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2010 | Buch

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Entrepreneurship in a European Perspective

Concepts for the Creation and Growth of New Ventures

verfasst von: Christine K. Volkmann, Kim Oliver Tokarski, Marc Grünhagen

Verlag: Gabler

Enthalten in: Springer Professional "Wirtschaft+Technik" , Springer Professional "Wirtschaft"

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Foreword One of the most frequently debated questions in management relates to what the r- sons for success and failure of new companies, corporate initiatives and projects are. Obviously, to increase the rate of young enterprises’ success while reducing the n- ber of their failures would be a win-win situation for everyone. It is therefore vital to possess a “road map” or set of good advice on this never-easy undertaking. This book responds to such a need by presenting, in an accessible way, an overall view of the fundamental, critical areas of management of both the start-up and the continuity of new enterprises. Primarily, this book is addressed to students and teachers of the growing academic field of entrepreneurship studies. However, in my opinion, it also has an appeal to students and academics in any scholarly field, for in our times we can well speak about an organic interdependence between “entrepreneurship” and “higher education and research”. A number of reasons exist for this double-helix arrangement. On the one hand, it can be pointed out that the role and conditions of present-day higher education call for much more open and innovative ways with which to approach core tasks such as teaching, the organization of studies and the undertaking of research, not to mention the whole area of funding.

Inhaltsverzeichnis

Frontmatter

1. Basic Principles of Entrepreneurship

Abstract

A well-functioning competition system in a market economy is made possible by a multitude and diversity of enterprises. Among them, recently-founded young enterprises are today considered to be the main important engines of economic, technological and social changes in the life of nations. Considering this aspect, innovative new enterprises form the nucleus of functioning market economy systems. From the political point of view as well, the subject of entrepreneurship, interpreted as entrepreneurial thinking and acting, has achieved a greatly improved status in the last few years. In Europe [within the framework of the reorientation of the Lisbon strategy formulated by the EU commission in 2005] the encouragement of entrepreneurial spirit in education and culture as well as supporting new business formation and promoting the growth of young enterprises have gained special significance. [A good overview of world-wide initiatives to promote entrepreneurial mindsets and activity in a broad sense can be found in a report on educating the next wave of entrepreneurs published by the World Economic Forum 's Global Education Initiative; see Wilson (2009)]

Christine K. Volkmann, Kim Oliver Tokarski, Marc Grünhagen

2. Processes, Entrepreneurial Opportunity, Innovation

Abstract

Definitions and explanations of the entrepreneurial process occur frequently in entrepreneurship literature. Often “entrepreneurial process” and “process of new venture formation” are used as synonyms. However, this book will not adopt this definition, as the new venture or enterprise formation represents only a section of the entrepreneurial process. Many of the explanations are derived from phase or life-cycle based models. In a simplified study of an ideal case, the entrepreneurial process comprises all functions, activities and actions which are associated with the recognition of an entrepreneurial opportunity, its evaluation and corresponding development of a business idea, as well as with writing a business plan, establishing an organization and founding of the enterprise itself, taking into account the required resources, ensuring the viable market establishment of the enterprise and the achievement of growth (opportunity exploitation) [Katz/Gartner (1988); Shane/Venkataraman (2000); Brush (2001); Allen (2003)]. Note that the process to establish a venture in the market place involves substantial sector heterogeneity – the steps which are necessary for establishing a restaurant business will differ considerably from those required for founding a high-tech start-up. [A good discussion of industry-specific entrepreneurship, e.g., in the technology domain, is offered in Dorf/Byers (2008)]

Christine K. Volkmann, Kim Oliver Tokarski, Marc Grünhagen

3. The Business Plan and Formation of the Enterprise

Abstract

The future of an enterprise depends on sound prior planning; business planning contains the intellectual anticipation of the future of an enterprise, forming the nucleus for the later development of the enterprise. In advance of working out a comprehensive business plan, a short feasibility study is often carried out in order to investigate the fundamental practicability of the envisioned venture project by means of a preliminary rough analysis [Allen (2003)]. If no customer demand or willingness of customers to pay is detected for the intended product or service offer, this particular venture-project should, if considered realistically, already be abandoned in the phase of the feasibility study. Alternatively, after a successful rough analysis a detailed business plan can be prepared.

