Entrepreneurship in Business: Concepts, Types of Enterprise, and Importance

This report discusses the concepts and theories of entrepreneurship, different types of enterprise, and the importance of entrepreneurship to the individual, organization, and the economy at large. It includes a case study of Steve Jobs as an example. The report highlights the six basic concepts of entrepreneurship, such as change, need, solution, stakeholders, value, and context. It also analyzes different types of enterprise, including sole proprietorship, non-profit organizations, corporations, limited liability companies, and partnerships. Finally, the report identifies and analyzes the importance of entrepreneurship to the individual, organization, and the economy at large.

Entrepreneurship in
Business

Table of Contents

Introduction......................................................................................................................................1
Demonstrate knowledge and understanding about concepts and theories of entrepreneurship.......1
Analyse different types of enterprise...............................................................................................3
Identify and analyse the importance of entrepreneurship to the individual, organisation and the
economy at large..............................................................................................................................5
Conclusion.......................................................................................................................................6
References........................................................................................................................................7

Introduction
Entrepreneurship in Business can be defined as the concept of development and
management of a business venture. This is done to gain the profit by taking risks in a business
world. It is basically the willingness to initiate a new business. In other words, it is a creation or
extraction of the value. It not only benefits the personal individual but the entire economy of the
nation (Tur-Porcar, Roig-Tierno and Llorca Mestre, 2018). Entrepreneur and its case study
chosen for the following report is Steve Jobs. He was the American Business Magnate, investor,
industrial designer and media proprietor. Moreover, he was one of the most successful
entrepreneur and a co-founder of Apple company. Apple is one of the leading international
technology company established in 1976 and headquartered in US. The following discussion is
made on the knowledge and understanding about concepts and theories of entrepreneurship,
different types of enterprise and importance of entrepreneurship to the individual, organisation
and the economy at large with conclusion.
Demonstrate knowledge and understanding about concepts and theories of
entrepreneurship
There are six basic concepts of entrepreneurship such as change, need, solution,
stakeholders, value and context. These are the concepts used by Steve Jobs in management of the
entire organization of Apple.
 Change is one of the concepts of entrepreneurship adopted by Steve Jobs. He has
implemented the change management in the organization many a times with the help
strategic management. It has helped him in a growth of the company. Change
management includes the new product launch within organization and employee
management as well. He has also adopted various tactics for changes which is a sign of
successful entrepreneur (Canestrino, Ćwiklicki, Magliocca and Pawełek, 2020).
 Need is another concepts of entrepreneurship adopted by Steve Jobs. He was having the
ability to create the needs to work among the employees of the organization. This has
resulted in the better accomplishment of the tasks assigned to the staff in an effective and
efficient.
 Solution is also one of the concepts of entrepreneurship adopted by Steve Jobs. He was
having the capabilities of finding out the solutions rather than making any excuses to
1

avoid the problems. This is because he knew that avoiding of the issues cannot help the
company to expand. That is why he always comes up with one or the other solution to ay
difficult situation arises within organization (Piñeiro-Chousa, López-Cabarcos, Romero-
Castro and Pérez-Pico, 2020).
 A stakeholder is also another concept of entrepreneurship adopted by Steve Jobs. It is
important to formulate and maintain the long term and loyal relationship with all the
internal as well as the external stakeholders of the organization. An internal stakeholder
includes the employees, employers, managers, leaders and board of directors. An external
stakeholder includes the suppliers, customers, competitors and many more who are
directly or indirectly linked to the organization. He knew that by maintaining the long
term relationship with the stakeholders, he can get the more innovative and creative ideas
for the organization to implement. Moreover, a stakeholder supports the company in
every difficult situation. Therefore, a good entrepreneur focuses on its stakeholders for
better management of its entrepreneurship.
 Value is also one of the concepts of entrepreneur adopted by Steve Jobs. This is because
until and unless the entrepreneur does not create the value of its resources of the
organization, then it cannot maintain any sustainability which is a very essential point to
understand for every entrepreneur. Therefore, he has created the value of every small
element of the company so that in future it can support the business in a greater way.
 Context is another concept of entrepreneur adopted by Steve Jobs. This is because an
entrepreneur has an ability to always relate its organization into the useful context such as
productivity, profit, customer relationships and many more. Such context helps the
entrepreneur to always remember its goals and objectives of the company in order to
follow them strictly without any distraction. It also includes the optimum utilization of
resources in order to avoid wastage and increases the better functioning of the firm
(Agustina, Budiasih, Ariawan and Gorovoy, 2020).
 Theories of entrepreneurship are used by Steve Jobs in introducing its own organization.
Innovation theory is one of the theories of entrepreneurship where entrepreneur is born
with a desire to establish his own company. Same is with case of Steve Jobs that he
desires to do something innovative and creative. He usually takes pleasure of earning
experiences of skills for doing the multiple tasks.
2

