Chapter 3

Entrepreneurship and human resources

Introduction

One of the main characteristics of the small industrial business

sector is the decisive role the entrepreneur has with regard to the

success of the enterprise which means that the feasibility of an

investment depends very much on the entrepreneur and managerial

capabilities of the person or persons responsible for a business.

Entrepreneurial and management requirements

Entrepreneurial and managerial talents, apart from professions, technical and

commercial skills and experience, are essential for the success of any business

venture, whether undertaken alone or with a partner.

. This holds true for small industrial business in developing as well as

industrialized countries. When preparing an opportunity study it is necessary to

identify such subsector-typically requirements as a basis for assessing the

entrepreneur and managerial qualifications of individual investors.

These subsector- dependent and most probably also country-individual persons

and their projects applying the concept presented in part three of the manual.

Types of entrepreneurs

Four types:

The all rounder with both strengths creative or executive

The pioneer with dynamic creative strengths

The organizer with administrative executive strengths

The routinier with no special strenghts

Enterpenural qualification and abilities

Various concept have been proposed to assess entrepreneur qualification and

abilities. The most recent approach also adopted here, is based on correlation

between entrepreneur values and success in business as applied by the

STTRATOS and INTERSTRATOS projects in Europe.

A more pragmatic approach than the typification described above is used by

Austrian bankers for assessing the strengths and weaknesses of entrepreneur and

leadership behavior in persons applying for business start-up credits Emphasis is

put on manager-employee relations, which if excellent represent an essential

strength in small industrial concentrates on the assessment of entrepreneur self-

image and staff relations.

Several qualifications and abilities are assessed; Entrepreneur skills and involvement such as the following:

The ability to consider in involvement in advance the consequences of actions for the whole enterprise and to include cost-benefits considerations when setting up business objectives.

The readiness to act in the interest of the whole enterprise and to make personal skills available to the firm at any time

Staff development

Employment of staff according to talents and skills

Motivation of staff

Formulation of objective

Staff information and communication

Readiness and ability to coordinate and supervise

Staff assessment recognition and critique

Staff relation and cooperation

. Assessment of human success factors

on entrepreneurial values and attitudes, is based on the correlation

between personal orientation as represented by values and success

as an entrepreneurial result obtain from empirical research suggest

that personal entrepreneurial characteristics also depend on the

social and cultural environment,

therefore it is important to assess subsector typical data for a

country or region before using a value and behavior profiles to

evaluate individual projects.

Assessment of entrepreneurial behavior

typical profiles for entrepreneurial talents and behavior (creative-dynamic vs.

administrative-executive) in accordance with the typification of entrepreneurial

behavior will be assed for the opportunity study this profile of entrepreneurial

behavior will be assessed for comparable

enterprises to obtain a good understanding of the talents and behavior of typical of

successful entrepreneurs these profile s will then be the basis for assessing

individual entrepreneurs as outline in part of three of the manual. The data will

also serve to give a better understanding of the entrepreneur’s requirements that

are typical for subsector.

Assessment of personal profession background

When used in relation to subsector analysis,, on the personal

background and general qualifications of entrepreneurs, will provide

statistical data on the correlation between professional experience,

family involvement and business success.

Once sufficiently accurate data are available from a representative

sample, the use of this questionnaire will add to the reliability of the

evaluation of an individual’s entrepreneurial potential and the

probability of business success.

Sociocultural differences in entrepreneurial

characteristics

It is not surprising that the characteristics of successful

entrepreneurs are not the same in different sociocultural

environments, although some fundamental talents and behavior are

probably very much alike.

The differences have to be taken into account when comparing

entrepreneurial profiles drawn up in different countries or regions.

Entrepreneurial profiles differ, for example, from the US to

Continental Europe.

Comparison of entrepreneurial profiles in

Continental Europe and the United States

In Europe, the small-scale entrepreneur typically has a dominating

attitude and strongly identifies himself or herself as the owner of the

business.