Christine K. Volkmann, Kim Oliver Tokarski, Marc Grünhagen

4. Marketing

Abstract

Marketing is of crucial importance for the success or failure of an enterprise, as its success is ultimately decided in the market, competing for the target customers. The degree of market orientation of an enterprise may well impact its overall business performance, both in the context of young and small enterprises and in the process of launching new products [Keh et al. (2007); Atuahene-Gima et al. (2005)]. [See also the entrepreneurial element in market-driven behaviour as creative distruction in firms such as Starbucks or Dell; Schindehutte/Morris/Kocak (2008)] Moreover, addressing marketing issues when establishing a new enterprise is also considered essential by important stakeholders such as equity investors [as noted in Hills/Hultman/Miles (2008) referring to a study which has been developed already some time ago in Hills (1984)]. In practice, e.g., venture capitalists will look at how the enterprise plans to enter the market, which target groups will be addressed, and how the firm 's product or service offer will be communicated and distributed to potential customers; this is since successful market establishment and growing sales volumes is a sine quo non for financial prosperity in the long run.

Christine K. Volkmann, Kim Oliver Tokarski, Marc Grünhagen

5. Organization and Personnel

Abstract

Specific questions of organization and personnel planning and management are not relevant for all newly founded enterprises. However, for those start-ups aiming at growth, organizational and personnel aspects are of central importance within the context of a target-oriented and systematic growth management. Generally speaking, for all emerging enterprises, initial organizing activities seem to be critical to their survival [Brush et al. (2008)].

Christine K. Volkmann, Kim Oliver Tokarski, Marc Grünhagen

6. Start-up and Growth Financing

Abstract

Knowledge of financing strategies as well as the function and mechanism of different financing instruments is necessary to recognize and counteract in good time threatening financing crises and liquidity bottlenecks. Within this context, special importance should be attached to the optimization of the capital and risk structure during the phases of start-up and growth. The result of having low-equity equipment is often low economic strength (as became apparent, for example, in the large number of insolvencies of young enterprises during the period from 2000 to 2002 when the “new economy bubble” burst) [Rovenpor (2004)]. Numerous young enterprises had promising business models at their disposal, yet the main reasons for their insolvencies were financing problems which they were unable to resolve. The founders were in many cases not in a position to obtain external capital for overcoming the crisis and to manage their payment flows effectively. For example, for the US venture capital market, which is the world 's largest, data from the National Venture Capital Association show that back in 2000 US VC companies had provided more than 100 billion USD while by 2003 the investment volume dropped below 20 billion USD [www.nvca.org; cf. also Timmons/Spinelli (2004)].

Christine K. Volkmann, Kim Oliver Tokarski, Marc Grünhagen

7. Growth and Growth Management

Abstract

Innovative and, in particular, rapidly growing enterprises generate new jobs, new products and services or even new markets [for the role in industry evolution played by newly emerging populations of firms see, e.g., Aldrich (1999)]. Such enterprises strive to build and improve their market position, increase their turnover and may also achieve rising profits. With this in mind, growing enterprises are not only of central importance in relation to the development of an economy [Carree/Turik (2003)], but also from the microeconomic perspective of business management. Numerous European enterprises, which were founded on the basis of innovations with bright prospects for the future, have exploited the entrepreneurial opportunities their founders perceived and achieved profitable growth, such as, for example, the Dutch-German supplier of biomedical and technological equipment Qiagen [Kock (2002)]. Nevertheless, the number of fast growing enterprises (gazelles, see below) is demonstrably lower in Europe than in the USA [Twaalfhoven (2005)]. The reasons are numerous and manifold, and their origin lies probably not only in cultural differences. Differentiated empirical research studies are still required to explore the phenomenon of young enterprise growth, especially in the international setting.

Christine K. Volkmann, Kim Oliver Tokarski, Marc Grünhagen

Backmatter

Titel: Entrepreneurship in a European Perspective
verfasst von: Christine K. Volkmann
Kim Oliver Tokarski
Marc Grünhagen
Verlag: Gabler
Electronic ISBN: 978-3-8349-8752-5
Print ISBN: 978-3-8349-2067-6
DOI: https://doi.org/10.1007/978-3-8349-8752-5

Springer Professional

Über dieses Buch

Inhaltsverzeichnis

Frontmatter

1. Basic Principles of Entrepreneurship

2. Processes, Entrepreneurial Opportunity, Innovation

3. The Business Plan and Formation of the Enterprise

4. Marketing

5. Organization and Personnel

6. Start-up and Growth Financing

7. Growth and Growth Management

Backmatter

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