 Entrepreneurial group theory is another theory used by Steve Jobs. It states that the
entrepreneur must have the ability to react on expansion and growth of the organization.
They must react on the group when they feel low, when group is unsuccessful in
accomplishing their tasks and when the group is performing better than others. It includes
both the types of reactions that are positive and negative as well (Sahut, Iandoli and
Teulon, 2021).
 Culture theory is also another theory used by Steve Jobs. It states that the entrepreneur
must manage the diversification of culture and backgrounds of different employees. This
management is known as the special capability of an entrepreneur. This is because
employee management is considered as one of the most difficult task. Therefore,
handling of all such conflict management is essential in the culture theory.
Analyse different types of enterprise
 Sole proprietorship: Sole proprietor is a type of enterprise which is operated by the
individual entrepreneur. It is also known as the sole trader or simply proprietorship. It is
considered as a type of unincorporated entity that is owned by the single person only and
it is a legal form of a business entity. It has several advantages to operate such as it is an
easy and inexpensive process. The establishment of the sole proprietorship is considered
as the cost efficient process. This procedure ranges from country to country which
requires minimum or no fees and every little paperwork. There are a few government
regulations which are imposed on the sole proprietorship. It is not a time and resources
consuming process which is highly required by the government. Unlike corporations,
there is a minimum requirement of reporting financial information to the government.
Sole proprietorship advantages of tax free working of the organization. The owner of this
particular business is only taxed once in a lifetime. He is responsible for only paying the
personal income tax just on the profits earned by the entity. Moreover the entity itself is
not required to pay income tax. There are several demerits of operating the sole
proprietorship such as the individual owner of the sole proprietor faces the unlimited
liability. Sole proprietor does not create any separate legal entity but the business owner
itself faces the unlimited personal liability. The individual owner is only responsible for
all the debts incurred by the entity. If the business does not meet any financial obligations
then the creators can ask for the repayment by selling the assets of the business and even
3

the personal assets in order to clear out debts and other financial obligations. Limitations
on capital raising is another disadvantage which means that the owner only enjoys a few
options to raise capital. For example if the owner wants to take a loan from the bank then
it will not be considered as a separate entity but only the personal credit history of the
owner (Anim-Yeboah, Boateng, Kolog and Bedi, 2020).
 Non-profit organizations: A Non-profit organisation is an entity that has the motive to
serve the people in the form of a social cause. It has an area mainly in terms of science
and research along with the relation and educational settings. All the revenues which are
earned by the non-profit organisations and not distributed among the shareholders or the
employees of the organisation. But it is invested in future projects for the improvement
and serving the people. They are free from paying income tax on the income they receive
due to the tag of non-profit organisation. They earn their revenue from the source of the
donations which are contributed by the individuals or any corporate organisations along
with the fundraising activities. These organisations which are accountable to the founders
and volunteers, donors and community along with the projects which they undertake to
build up the public confidence. Some of the examples of non profit organisations include
the hospitals and foundations, universities and churches along with the mosque and
national charities. There are requirements for the non-profit organisation status such as
they serve the public without any greedy need. They are exempted from tax and are non
political in nature (Ikebuaku and Dinbabo, 2018).
 Corporation: corporations are the legal entities which are formulated and developed by
individuals and shareholders with the motive of operating for profit. These are the entries
which are allowed to enter into their own assets and contracts, also can borrow the money
from financial institutions. It can sue and can be sued by others along with remit Federal
and state taxes. It has several advantages for operations such as it is all a separate legal
entity and unlimited life of the company. Moreover it has a limited liability and easy
transfer of ownership of shares. It has an appropriate and efficient to competent
management along with the sources of capital in a broad variety. It also has several
disadvantages such as it has high incorporation cost and double taxation areas along with
the complicated documentations and formalities (Fairlie and Fossen, 2020).
4

 Limited liability: Limited Liability Company is a combination of the partnerships and
corporations entities. It is considered as a business structure of private companies. It has
the benefit of flexibility and flow through taxation of partnerships and sole
proprietorships. But it has high fees and Taxes along with the strict regulations of
managing and operations of the organisation. If it is compared with the corporation
entity, a limited liability company based on the articles of organisation where the
corporation is based on the articles of incorporation. Limited Liability Company follows
the operating agreement whereas the corporation follows the bylaws. a limited liability
company has the membership interest but the corporation works on the shares. a limited
liability company has the membership certificate where the corporation has the stock
certificate (Belitski, Caiazza and Lehmann, 2021).
 Partnerships: Partnership is a type of business where the former agreement is made
among more than one person in order to agree on the operations of the organisation. The
other co-owners distribute the responsibilities in order to run the organisation. They share
the income and losses according to the initial capital introduced by each of the members.
Some of the features of partnerships are that it is important to have the paper agreement
among the partners in order to fulfil the legal formalities. It is important to involve more
than one person in the partnership business. It is essential to share the profit and have the
mutual motive to operate the business by having the unlimited liability. Its advantages
include that it is easy to form and has large resources. It is flexible in nature and also the
risk sharing among all the partners. Combination of different skills and talents are the
major advantage of the partnership. Talking about disadvantages, partners have unlimited
liability and the risk of disagreement among them. It is unstable in nature (Dalevska,
Kravchenko and Kwilinski, 2019).
Identify and analyse the importance of entrepreneurship to the individual,
organisation and the economy at large
Importance of entrepreneurship to the individual is such that an individual will be its own
boss and can do anything for the organisation as per its needs and requirements. An entrepreneur
is independent in choosing its own team and strategic decision making according to the
organisation. Individual independence creates its own expression by gaining the excellent
learning experience about the corporate world and the practical standard of living. Individual
5

