The Impact Of Entrepreneurial Characteristics In Pakistan Business Essay - Free Essay Example

Sample details Pages: 8 Words: 2530 Downloads: 1 Date added: 2017/06/26 Category Business Essay Type Narrative essay Did you like this example? The Small and Medium Enterprises (SME) plays a very important role in the success development of any economy. According to the SME policy 2007, SME sector is the backbone of Pakistans Economy. Globally, this sector is the major growing force behind the fastest growing economy of China, in term of contribution to the national GDP, scale of assets, diversification of products and the creation of employment. Don’t waste time! Our writers will create an original "The Impact Of Entrepreneurial Characteristics In Pakistan Business Essay" essay for you Create order Similarly, the role of SME is well acknowledged in the other countries such as Japan Korea, and all other industrialized economies in terms of economic development (Hand Book on Islamic SME Financing Islamic Banking Department, State Bank of Pakistan, 2009). There are some hidden and apparent obstacles in the path of growth of small and medium enterprises in Pakistan as pointed out in the SME Policy development-2007; the poor national performance on the Human Development Index of the UN has its consequences for SMEs in Pakistan. These include inadequate and generic education and insufficient, poorly focused and under-serving training infrastructure. SMEs mostly draw their human resource (including the owners) from either the higher education institutions or the technical training infrastructure, both of which are not attuned to the SME needs nor are they equipped to address them. This situation limits the capacity and capability of SMEs to innovate, The SME sector neither possess es the financial strength nor the collective wisdom to climb its way out of this low equilibrium enterprise activity. In addition to these factors, according to the Hand Book on Islamic SME Financing (2007), political instability, law and order situation, financial constraints, energy crisis, taxation problems, labor issues, lack of coordination and regular information exchange mechanism among institutions are contributing adversely to all the efforts done for the SMEs development. Shabbir Kashif president of the Rawalpindi Chamber of Commers Industry, (2009, Nov) pointed out the approach of the new entrants in the business and as a big cause of their failure, People come to us say we have such amount of money and we are going to invest in that business. But the point is that prior to Investment they dont think about the future of that Business in next few years, what would be the market demand in future? Instead, they imitate the current trends and current demands of the market, which lead them to the failure. In these types of problems and uncertain situations, the entrepreneurs can do allot for the development and success of the SMEs. According to Thompson, L (2004) In todays world of change and uncertainty we need the talent of entrepreneurs more than ever, we need them to start new businesses, we need them to champion the change agenda in establish corporation and the public sector. Simpsin , M., Tuck, N. Bellany, S (2004), Entrepreneurs or owners-managers are individuals and have their own unique characteristics. The previous studies conducted on the Owner characteristics support that Owner characteristics are the important ingredient for the success of a firm like Lumpkin Dess (1996), Ferreira Azevedo. (2007), Smith J.R, Okhomina Mosley (2006). Research Aims Objectives The aim of the research is to investigate empirically the influence of owner characteristics on the SME performance in Pakistan. Owner Characteristics that will be stud ied are related with personal pursuits that are considered the most important characteristics Naldi, Lucia. Nordqvist, Mattias., Sjoberg ,Karin., Wiklund, Johan, (2007), like Innovativeness, Risk Taking, Proactive ness. Significance of the study This study will contribute to the Knowledge base regarding the Owner Characteristics that contribute in the firms performance, According to Bhutta, M., Rana, A. Asad ,U (2008) A major frustration for most policy researchers in the SME area is the virtual non-existence of scientific data on this sector in the country (i.e. Pakistan). Secondly, it will help entrepreneurs to understand their own strengths and potentials, and identify those characteristics that contribute more in the success of a firm. Thirdly, to the policy makers in this sector to identify and polish the existing entrepreneurs and the people who intend to establish new businesses. Problem Statement The impact of entrepreneurs characteristics on firms perform ance: An empirical study conducted on the surgical equipment manufacturing units in vicinity of Sialkot, Pakistan. Research Question What is the impact of entrepreneurial characteristics like innovativeness, proactive-ness, risk taking, on the firms performance? Literature review As cited by the Bhutta et al (2008), Entrepreneurship is the act of being an entrepreneur which is a French word meaning one who undertakes an endeavor. Entrepreneurs assemble resources including innovations, finance and business acumen in an effort to transform innovations into economic goods. This may result in new organizations or may be part of revitalizing mature organizations in response to a perceived opportunity. The most obvious form of entrepreneurship is that of starting new businesses; however, in recent years, the term has been extended to include social and political forms of entrepreneurial activity. When entrepreneurship is describing activities within a firm or large organizatio n it is referred to as intra-preneurship and may include corporate venturing, when large entities start spin-off organizations. Whereas according to