7.0 Entrepreneurship and Small Business Success: Entrepreneurship and Small Business Enterprise Growth in Uganda
7.0 Entrepreneurship and Small Business Success: Entrepreneurship and Small Business Enterprise Growth in Uganda
Waswa Balunywa
Director
Makerere University Business School
Kampala, Uganda
Common day definition of entrepreneurs tend to equate it with those who start small business (Drucker, 1993). This is a fallacy. Entrepreneurship is a dynamic process of creating wealth whether in small organisations or large organisations. Entrepreneurship is a continuous search for change, responding to it and exploiting it as an opportunity (Drucker, 1993). Most successful organisations are successful because of the entrepreneurial behaviour of their leaders and the entrepreneurial culture prevalent in the organisation. The key entrepreneurial behaviours include the following :
• The desire to win and succeed coupled with vision
Entrepreneurs want to succeed. They are goal oriented and focus their attention and energy on the achievement of specific goals. Many business people go to business without clear goals and therefore they fail to succeed as entrepreneurs. In her book, Change Masters, Rosabeth Moss Kanter (1993) cites visionaries who led companies out of problems. She cites cases of General Electrics, IBM, as institutions where the entrepreneurial spirit either made or unmade these giant companies. Steve Jobs, the founder of Apple Computer, founded the computer at the age of 21 (Michael Hammer, 1994). Prahalad and Gamel, (1994) talk of successful companies that rest on the creativity of visionaries whose entrepreneurial spirit led to the success of various companies. Kinyanjui (1993) in her study found that market opportunity. Desire for independence and income generation constituted over 60 percent of reasons why small enterprises were formed in Kenya. These are typical entrepreneurial characteristics.
• Entrepreneurship therefore has been a leading factor in the success of many businesses
both large and small. The small scale enterprises are much more numerous than the
large ones and the tendency has been to believe that they are automatically entrepreneurial. However this is not the case as the growth of these businesses would have been taken for granted. Small businesses are established for various reasons. Some are income (Elkan, 1988), others to grow big (McCory, 1956), and others are forced Kinyanjui (1993). Not all these are entrepreneurial characteristics. This is a limitation for small business success.
• A need for achievement
Related to the need to win is the need to achieve. McClelland (1961) argues that successful entrepreneurs are characterised by a strong need for achievement and that this drives them to achieve. This drive makes them creative and enables them to take risks. What else does a business require. Goals to achieve, the desire to achieve them, the intensity of purpose, and the drive to do what it takes to achieve the goal.
• They love change
Entrepreneurship is a continuous search for change and a continuous exploitation of the change as an opportunity (Drucker, 1993). Entrepreneurs are thrilled by anything knew and frustrated by a slackness of things. In today's changing environment, with ups and downs that characterise the business environment, the only organisation sure to survive is the one that is entrepreneurial (Kanter, 1993). The one that loves change. There is evidence that the success of Microsoft, Toyota, British Airways, is a result of their ability to cause change themselves. And the failure of many companies is a result of their inability to keep up with the change (Kanter, 1993).
• They are the creative type
Creativity is the generation of ideas and precedes innovation. Innovation is a specific function of an entrepreneur (Drucker, 1993). Innovation is something new or different. To be able to adjust to change or manage change, business must continuously come up with new ideas, new products, new processes. These can only come from creative people. The Entrepreneurs. Entrepreneurs come with ideas as a result of changing needs and changing environmental factors and translate these ideas to create wealth.
• Risk taking
While entrepreneurs are not high risk takers, (Hisrich, 1992) they do take risks. And risk is the source of reward. Business reward. Entrepreneurs take risks and succeed. Risk involves looking into the future and believing that there is a probability of the occurrence of certain events. And on this basis a decision is taken to do or not to do something.
In several studies that have been undertaken (Sewannyana, 1997; Mutazindwa, 1997), there has been evidence that there is a relationship between entrepreneurship behaviour and business growth. Mutazindwa (1997) surveyed over 100 small scale enterprises in different areas of business, metal, textile, trade, carpentry and motor repair, and established that there was a relationship between entrepreneurship and business growth. Amongst the key entrepreneurship behaviour patters, she noted a positive relationship between successful enterprises and vision, risk taking and the need for achievement. She came to the conclusion that entrepreneurship behaviour existed amongst successful companies but also further that it was not a panacea for business success. Sewannyana (1997) in his study finds that amongst the small proprietors, who were the subject of his study, the entrepreneurship behaviour is exhibited in the majority of proprietors. Unlike earlier thinking, he comes to the conclusion that the poor performance of small business is attributed to factors other than entrepreneurship mainly bad financial management.
These findings tend to conclude that entrepreneurial behaviour exists in many small firms but that despite that they are not successful. Further research in this area is necessary.
