Entrepreneurship in Business: Theories, Types, and Importance

This report provides a comprehensive overview of entrepreneurship, exploring key theories such as the need for achievement, innovation, and behavior theories, and their application in business. It discusses different types of enterprises, including sole proprietorships, partnerships, and public limited companies, highlighting their characteristics, advantages, and disadvantages. Furthermore, the report examines the importance of entrepreneurship to individuals, organizations, and the economy at large, emphasizing its role in providing products and services, creating job opportunities, fostering innovation, and driving economic growth. Examples like ASOS and Next plc are used to illustrate the practical implications of entrepreneurial concepts and strategies. Desklib is a platform where students can find solved assignments and resources.

Entrepreneurship in
Business

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Understanding about theories and concepts of entrepreneurship................................................3
Different types of enterprise........................................................................................................3
Importance of entrepreneurship to the individual, organisation and economy at large..............3
CONCLUSION................................................................................................................................3
REFERENCES................................................................................................................................4
Books and Journals.....................................................................................................................4
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INTRODUCTION
Entrepreneurs are the ones who finds out the opportunity which prevails in the market
and on that basis they develops their new business idea which is new and unique. It is the act of
forming and establishing a business which has the capacity to make a good growth in the
economy(Badri, and Hachicha, 2019). The entrepreneurs most obvious thing is to establish and
start a business but considering this fact in the present time, the meaning of entrepreneurship has
been extended which considers the social and political form of the activities of enterprise. They
are linked with developing a new business in that tries to make the innovation which can be in
the form of making new products or providing unique services to people. This report will cover
knowledge and understanding of concepts and theories of entrepreneurship, different types of
enterprise and importance of entrepreneurship to individual, organisation and economy at large.
MAIN BODY
Understanding about theories and concepts of entrepreneurship
Entrepreneurship is the method in which an individual starts and runs their business. There
tendency is to become the most creative one so that their business can be identified as unique
one. As all the decisions are taken by an entrepreneur including the objectives of a company and
the investment so for, achieving these things, entrepreneurs have to face a lot of risk but it can
said that at certain times it can be highly rewarding to the owners of a business also. There are
different theories which are important and useful for understanding the concept of
entrepreneurship and those are discussed below-
 Theory of need of achievement- The theory was developed by McClelland and
according to him it is very important that the entrepreneurs have the desire of developing
high achievements because with this only they would be able to develop their best
performance. It is very important that the entrepreneur is having good skills where they
are good in making higher imaginations, and have great thinking with the development of
new combinations (Bates, Bradford and Seamans, 2021). Every entrepreneur who
develops the business have some or the other targets and with that they have a sense of
achieving those things with great determination. With the development of objectives it is
very essential that they work with the attitude of achieving the things at right time and
with great efforts. If this attitude will be developed by an entrepreneur that the chances of
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making success also gets developed. For example- Asos Plc founder as they have always
tried to work hard for achieving the objectives and this is the reason why he have
achieved success in their life. The founders of a business has done a lot to work for the
success of a business because in the initial time they have to suffer with the problem of
closure of business. All the directors of a company have the attitude of getting the thing
as they have the feeling of achieving and this helped them to make the expansion in the
market.
 Innovation theory- Innovation theory was developed by J.A. Schumpeter in which
according to him entrepreneurs are developed because they have some kind of innovation
in them. According to him, as the entrepreneur is developed to begin their own business
then in this case they have some desire to establish things(Bellamy, 2021). But with this,
they also tries to develop new things with new combinations so that their business can be
differentiated from the others in the market. It is expected from the entrepreneurs only
that they will be making some type of innovation and will provide unique products to the
society which will be beneficial for them. For example- Next plc have always provided
those type of products which are in trend because this company cannot work efficiently if
they are not working on this concept. If the products such as clothing or the home
products are not according to what has been demanded in the market then it will be
difficult for them to achieve the success and market share. They have already made the
identification of this thing where they know that without innovation consumers can be
attracted with those brands who are providing them the differentiated products.
 Behaviour theory- This theory was developed by John H. Kunkal in which he said that
the development of entrepreneur is dependent upon the sociological and psychological
variables. According to Kunkal, entrepreneurs can be developed in any society which can
be a minority, religious, or a migrated one and according to Kunkal these minorities have
helped and provided a lot to the society (What Is Kunkal’s Theory of Entrepreneurship
Supply?, 2021). Entrepreneurs are dependent upon the different structure of the economy
which covers demand structure where the demand which is required in the economy and
they will like to have rewards for the contribution which they wants to make. The other is
opportunity structure which covers technological, information about production of
techniques or the market structure which is considered to be the most important one. For
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example- The founder of Next plc have started this business from a very small and in the
initial time of starting the business they were not earning good profits because of the high
level of competition in the market and because of the dissolved partnership. They have
also provided lot of things to the society which covers achieving the demands of
consumers(Carbonara, Tran and Santarelli, 2020).
