A Study on the Contemporary Issues of Entrepreneurship and Innovation

This report examines contemporary issues in entrepreneurship and innovation, focusing on why entrepreneurs, particularly startups and established businesses, often struggle with innovation. It identifies risk aversion, pressure from investors, and misconceptions about leadership as key challenges. The report analyzes these issues through literature review, exploring arguments from various sources and applying theoretical entrepreneurship frameworks. It highlights the importance of judgment in decision-making and organizational processes, including the need for skilled professionals and the courage to seek external resources. The study concludes by emphasizing the significance of innovation for entrepreneurial success and the need for leaders to foster a culture that embraces risk and change. The report also references examples of companies that have successfully maintained a culture of innovation. Overall, the report provides a comprehensive overview of the challenges and opportunities in the field of entrepreneurship and innovation.

Running head: ENTREPRENEURSHIP AND INNOVATION
The Nexus between Entrepreneurship and Innovation
Name of the student:
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1ENTREPRENEURSHIP AND INNOVATION
Executive summary
This study is aimed at understanding or identifying one of the contemporary issues of
entrepreneurship. The study identifies the issue which is a matter of strange as well. The study
finds that starter or many established entrepreneurs are afraid of taking innovative decisions.
This is for several reasons such as they do not want to take the risks. However, in doing so they
even cause harms to the businesses which eventually throw them out of the list of top companies
of which those were the part of. Judgment is also identified in this study as an essential element
of entrepreneurs which affect their decision-making skills and also the organizing process that
also includes encouraging the commitment from senior managers.

2ENTREPRENEURSHIP AND INNOVATION
Table of Contents
Describing the contemporary issue:.................................................................................................3
Arguments of the contemporary issue from literature:....................................................................3
Applying theoretical entrepreneurship frameworks to understand the contemporary issue:..........6
Applying and interpreting judgments to develop advanced knowledge of the contemporary issue:
.........................................................................................................................................................7
Conclusion:......................................................................................................................................8
References........................................................................................................................................9

3ENTREPRENEURSHIP AND INNOVATION
Describing the contemporary issue:
Entrepreneurs are known for taking risks and using technological innovations. This is
also why they are called with that specific name. However, this is not entirely true as
entrepreneurs tend to lose the recognized guts at the later stage of their ventures. This also
happens with the startup entrepreneurs as due to no experience of whatever they do, they tend to
struggle to keep it up with innovation. This is an interesting discussion as such facts are rarely
known to a mass people (Decker et al. 2014).
According to an article posted in Forbes, companies become lesser fascinating for risks
the bigger it gets. They might be recognized as to have innovation wired into its DNA. However,
they tend to become weaker in this regard with the ventures get older. There can be ample of
reasons for it; however, it can also be due to the over-confidence. An overly confident startup
thinks as if it has read the market appropriately and also that they can never fail because they
have already proved their credentials and have become successful (Forbes.com 2018). The
executive team feels like being under pressure to maintain a progressive trend for annual
revenue. The fear does not let them be motivated for taking up risks by using the technological
innovation. Startup entrepreneurs also struggle to avoid the pressure from investors. They are
under continued pressure for a progressive revenue growth (Forbes.com 2018).
Therefore, the study is aimed at understanding why innovation is a challenge to
entrepreneurs especially to startups and the bigger entrepreneurs.
Arguments of the contemporary issue from literature:
According to Terjesen, Hessels and Li (2016), companies that get bigger in business it,
on the other side, becomes less fascinating for taking risks as well. There could be many risks for
such behavior. Interestingly, the market behavior such as the stock market performance has now
become a key factor for the board of members and for shareholders also. Business has to live up
to the expectation in every quarter of a fiscal year. A slight deficit in the figure as stated in the
forecast for the very next quarter will certainly trigger lawsuits of shareholders. It means
businesses are surrounded by a list of pressures with its reputation being mounted up. This is one
of the reasons which the article has identified for entrepreneurs as struggling to innovation in a
long time.