A strong family orientation can be observed, combined with an

emphasis on tradition and continually the firm is the entrepreneur’s

“castle”.

The European type of entrepreneur, particularly in small business,

largely represents the “center of gravity” in a comprehensive sense.

Table 4. Comparison of entrepreneurial

characteristic in Europe and the United States

Europe:

Strong ownership identification with emphasis on continuity and long term perspective

Particularly in small business the entrepreneur is the center activity

Few if any link between small business entrepreneur and universities or related institutions with concomitant underutilization of potential innovative resources and know how.

Banking services and related consulting and advice more substantial comprehensive and readily accessible legal arrangements and procedures relatively straight forward less complex and cumbersome.

Cont.

United States:

Ownership identification less prevalent especially small business risk oriented

The manager typically gets into the act after innovative/ground-breaking initiatives by the entrepreneur.

Widely established lively and quit natural links between entrepreneur and research institution.

Banking service and advise less readily available and less professional lengthy and costly

Entrepreneurial attitude and behavior

When comparing Entrepreneurial attitude and behavior of a personal coming from or working in different sociocultural environments it is first of all important to differentiate between entrepreneurial and managerial functions as such and the entrepreneurial and managerial attitudes and behavior that are typically successful

in a given sociocultural environment and in the subsector under investigations here again the typification by entrepreneurial creative and administrative talents will be useful for identifying the entrepreneurial profiles best suited for given sociocultural environments.

Management principles

When comparing the application of management principle and instruments

researches usually distinguish between the technical or operational aspect of these

principle and instrument on the one hand and their social aspect on the other. The

social aspect of management comprises of personal attitudes motivation and

leader ship behavior.

The technical aspect of management principle and instrument are in general

invariable and valid for different sociocultural environment. Management

principle and instrument may have to be adapted to different social environment

( urban-rural, highlands –lowlands)

Human resource requirements

Assessing human resource needs, particularly

entreprenencurian or management requirements is very

important for small business because for them qualified

staff and workers are the main resources in contrast to

large industrial business which are typically characterized

by higher capital intensity.

Entrepreneurial attitude and behavior

When comparing Entrepreneurial attitude and behavior of a personal coming from

or working in different sociocultural environments it is first of all important to

differentiate between entrepreneurial and managerial functions as such and the

entrepreneurial and managerial attitudes and behavior that are typically successful

in a given sociocultural environment and in the subsector under investigations

here again the typification by entrepreneurial creative and administrative talents

will be useful for identifying the entrepreneurial profiles best suited for given

sociocultural environments.

Management principles

When comparing the application of management principle and

instruments researches usually distinguish between the technical or

operational aspect of these principle and instrument on the one hand

and their social aspect on the other.

The social aspect of management comprises of personal attitudes

motivation and leader ship behavior. The technical aspect of

management principle and instrument are in general invariable and

valid for different sociocultural environment.

. Management principle and instrument may have to be adapted to

different social environment ( urban-rural, highlands –lowlands)

Human resource requirements

Assessing human resource needs, particularly entreprenencurian or

management requirements is very important for small business

because for them qualified staff

and workers are the main resources in contrast to large industrial

business which are typically characterized by higher capital

intensity.

Key personal and manpower

The problem of availability of skilled workers can usually be solved

in time for example by making the subsector more attractive to

young people after primary and secondary school to assess the

availability of key personal and manpower population forecast data

are needed

The statistics should be differentiated by region and by age group.

Short term availability in most countries can be determined from

unemployment statics.

. Foreign personal

3. Foregin personal

When certain skills and foreign professional experience are required in

subsector it is the most likely for these to be acquired through employment

or training abroad it should be mentioned that person with higher

professional qualification and experience also belong to the group of

persons with entrepreneurial potential.

These enterprises are as experience shows the basis of the development of

the so called ”missing middle” in developing countries that is medium scale

enterprises that employ 20-100 people.