70 Entrepreneurship and Small Business Success Entrepreneurship and Small Business Enterprise Growth in Uganda - To learn more about this author, visit Makerere University Business School's Website.
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by
Waswa Balunywa
Director
Makerere University Business School
Kampala, Uganda
Common day definition of entrepreneurs tend to equate it with those who start small business (Drucker, 1993). This is a fallacy. Entrepreneurship is a dynamic process of creating wealth whether in small organisations or large organisations. Entrepreneurship is a continuous search for change, responding to it and exploiting it as an opportunity (Drucker, 1993). Most successful organisations are successful because of the entrepreneurial behaviour of their leaders and the entrepreneurial culture prevalent in the organisation. The key entrepreneurial behaviours include the following :
• The desire to win and succeed coupled with vision
Entrepreneurs want to succeed. They are goal oriented and focus their attention and energy on the achievement of specific goals. Many business people go to business without clear goals and therefore they fail to succeed as entrepreneurs. In her book, Change Masters, Rosabeth Moss Kanter (1993) cites visionaries who led companies out of problems. She cites cases of General Electrics, IBM, as institutions where the entrepreneurial spirit either made or unmade these giant companies. Steve Jobs, the founder of Apple Computer, founded the computer at the age of 21 (Michael Hammer, 1994). Prahalad and Gamel, (1994) talk of successful companies that rest on the creativity of visionaries whose entrepreneurial spirit led to the success of various companies. Kinyanjui (1993) in her study found that market opportunity. Desire for independence and income generation constituted over 60 percent of reasons why small enterprises were formed in Kenya. These are typical entrepreneurial characteristics.
• Entrepreneurship therefore has been a leading factor in the success of many businesses
both large and small. The small scale enterprises are much more numerous than the
large ones and the tendency has been to believe that they are automatically entrepreneurial. However this is not the case as the growth of these businesses would have been taken for granted. Small businesses are established for various reasons. Some are income (Elkan, 1988), others to grow big (McCory, 1956), and others are forced Kinyanjui (1993). Not all these are entrepreneurial characteristics. This is a limitation for small business success.
• A need for achievement
Related to the need to win is the need to achieve. McClelland (1961) argues that successful entrepreneurs are characterised by a strong need for achievement and that this drives them to achieve. This drive makes them creative and enables them to take risks. What else does a business require. Goals to achieve, the desire to achieve them, the intensity of purpose, and the drive to do what it takes to achieve the goal.
• They love change
Entrepreneurship is a continuous search for change and a continuous exploitation of the change as an opportunity (Drucker, 1993). Entrepreneurs are thrilled by anything knew and frustrated by a slackness of things. In today's changing environment, with ups and downs that characterise the business environment, the only organisation sure to survive is the one that is entrepreneurial (Kanter, 1993). The one that loves change. There is evidence that the success of Microsoft, Toyota, British Airways, is a result of their ability to cause change themselves. And the failure of many companies is a result of their inability to keep up with the change (Kanter, 1993).
• They are the creative type
Creativity is the generation of ideas and precedes innovation. Innovation is a specific function of an entrepreneur (Drucker, 1993). Innovation is something new or different. To be able to adjust to change or manage change, business must continuously come up with new ideas, new products, new processes. These can only come from creative people. The Entrepreneurs. Entrepreneurs come with ideas as a result of changing needs and changing environmental factors and translate these ideas to create wealth.
• Risk taking
While entrepreneurs are not high risk takers, (Hisrich, 1992) they do take risks. And risk is the source of reward. Business reward. Entrepreneurs take risks and succeed. Risk involves looking into the future and believing that there is a probability of the occurrence of certain events. And on this basis a decision is taken to do or not to do something.
In several studies that have been undertaken (Sewannyana, 1997; Mutazindwa, 1997), there has been evidence that there is a relationship between entrepreneurship behaviour and business growth. Mutazindwa (1997) surveyed over 100 small scale enterprises in different areas of business, metal, textile, trade, carpentry and motor repair, and established that there was a relationship between entrepreneurship and business growth. Amongst the key entrepreneurship behaviour patters, she noted a positive relationship between successful enterprises and vision, risk taking and the need for achievement. She came to the conclusion that entrepreneurship behaviour existed amongst successful companies but also further that it was not a panacea for business success. Sewannyana (1997) in his study finds that amongst the small proprietors, who were the subject of his study, the entrepreneurship behaviour is exhibited in the majority of proprietors. Unlike earlier thinking, he comes to the conclusion that the poor performance of small business is attributed to factors other than entrepreneurship mainly bad financial management.
These findings tend to conclude that entrepreneurial behaviour exists in many small firms but that despite that they are not successful. Further research in this area is necessary.
70 Entrepreneurship and Small Business Success Entrepreneurship and Small Business Enterprise Growth in Uganda - To learn more about this author, visit Makerere University Business School's Website.
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