Lumpkin, G. T. Dess, G. G. (1996) the term Entrepreneurial orientation means the organizational process, methods and styles that firms use to act entrepreneurially. Entrepreneurs Characteristics and Firms Performance Entrepreneurial characteristic is an independent variable in our study. Pointing out the importance of the owner characteristics regarding the firms success and good performance. Ferreira Azevedo (2007, p. 15) commented that the firms which grow more, are those which are entrepreneurially oriented that detect opportunities and obtain an advantage when searching for those opportunities. However, not all firms search for opportunities, a possible explanation could the entrepreneurs attitude, this is, the desire to grow or not. In the previous literature the ownership characteristics has been defined differently by the researchers. According to Lumpkin Dess (1996) Efforts have served to point out the various dimensions of the entrepreneurial process; they have not led to any widely held consensus regarding how to characterize entrepreneurship. This lack of consensus has impeded progress for researchers towards building and testing a broader theory of entrepreneurship and has made it especially, difficult for them to investigate the relationship of entrepreneurship to performance. As evidenced by the previous literature, the researchers have identified different ownership characteristics that influence the success and performance of an organization. These characteristics are autonomy, innovativeness, risk taking, proactiveness, (Ferreira Azevedo, 2007 Keh , H.., Nguyen, T. Ng, H 2007), competitiveness, aggressiveness, (Hughes et al. 2007 Lumpkin Dess, 1996). Smith, Okhomina Mosly (2006) took psychological traits e.g. need for achievement, internal locus of control , tolerance for ambiguity and risk taking propensity, and social factors such as education, a supportive environment the researchers i.e. Smith , J. R. Mosley , Alisa L (2006) also argued that personality traits viewed alone are inappropriate to explain the phenomenon of entrepreneurship. According to Bhutta et al (2008) There is dearth of knowledge in Pakistan on this sector ( S.M.E) further more he studied the owner characteristics/ orientation like education , media-related habits , use of information technology , number of investor and generation in the business (and found a positive relation ) with the health of the firm. In study of ORegan, Sims Ghobadian (2005) presented the relationship between ownership, decision making and employee deployment and the performance of the firm. Their findings showed that ownership profile is key factor in the success of any SME. As cited by Ferreira Azevedo (2007) Covin Slevin (1991) supported Miller point of view by referring that organizations a nd not only individuals, can have entrepreneurially. They also use defend, use of risk taking innovativeness and proactiveness, as the relevant dimensions of the entrepreneurship. Nevertheless refer to this as a type of behavior labeled as entrepreneur posture. Also cited, Miller (1983), the concept of Entrepreneur orientation was seen as a combination of three dimensions. Innovativeness: is concerned with supporting and encouraging new ideas experimentation and creativity likely to result in new products, services or processes (Miller and Friesen, 1982 and Yusuf, A. 2002). Risk Taking: Measuring the extent to which individuals differ in their willingness to take risk is contentious (Lumpkin and Dess, 1996). Proactive ness: is concerned with first mover and other actions aimed at seeking to secure and protect market share and with the forward looking perspective reflected in action taken anticipation of future demand (Lumpkin and Dess, 1996, Ferreira et al, 2007). In thi s paper the focus of the study is on the owners characteristics like innovativeness, risk taking behavior and proactiveness (Naldi, et al. , 2007), an important role as firms which grow better , have the tendency to develop an EO supported by proactiveness, innovativeness and risk taking .(Ferreira and Azevedo,2007, p.15) (Yusuf A., 2002). Firms Performance and Performance Measures: It is a Dependent variable in the study by the firms performance it means that the performance and success of the firm. O Regan et al. (2005) argued that obtaining measures of performance for SMEs was notoriously difficult. He cited, Laitinen in 2002 suggested that performance can be defined as the ability of an object to produce results in a dimension determined a priori, in relation to a target. He also suggested that the previous studies proved the use of subjective self reporting measures of performance as most of the entrepreneurs avoid/hesitate providing factual or objective figures of their firms performance can be examined both objectively and subjectively (Lumpkin Dess, 1996). Objective examination usually includes comparing firm performance with hard financial measures, whereas subjective examination can be related to more personal issues. In this study, the term subjective measures refers to self-reported measures (Yusuf , 2002). Furthermore, he utilized six items to measure the performance construct , three of these items were profitability indicators , (return of sales, return on investment, return on assets), the other three items were growth indicators (growth in sales, growth in profit and growth in employment). Respondents were asked to indicate how satisfied they are with the performance of their firm and vice a versa. Competitors along each of the six performance measures at a five point Likert scale from much unsatisfied one to very much satisfy were used for that purpose (Yusuf, 2002). Despite the large area of amount of research in the area of performance, no consensus has emerged on appropriate measure (Yusuf, 2002) he further cited the previous work that Performance is multifaceted