Different types of enterprise
An enterprise can be defined as a legal entity which is having all the rights to conduct and
establish their business. By the term enterprise it means the ways, to start a new business or a
start-up with some different goals and are different out of others in the market. It is very
important that the owner of an enterprise is considering the type of business that they aim
because every type of business have different scales of operations because of which they work
further. Also, the requirements of capital is also different which is why what the selection of a
type of enterprise becomes very important and essential factor to achieve the objectives. There
are different types of enterprise which has to be considered by an entrepreneur and those are
discussed below-
 Sole proprietorship- This is considered to be the smallest out of other existing business
but on the same side is the most important one. The reason for this is that in the sole
proprietorship retailing and local services are covered(Bellamy, 2021). Sole proprietor is
considered to be an individual person who starts the business on there own and does not
have any other person who have the rights to make decision for the business. If the
business objectives are developed at a very small level then this type of enterprise is the
best. The main benefit of work as a sole trader is that it can be established very easily as
it requires less paperwork. The owner of a business have the freedom and also the
flexibility to make a decision because there is no other person who will force there
decisions to be made by them. But with this, there are certain disadvantages and that
covers that the owner have to face the losses on there own and financing at time becomes
very difficult.
 Partnerships- A partnership can be defined as as a mutual agreement between different
parties where they agrees to build a cooperation with all the activities that will be
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undertaken by the organisation. Partnership can be considered as that one where two or
more people are involved and will be sharing all the losses and profits of a business
together. The main benefit for which the partnership can be formed is that it is simple and
easy to start a business in partnership and the burden is also gets easily shared. As the
business has lot of activities which needs to be conducted to achieve the objectives and
sometimes they have to take difficult decisions so in this term it the people who works
together are considered to be the most helpful one(Farooq and et. al., 2020). But the
main disadvantage which they have to face is that the partnership agreement has to tackle
the difficulty of unlimited liability and the chances of facing the conflicts in partnership
agreement is also high.
 Public limited company- It is that type of company in which it has limited liability and
also provides and offers shares to the general public. It is usually operated as a separate
legal entity and also is formed and owned by the shareholders. The first is that they can
raise the capital by issuing the shares to public and which is done most of the companies
to take the finances. Also they help in spreading the base of shareholders at larger scale in
which it means that as the company issues the shares to larger number of people then the
ownership gets divided into numerous people (Crecente-Romero, Giménez-Baldazo and
del Val-Núñez, 2019). Asos by choosing this type of enterprise has the higher growth and
expansion opportunities and with that they can pursue new projects, they can make the
acquisitions. But Asos plc has to face the issue of working with different regulatory
frameworks formed by the government of different countries.
Importance of entrepreneurship to the individual, organisation and economy at large Importance of entrepreneurship to individual- The development of entrepreneurship is
very important and specially to the general public. The first by which the development of
enterprise is important for the people is that they help them in providing different type of
products and services which are required by the people. For example- Asos plc has
always helped the general public in providing different types of clothes which they want
including the beauty products, accessories and many more(San-Martín and et. al., 2019).
There main target is the young adults to whom they try to provide the different
fashionable things required by them. They also helps the people in providing different
types of job opportunities to the unemployed people who are searching for jobs. This is
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the most important framework which is provided by the enterprises. They help in creating
a large share of jobs and also provides the people with necessary training which will be
useful for them for their upliftment. For the employees also, the entrepreneurship is
considered to be the most important thing because as every enterprise tries to become as
much innovative as they can so in this case they also provides the opportunities to the
employees in developing new ideas and to create new products which will be beneficial
for them. This not only enables the person to grow from their mind but in the end will
also help them in providing different opportunities to them. Importance of entrepreneurship to organisation- In the present time, the competitive
environment for the start-ups have been increasing and because of it it is creating a risk to
the companies for their achievement of objectives. The entrepreneurship is all about
making innovation and creating uniqueness in the products and services which will be
provided to people(Bates, Bradford and Seamans, 2018). So in this case, it helps the
company in establishing and developing their innovative ideas in order to attain
competitive advantage in the market. People who have the instinct of having an
entrepreneurial thoughts are the one who can make the advancements in their products
and services which is done by For example- Next plc. It is the company which has always
tried to establish there objectives by creating new innovation and launching different
range of products attracting many new adults in it. Intrapreneurship has also been
developed in the recent years where it helps in enabling the collaborators to develop the
projects which does not makes the consideration of the job role they are playing or if they
are having any independent business model (Xabibullayevich, Nabijanovich and
Ibragimovna, 2020). This is also helping the company to make new and sustainable type
of innovation which is the key role of it. The corporations are the one who always have
the existing type of infrastructure in which they make the allowance of developing the
new solutions. Asos plc is also a very big name which has developed its name because of
the kind of uniqueness they have created.
