Small Business Management Essay

1551 words - 6 pages

Essay Plan
1 Definition of smaller enterprises
There are various definitions of smaller enterprises provided from different times and areas. One of the earliest definitions was provided by Bolton Report (1971), which has indicated that a small enterprise should meet three criteria: independent (not part of a larger enterprise); managed in a personalized manner(simple management structure); relatively small share of the market(the enterprise is a price ‘taker’ rather than price ‘maker’). There are also quantitative definition of the smaller enterprise in terms of measurement of the assets, turnover, profitability and employment from different sectors and countries (Bolton, 1971).

2 What is entrepreneurial small business
Throughout Europe, great attention has been paid to the small business area and to the contribution that entrepreneurial small businesses can bring beneficial to transforming the economy (EiM, 1994).The concept of entrepreneurship is often considered with new venture creation and small enterprise management, and the terms of owner-manager and self-employment (Gibb, 1996). While Kirby (2003) has argued that entrepreneurship is far broader than these concepts mentioned above. Not all owner-managers can be considered as entrepreneurs, nor are all small business entrepreneurial (Carland et al., 1984). Carland also has argued that entrepreneurial small business is aiming at profitability and growth, and the business is regarded to be innovative.

3 Strategy, management and growth in entrepreneurial SMEs enterprises
According to Deakins and Freel (1998), the literature on entrepreneurship process has attempted to dichotomies into two approaches, which is from the nature of entrepreneurs and their role in economy, and from the personality traits of individual entrepreneurs. While the entrepreneurial SMEs enterprises should be equipped with such abilities above:
• Ability to network
It has been proved by lots of writers that the level of networking activity has an effect on the quality of experiential learning of the entrepreneur (Johannisson, 1986; Shaw 1997; Szarka, 1990). Indeed, it is significant that the SMEs enterprises learn to join hands with other resources in their industry at early stage (Deakins and Freel, 1998).
• Ability to assimilate experience and opportunity
The ability to learn from experience is one of the key abilities and it is possible to recognize and grasp the opportunity that arises out of the experience. Penrose (1971/1952) argued that the possibility of internally experienced personnel to formulate development strategy is essential to gain confidence in the outcome.
• Ability to reflect on past experience and mistakes
The relationship of past experience and growth is not novel. As Penrose (1971/1952) has mentioned that the availability of former experienced executive resource would allow for a expending of the planning horizon. Therefore, the ability of entrepreneur to formulate and execute...

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