in nature. This is thought to be necessary because entrepreneurial activity at times leads to different outcomes on different performance indicators so it is suggested that performance measure should include both growth and performance (Wiklund, 1991) regarding the factuality of the objective measures. Bhutta et al, (2008) Yusuf, (2002) argued that objective measures are accurate but the problem is that the respondents are not willing to provide i.e. they hesitate to provide actual figures. On the basis of the above literature review, in this study the performance is operationalised and adopted from Naldis (2007) work, which is based on the approach advocated by (Wiklund, 1991) and also suggested by Yusuf, ( 2002) in above literature review. They operationalized the performance into four dimensions Net profit (i.e. sales operational cost), Growth of the companies value, cash flow, development of sales. They asked the questions to the respondents in self perceived and subjective manner. For instance, the researcher asked, I want to know if you think that your outcome during the past three years has been better, worse or equal to that of other companies in your industry (5 point Likert scale ranging from much worse to m uch better was used). Theoretical Framework Firms Performance Entrepreneur Characteristics Innovativeness Risk taking Pro activeness Adoptability Net profit (i.e. sales operational cost) Growth of the companys value, Cash flow Development of sales Hypothesis Development Owner Characteristics and SME Performance According to Keh, et al. (2007, p.596), the factual evidences prove that there is positive correlation between EO (Entrepreneurial Orientation) and FP (Firm Performance). On the basis of above finding a hypothesis is generated that Owner characteristics have positive impact on the firms performance. H1: Owner characteristics have positive impact on the firms performance. Innovativeness and performance According to Susan, et al, (2005), innovativeness, competitiveness effect economic financial results and statistically significant and moderate in strength, Innovativeness is also an important factor in entrepreneurial orie ntation (Salvou Lioukas, 2003). H2: Innovativeness has a positive impact on the Firms performance. Risk taking and performance Naldi et al (2007), argued that family firms take risks but to lesser extent than do non family firms. Naldi cited, Rauch et al, 2004 found that the risk taking dimension is positively related to performance, even if significantly smaller than other aspects of Entrepreneur Orientation. H3: Risk taking is positively related to the firms performance. Proactiveness and Performance Proactiveness, an emphasis in the persistence and creativity to overcome obstacles (Ferreira, et al, 2007) H4: Proactiveness of the entrepreneur is positively related with Firms Performance. Research Methodology a) Research design Variables: Dependent Variables: In this study Firm Performance was a dependent variable. Independent Variable: Entrepreneurs Characteristics was independent variable. Type of investigation The type of investigation was co relational in nature, with minimal interferenceÂÂ  in the normal course of work or routine tasks. The study was conducted in the natural environment of the organization. Self administered questionnaires were distributed among the owners / partners of the manufacturing units. Unit of Analysis The data was collected from individual Entrepreneur or partner of surgical equipment manufacturing firm. So unit of analysis in this investigation was Entrepreneur or partner (individual). Sample The sample for data collection consisted of 115 entrepreneurs / partners, contacted randomly from the surgical equipment manufacturing units situated in the vicinity of Sialkot. b) Hypothesis development: This research was a hypothetical testing by type. Seven hypothesis were developed through extensive literature review in the literature review section of this report. H1: Owner Characteristics are positively related to firm performance. H2: Innovativeness has a posit ive impact on the Firms performance. H3: Risk taking is positively related to the firms performance. H4: Proactiveness of the entrepreneur is positively related with Firms Performance. Data collection tool Self administered questionnaire was used to collect first hand data from the respondents (owner / partner). Questionnaire was developed after extensive literature review. The different sections of the questionnaire were derived from Keh et al.(2007) , Bhutta et al.(2008) Naldi et al.(2007)(See Appendix I ) Questionnaire consisted of a cover letter, and five sections ranging from A to E. Section A was about Personal Information , Generation in business, education levels Technology adoptability, while the sections B consisted of questions regarding Innovativeness , Proactiveness Risk taking where as Section C consisted of four questions regarding firms performance. Measurement The entrepreneurial characteristics Innovativeness, risk taking, proactiveness fir ms performance were measured on 5 point Likert scale. Where ranking started from 1= strongly disagree to 5= strongly agree , Innovativeness, Proactiveness, Risk Taking, while responses to the Firm Performance questions ranged from 1=Much Worse to 5=Much better. Surgical Instruments manufacturing Industry in the sialkot area is selected in this study. According to Board of Investment Govt. of Pakistan report on Pakistan Light Engineering Sector, among these units about 230 surgical units are located in Sialkot District. In this study 50% of the respondents i.e ownwers or partners were selected randomly of these 230 firms as a sample. Questionnaire was adapted from Yusuf (2002), Naldi, et al. (2007), Bhutta et al. (2008) Ferreira, et al. (2007). Questionnaire was distributed personally to the Owner/ Active Partners.