 Importance of entrepreneurship to the economy- For the economy as whole enterprises
plays an important role in it where they make those type of products which are required
the most in society. In this thing, they provide the range of products where the company
in the initial time conducts a deep research to identify the needs of consumers. For
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making the development of an economy it is very important that they are providing and
making the improvement in providing the jobs. They are the one who provides several
job opportunities which will be beneficial for the people and at the same time they also
helps in increasing the GDP of an economy(Landström and Harirchi, 2018).
Entrepreneurs usually checks the issue which is prevailing in the market and for that they
produce those products which are required by the consumers. This helps in making the
improvement in the standard of living of people. They are responsible for making
changes in the community and for that they produce those products and services which
will be required by the consumers. Enterprises always tries to make positive changes to
the economy which covers providing more products and services and also they helps in
creating different type of programmes and workshops which are provided to the general
public and with this they help in providing the skill training to the people. The most
effective one which is created by the enterprises is that they work in the scale of
increasing the scale of production which create higher percentage of GDP(Neumeyer and
et. al., 2019).
CONCLUSION
From the above report it can be concluded that entrepreneurship is the important factor
which helps in the economic growth of a country. But for setting the enterprise the owners of
business used and choose different styles of enterprise which will be beneficial for them and will
help them in increasing their productivity. Selecting a right and better enterprise is the most
important one which will help the company in achieving its targets. When there will be
development of entrepreneurship in the market then it will mostly be helpful to the individual,
organisation and economy.
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REFERENCES
Books and Journals
Badri, R. and Hachicha, N., 2019. Entrepreneurship education and its impact on students’
intention to start up: A sample case study of students from two Tunisian
universities. The International Journal of Management Education. 17(2). pp.182-190.
Bates, T., Bradford, W.D. and Seamans, R., 2018. Minority entrepreneurship in twenty-first
century America. Small Business Economics. 50(3). pp.415-427.
Bellamy, M., 2021. John Labatt Blows In and Out of the Windy City: A Case Study in
Entrepreneurship and Business Failure, 1889–1896. Canadian Historical
Review. 102(s2). pp.s498-s518.
Carbonara, E., Tran, H.T. and Santarelli, E., 2020. Determinants of novice, portfolio, and serial
entrepreneurship: an occupational choice approach. Small Business Economics. 55(1).
pp.123-151.
Crecente-Romero, F., Giménez-Baldazo, M. and del Val-Núñez, M.T., 2019. Competitiveness
and entrepreneurship rate in Europe during the economic recovery phase, 2012–
2016. International Entrepreneurship and Management Journal. 15(2). pp.455-470.
Farooq, Q. and et. al., 2020. Comparative analysis of entrepreneurship and franchising: CSR and
voluntarism perspective. Voluntas: International Journal of Voluntary and Nonprofit
Organizations. 31(3). pp.581-586.
Landström, H. and Harirchi, G., 2018. The social structure of entrepreneurship as a scientific
field. Research Policy. 47(3). pp.650-662.
Meister, A.D. and Mauer, R., 2018. Understanding refugee entrepreneurship incubation–an
embeddedness perspective. International Journal of Entrepreneurial Behavior &
Research.
Neumeyer, X. and et. al., 2019. Entrepreneurship ecosystems and women entrepreneurs: A
social capital and network approach. Small Business Economics. 53(2). pp.475-489.
San-Martín, P. and et. al., 2019. The teacher of entrepreneurship as a role model: Students' and
teachers’ perceptions. The International Journal of Management Education, p.100358.
Tien, N.H. and et. al., 2019. Sustainable social entrepreneurship in Vietnam. International
Journal of Entrepreneurship. 23(3). pp.1-12.
Xabibullayevich, U.L., Nabijanovich, B.D. and Ibragimovna, F.E., 2020. Increasing
effectiveness of economic educationprocessis basis for the development of qualification
of entrepreneurship. Asian Journal of Multidimensional Research (AJMR). 9(3).
pp.210-215.
ONLINE
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(Badri, and Hachicha, 2019) (Bates, Bradford and Seamans, 2021) (Bellamy, 2021) (Carbonara,
Tran and Santarelli, 2020)
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