4ENTREPRENEURSHIP AND INNOVATION
As opined by Suddaby, Bruton and Si (2015), there are misconceptions about the
leadership sustenance which means that certain leaders are good for only a certain range of
revenues attaining which they must be replaced with better leaders. This must be done to attain
the next slab of target revenues and the concept of replacing the existing leaders with a better one
will keep on going with the attainment of every target slab for revenues. Most companies do
follow the very same rule. The process is true to some extent that attaining a different set of
revenue requires a more skilled and experienced personnel. The existing leaders may struggle to
take it to a new height. However, this is not at all true. For example, Apple had followed the very
same path by replacing its founder Steve Jobs with John Sculley who himself belonged to a very
reputed company. However, the idea did not work and Apple had to recall Steve Jobs back again
years after he was being replaced. Since that recall, Apple was able to innovate again the way it
used to do (Khan, Alam and Alam 2015). The idea of change in leadership is rarely successful
with just a very few examples of successful companies. Google is one of them which instead of
replacing its founders Larry Page and Sergey Brin, they were being retained and asked to work
under a reputed company guy, Eric Schmidt. They were retained until the new guy was trained
enough to take up the leadership position and innovate the way Google is known for (Forbes.com
2018).
As viewed by Terjesen, Hessels and Li (2016), a shift normally happens to the human
resource department, the more it gets bigger. It means that A-type personalities do exist in
startups. Such professionals used to have courage in them for innovative approaches. The
moment it gets bigger, the whole structure of the human resource department gets changed. A-
type professional is replaced by a more professional group of HR executives who are very
resistive to innovation. They are not encouraged by incentives for thinking out of the box. They
rather tend to be in a similar state during their course of participation and maintain a very high
standard of professionalism. This may not be true in every single entrepreneurial business.
However, the chosen article has found exactly the very similar kind of findings.
As according to Rauch and Hulsink (2015), managing to a middle path is another issue
which prevents entrepreneurs from reaching to innovative ideas and extreme thinking. As the
business gets bigger, it gets more of such managers who are not the extreme thinker. Hence, the
innovative ideas that float across the organization get the mixed responses. Some managers being

5ENTREPRENEURSHIP AND INNOVATION
the extreme thinker and have the appetite in them for going outside of the box, struggle to find
the extreme support that had once helped the ventures to stand. As a result, such businesses end
up as settling towards the middle way. However, such claims are not always true as few bigger
companies have proved that innovation is possible even when one has become a bigger
company. One of such examples is of GE which has successfully maintained the culture for
innovation. In a span of 136 years, the company had moved in an unorthodox way to prove them
as an innovative business. The company uses computers and equipment to establish the
communication in real time over the internet, exchange information, prevent plant shutdowns
and ensure a top-rated product quality (Home.sandvik 2018).
As opined by Zahra, Wright and Abdelgawad (2014), companies on most occasions
prefer to promote professionals from within the company’s bench strength, they have rare
courage to look for external resources. This is good from a perspective that employee’s loyalty
level will increase. They will feel valued and will consequently have an enlarged interest for
commitment. However, internal promotion in most times is not a healthy strategy as well
because it does not allow employers getting fresh and skilled talents who could have
comparatively more desires for innovation. In fact, one should look to get the best-skilled
professionals who all can add values to the innovation in organizations. It means different
options must be tried while ignoring to rely on a single most strategy. In particular, those who
are experienced and have worked before with reputed companies, such employees may certainly
be a good boost to the organizational productivity. Therefore, the fear for not to go outside for
skilled professionals is an issue from a point that it closes the doors which were the virtual paths
to opportunities and were attainable also with skilled and experienced external resources.
The literature review section has provided a few issues that potentially prevents the
organization from being innovative. Those few issues are quite common with most established
and starter entrepreneurs. However, there are a few entrepreneurs that have never threatened of
taking risks and have always been innovative throughout their ventures. Few of such
entrepreneurs are Apple, Google and Amazon (Forbes.com 2018). These companies are never
satisfied with their success and had continued to experiment from day one to become the multi-
billion dollar companies. They are clear exceptions to a rule which suggest that entrepreneurs
become restrictive in nature once they are the established entrepreneurs. Those most

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organizations tend to play safely while also ignoring their risk-taking capabilities which had once
benefitted them in becoming the entrepreneurs. Apple, Amazon and Google have been the
exceptions and that to an extent that they have made long-term commitments to innovation.
Innovation has actually remained as a driving force for such firms in their decision-making
processes. Those rare companies have another thing common in them which is that the CEOs of
each of the company founded the respective businesses and they all remained together and
worked with the senior management while during the company’s growth. Steve Jobs, Larry Page
and Jeff Bezos, they all have entrepreneurship wired into their DNA. Such entrepreneurs would
never bring worries to their investors as they know how to attain the success. They would also
not allow the company’s culture becoming too comfortable to employees that they start taking
things for guaranteed. They would not also be conservative in their thought-process, so that,
innovation is resisted or hampered (Forbes.com 2018).
Applying theoretical entrepreneurship frameworks to understand the contemporary issue:
According to Autio and Fu (2015), a general theoretical framework of entrepreneurship
suggests that there are two approaches involved in every entrepreneurial action. The one is the
minimum approach while other being the maximum approach. A minimum approach has its
orientation in the entrepreneurs themselves who constructs the entrepreneurial process or plans
the project. A maximum approach is constituted of elements such as the organization that
includes creating the process by encouraging or motivating the individuals (Siegel and Wright
2015). It is the implementation of the execution process which requires a collective effort from
every member of organizations. Unless and until the members are not convinced of the concept
or are unsure of the process, they will fall short and will not be able to contribute to the process.
Hence, in accordance with the theoretical framework of entrepreneurship, it is necessary that
entrepreneurs are able to work with their senior managers and also their employees. An
integrated approach is mostly required to implement the innovative decisions or processes at the
organizational level.
In the light of the chosen entrepreneurship framework, it is evident that the contribution
from individuals is of utter importance for taking or implementing the innovative processes.
Hence, individuals must necessarily have capabilities in them to contribute to the innovation
process. The existing employees may or may not necessarily possess the required skills. This is