Essay on The Next Depression - 1435 Words

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Carbonated drinks Essay Example For Students

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Sainsburys communication methods Essay Example

Sainsburys communication methods Paper People working in different functional areas have to communicate with each other in order to achieve the same objectives but they also need to communicate with other range of individuals and organisations, including their customers, competitors and their suppliers as well as their own employees. Internal communication is communication that takes place within an organisation, while external communication takes place between the organisation and the people outside the business. All large businesses use information communication technology (ICT) to communicate internally and externally. ICT is any equipment or interconnected system of equipment that support all forms of technology used to create, store, manipulate, manage, move, display, switch, interchange, transmit or receive information in its various forms. This has had a major effect on the way communication takes place in the business because they help to play an important role in the effectiveness of communication. The main methods of ICT Sainsbury uses externally Face to face: Sainsbury sets up a customer service desk which deals with customers enquiries and complaints E-mail: This is used to communicate with the customers who enquire about information on Sainsbury and updates on the latest events at Sainsburys Telephone: Sainsbury also use this to communicate with the customers who also seek for information regarding products, etc Interviews: Sainsbury sometimes interview with someone outside the organisation who may be interested in something Sainsbury has done, e. g. press, radio or television Business letters: Sainsbury use business letters to make arrangements without the need for parties to meet. We will write a custom essay sample on Sainsburys communication methods specifically for you for only $16.38 $13.9/page Order now We will write a custom essay sample on Sainsburys communication methods specifically for you FOR ONLY $16.38 $13.9/page Hire Writer We will write a custom essay sample on Sainsburys communication methods specifically for you FOR ONLY $16.38 $13.9/page Hire Writer Business letters also provide both parties with a permanent record of such arrangements and also confirm verbal arrangements Faxes: Sainsbury uses fax machines to send both written and visual information electronically over the telephone line Video conferencing: Sainsbury uses this when they need to have face to face meetings with people who are geographically separated Internet: Sainsbury has a website which can be viewed by the customers to find out all about the current developments that are taking place in the fields in which Sainsbury operate. This is a benefit to the customers because it allows the customers to see how well they are doing etc Media: Sainsbury uses the media such as TV, radio, magazines, press etc to advertise and promote their products, created with desk top publisher software. Electronic data interchange: This is a network link that allows Sainsbury to pay suppliers electronically without the need for invoices and cheques, this reduces time, paperwork and costs Electronic funds transfer: Electronic Funds Transfer (EFT) provides for electronic payments and collections e. g. switch or credit cards. EFT is safe, secure, efficient, and less expensive than paper check payments and collections. (This also concerns the banks and credit control agencies) The main methods of internal communication Sainsbury uses Face to face: Members of the staff communicate with each other sometimes when they are working together as a team or when they are seeking information E-mail: This is used to forward any attachments to other members of the staff E. g. From finance function to HR function E-mail is much quicker, especially if sent overseas, and can be sent to more people at one time than regular methods Telephone: This is to pass on information to other staff or enquire about something concerning the company Meetings: This is used with the senior management such as the store, deputy and department managers. Meetings are also held with the staff. Senior management meeting usually takes place monthly and staff meetings held weekly. Meetings can save a lot of time and can get feedback from the people at the meeting immediately. It also saves time on having to discuss things individually. Agendas and minutes can be written on word processor which then can be sent by e-mail or internet. Electronic point of sale: This is where the customers pay for their goods, the tills are connected to the computer storing the stock database, when an item is sold its barcode is scanned and the product details including price will appear on the screen, after an item is sold the stock level of the item is automatically decreased Paging devices: Sainsburys staffs uses a small electronic device which lets a person know when they are in need of contact Bulletin boards/ office displays: Messages are put out on notice boards to note other members of staff of any recent news or event taking place e. g. Office party Display product development: This is where people can see and comment on the scheme, this gives them the staff the chance to put their views across Electronic data interchange: This is a network link that allows Sainsbury to pay people within the company electronically without the need for invoices and cheques, this reduces time, paperwork and costs so this method can be use internally and externally.