management and Organisational Behaviour, 8th ed. Harlow: Financial Times Prentice Hall
Timmons, J.A. & Spinelli, S., Jr. (2009) New venture creation : entrepreneurship for the 21st century. 8th ed. Boston: McGraw-Hill.
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