entrepreneur can manage its flexible schedule according to the time by following the vision and
cause of the organisation. An individual entrepreneur is free to set up his own office and have the
greater potential of profit making (Fairlie and Fossen, 2018).
The importance of entrepreneurship to organisation development is such that it groups the
overall strategies and structures along with the processes of the organisation. It enhances the
business environment so that employee management and engagement can be in a better way in
the form of decision making process. It has the ability to improve the standards of living and
create maximum wealth for the employees who are working for the organisation. Innovation is
one of the importances of entrepreneurs who improves the product portfolio and maintain the
stability in the marketplace (Frederick, O'Connor and Kuratko, 2018).
Importance of entrepreneurship to the economy at large is such that it helps in creating
the wealth and sharing in the form of gross domestic product and national income to the nation's
economy. They are responsible for creating the jobs and reducing the unemployment in the
country which increases the employment. Entrepreneurship support in the balancing of regional
development along with national and international development as well. Disposable income is
affected in a positive manner which reduces poverty in the nation and raises the standard of
living of an individual. Development of imports and exports along with community development
is the greatest advantage of entrepreneurship to the economy (Doern, Williams and Vorley,
2019).
Conclusion
It is concluded that entrepreneurship in business is an important concept to learn and
study so that its application can be applied in the real world organizations and introduction of a
new business. This brings a new concept to the market with some innovative and creative ideas.
It directly relates with the customers’ demands and hikes the economy in gross domestic product,
national income and increment of employment as well. Therefore, in order to understand such
conception, this report has covered the knowledge and understanding about concepts and
theories of entrepreneurship. This report has provided the insight on different types of enterprise
and the importance of entrepreneurship to the individual, organisation and the economy at large.
Hence, this report covers all such areas in order to better comprehend the conceptualization on
entrepreneurship in business.
6

References
Books and Journals
Agustina, T., Budiasih, Y., Ariawan, E.K. and Gorovoy, S.A., 2020. Role of social
entrepreneurship in business management. Journal of critical reviews, 7(1), pp.257-262.
Anim-Yeboah, S., Boateng, R., Kolog, E.A. and Bedi, I., 2020. Digital entrepreneurship in
business enterprises: A systematic review. Responsible Design, Implementation and Use of
Information and Communication Technology, 12066, p.192.
Belitski, M., Caiazza, R. and Lehmann, E.E., 2021. Knowledge frontiers and boundaries in
entrepreneurship research. Small Business Economics, 56(2), pp.521-531.
Canestrino, R., Ćwiklicki, M., Magliocca, P. and Pawełek, B., 2020. Understanding social
entrepreneurship: A cultural perspective in business research. Journal of Business
Research, 110, pp.132-143.
Dalevska, N., Kravchenko, S. and Kwilinski, A., 2019. Formation of the entrepreneurship model
of e-business in the context of the introduction of information and communication
technologies.
Doern, R., Williams, N. and Vorley, T., 2019. Special issue on entrepreneurship and crises:
business as usual? An introduction and review of the literature. Entrepreneurship &
Regional Development, 31(5-6), pp.400-412.
Fairlie, R.W. and Fossen, F.M., 2018. Opportunity versus necessity entrepreneurship: Two
components of business creation.
Fairlie, R.W. and Fossen, F.M., 2020. Defining opportunity versus necessity entrepreneurship:
Two components of business creation. Emerald Publishing Limited.
Frederick, H., O'Connor, A. and Kuratko, D.F., 2018. Entrepreneurship. Cengage AU.
Ikebuaku, K. and Dinbabo, M., 2018. Beyond entrepreneurship education: business incubation
and entrepreneurial capabilities. Journal of Entrepreneurship in Emerging Economies.
Piñeiro-Chousa, J., López-Cabarcos, M.Á., Romero-Castro, N.M. and Pérez-Pico, A.M., 2020.
Innovation, entrepreneurship and knowledge in the business scientific field: Mapping the
research front. Journal of Business Research, 115, pp.475-485.
Sahut, J.M., Iandoli, L. and Teulon, F., 2021. The age of digital entrepreneurship. Small Business
Economics, 56(3), pp.1159-1169.
Tur-Porcar, A., Roig-Tierno, N. and Llorca Mestre, A., 2018. Factors affecting entrepreneurship
and business sustainability. Sustainability, 10(2), p.452. Tur-Porcar, A., Roig-Tierno, N.
and Llorca Mestre, A., 2018. Factors affecting entrepreneurship and business
sustainability. Sustainability, 10(2), p.452.
7