7ENTREPRENEURSHIP AND INNOVATION
then important to realize the importance to look for external resources and also the actual time
for it. Hence, it is a clear indication that innovation skills are utterly required for the
entrepreneurial companies to sustain its reputation as the innovating firms. It is the responsibility
of entrepreneurs to identify whether they have the required skilled professionals. They need to
focus on one thing which is to have the skilled professionals. The need must be fulfilled at any
cost. If it asks for going outside to get the required talents, it must be accomplished and this is
what makes the difference between entrepreneurs. There are a very few entrepreneurs as stated
earlier in this study who have the courage in them to look beyond the limit and go to any extent
to get the required talents (Kerr, Nanda and Rhodes-Kropf 2014).
The chosen theoretical framework for entrepreneurship has actually helped to get two
variables such as the courage in entrepreneurs for innovation and their ability to accumulate the
required resources. Most entrepreneurs have struggled to attain or fulfill the identified variables.
Entrepreneurs at their startup and also when they are established have fears for innovative
decisions. They become quite restive in nature and also tend to play safe. As opined by Estrin,
Mickiewicz and Stephan (2016), the framework, on the other hand, demands a much different
approach that includes innovative entrepreneurs and their capabilities to identify the required
resources. They must be able to work with their senior managers and identify the area of
improvement. They also have the capability to identify whether there is a need for additional
recruitment of fresh professionals from external resources. This may be the case as sometimes
the available workforce may not have the extra quality which is required to flourish the
innovative venture. Hence, entrepreneurs must have the never-ending desires for innovation and
also that entrepreneurs are capable of accumulating the best workforce which they can get.
Applying and interpreting judgments to develop advanced knowledge of the contemporary
issue:
Judgments can be suspended; however, it should not be for an indefinite course of time
(Castaño, Méndez and Galindo 2015). Judgment can be understood as to have its link with the
contemporary issue highlighted in this study. The contemporary issue highlighted in this study is
the fear of entrepreneurs for taking the innovative ideas. Such fears can end up throwing
entrepreneurs out of the existing list of top companies in the world. Judgment is related to fear to
experiment with entrepreneurs as they tend to resist their inherited judgment making capabilities.

8ENTREPRENEURSHIP AND INNOVATION
According to the stated facts in the first line of this section, judgments can take little time to
happen; however, it should never be stretched to an indefinite span of time. The judgment can be
delayed because it takes time to process the innovative strategies. The process is delayed because
strategies are developed with the help of trial and error process. This also means that the process
will continue for a long duration of time. There are many other factors which actually affect a
venture, among which are nature of technological progress, confirmed orders, customer
eagerness, financial performance, competitor’s success and so on. However, the most critical of
all is the senior manager’s willingness to move or not-move decisions. Unless and until the
senior managers are unwilling to think out of the box, innovation cannot happen (Galindo and
Méndez 2014).
Entrepreneurs must have capabilities in them to make appropriate judgments. It is not
advisable that they remain silent or unmoved on innovative ideas. It is rather suggested that they
must have a never dying desire for innovative ideas. Additionally, they must also be able to
figure out the role of every individual who is associated with the company serving the different
purposes. Entrepreneurs must be able to influence its senior managers regarding a change or an
implementation of a new strategy. This is necessary for a fact that senior managers will help to
figure out whether there is a need for fresh recruitments or else (Block et al. 2015).
Conclusion:
Therefore, it was found in this study that entrepreneurs struggle to make innovative
decisions in long-term. There are actually a very few entrepreneurs who have courage in them to
look for the never-dying desires for innovation. Only very few entrepreneurs which also include
Apple, Google and Amazon have been able to remain innovative in long-term. The theoretical
approach or framework which was chosen in this study has helped to identify the two important
elements such as minimum approach and maximum approach. A minimum approach is related to
the entrepreneurs themselves while the maximum is related to how entrepreneurs implement
their plans. It means organizing the organizational resource in a way that it contributes to the
entrepreneurial process. As identified in this study, entrepreneurs must also have capabilities to
make the justified judgments. It means the entrepreneurial process can be delayed but should not
be stretched too long that it becomes out of reach.

9ENTREPRENEURSHIP AND INNOVATION
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informal entrepreneurship. Asia Pacific Journal of Management, 32(1), pp.67-94.
Block, J.H., Kohn, K., Miller, D. and Ullrich, K., 2015. Necessity entrepreneurship and
competitive strategy. Small Business Economics, 44(1), pp.37-54.
Castaño, M.S., Méndez, M.T. and Galindo, M.Á., 2015. The effect of social, cultural, and
economic factors on entrepreneurship. Journal of Business Research, 68(7), pp.1496-1500.
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entrepreneurship/
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experimentation. Journal of Economic Perspectives, 28(3), pp.25-48.

10ENTREPRENEURSHIP AND INNOVATION
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