E4 - Davidkov - Mladenova - OfEL 2014

991

Main Characteristics of Entrepreneurs’ Work

Tzvetan Davidkov, Irena Mladenova

Faculty of Economics and Business Administration, Sofia University St. Kliment Ohridski,

Bulgaria

[email protected]

[email protected]

Abstract

There are enough reasons to study entrepreneurial work (by similarity and difference) in

reference to managerial work. Entrepreneur’s work could be defined in its essence as a

project-oriented work. There are many evidences in social research and practice that

entrepreneurship could be regarded as a learning process. A crucial aspect in characterizing

entrepreneurial activity is the central role of decision-making as part of entrepreneurial work.

The idea of entrepreneurial work as a communication process is an important element in

building a systematic notion of the features of entrepreneurship and entrepreneurial work.

Entrepreneurship is often associated with identifying favorable opportunities. Systematic

research of entrepreneurial work suggests the above mentioned characteristics should be

discussed in their unity. This paper focuses on the characteristics which enable to a large

extend the conceptualization of a relatively complete picture of entrepreneurs’ work based on

a review of existing research and literature on the topic. The level of understanding achieved

should be used as a prerequisite for deepening the systemic research of entrepreneurs’

characteristics and entrepreneurial activity and could be applied when formulating policies

and instruments (including educational and training programs and consultation services) in

support of current and future entrepreneurs and fostering entrepreneurship.

Keywords: Communication process, Decision making, Entrepreneurship, Identifying

opportunities, Learning process, Project-oriented work

1. Introduction

Entrepreneurs play a key role in the economic development, and entrepreneurship is

undoubtedly an important factor for economic growth and competitiveness and a major source

of job creation. In recent years, entrepreneurs and entrepreneurship attract significant attention

from both practitioners and researchers, but also policy makers. We are witnessing various

attempts many countries make to create appropriate environment for starting and doing

business, targeted efforts to attract entrepreneurs (besides supporting local ones), a variety of

financial, tax and other incentives with the aim of enhancing competitiveness of the economy.

Entrepreneurship increasingly appears amongst governments’ priorities corresponding to the

reinforcing belief that it can become a competitive advantage in the global competition.

Evaluation of different financial stimuli and training programs’ effectiveness, and thus

reviewing and improving policies to foster entrepreneurship, though, require better

understanding of what entrepreneurship is, who is an entrepreneurs and what an entrepreneur

does. Understanding entrepreneurial work can significantly help target better training

programs as well as other forms of assistance such as consultation, educational modules etc.

This paper focuses on the characteristics which enable to a large extend the conceptualization

of a relatively complete picture of entrepreneurs’ work based on a review of existing research

mailto:[email protected]

mailto:[email protected]

Proceedings of the 2nd

International OFEL Conference on Governance, Management and Entrepreneurship, 4th

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and literature on the topic. The difficulty in building such a relatively complete picture lays in

two groups of factors: (1) the controversial nature of entrepreneurs, and (2) the dynamics of

entrepreneurial activity. Despite this dynamics and relative uncertainty, there are recurrent,

typical characteristics of entrepreneurial work.

The authors argue that there are enough reasons to study the similarities and differences of

entrepreneurial work with reference to managerial work. Entrepreneurial work can be defined

in its essence as a project-oriented work. There are many evidences in social research and

practice that entrepreneurship could be regarded as a learning process. A crucial aspect in

characterizing entrepreneurial activity is the central role of decision-making as part of

entrepreneurial work. The idea of entrepreneurial work as a communication process is an

important element in building a systematic notion of the features of entrepreneurship and

entrepreneurial work. The ability to identify new, favorable opportunities is seen by many

authors as basic for entrepreneurship.

Systematic research of entrepreneurial work suggests the above mentioned characteristics

should be discussed in their unity. The level of understanding achieved should be used as a

prerequisite for deepening the systemic research of entrepreneurs’ characteristics and

entrepreneurial activity and could be used when formulating policies and instruments

(including educational and training programs and consultation services) in support of

entrepreneurship.

2. Background

Fostering entrepreneurship is increasingly becoming one of the key aspects of economic

policies in many countries. Schools, universities, and numerous training centers design

educational and training programs and courses with differing scope often supported by

governments. Their aim is to teach the necessary skills and knowledge to wanna-be

entrepreneurs. This brings us to one of the major questions – to what extent entrepreneurship

is a matter of gifts or it could be learned. Literature does not provide a definitive answer.

There seems to be a consensus amongst entrepreneurship researchers in doubting the

possibility to create a theory of entrepreneurship with high level of general validity.

Comparisons of different notions of “what is entrepreneurship” and “who is an entrepreneur”

usually come up with both common, overlapping characteristics and discrepancies (sometimes

substantive).

This makes the task of fostering entrepreneurship even more difficult. If we cannot reach a

consensus on what makes an entrepreneur, how could we encourage entrepreneurship? And if

policy makers recognize the role of entrepreneurs for creating prosperity, what are the right

incentives – or, what is the right mix of incentives to set the grounds for an entrepreneurial

economy. Supporting entrepreneurs – as part of governmental policies – is often seen as a

source of (self-) employment, but also as a means to foster innovation and economic

prosperity.

When exploring this issue on regional level, the European Commission gives us a good

example of attempting targeted instruments to support entrepreneurship in member states. The

European Union financial framework increasingly focuses on supporting small and medium

sized enterprises (SME), including via various financial instruments, training programs,

internationalization, innovation etc. On member states’ level, diversity widens as governments

attempt to take into consideration specifics of their development, culture, past experiences and



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achievements. Evaluation of different financial stimuli and training programs’ effectiveness,

though, requires better understanding of what entrepreneurship is, who is an entrepreneurs

and what an entrepreneur does. Understanding entrepreneurial work can significantly help

target better (training) programs and other forms of assistance.

Notions of entrepreneurial work are derived from the more general concepts of

entrepreneurship and entrepreneurs. There seems to be a consensus amongst entrepreneurship

researchers in doubting the possibility to create a theory of entrepreneurship with high level of

general validity. Comparisons of different notions of “what is entrepreneurship” and “who is

an entrepreneur” usually come up with both common, overlapping characteristics and

discrepancies (sometimes substantive). One of the obstacles to creating a common

(comprehensive and largely accepted) entrepreneurship theory lies in the widespread

approach to definitions which are centered around a distinct characteristic (regarded as

crucial) or a limited set of characteristics. In some instances entrepreneurship is discussed via

exclusive categories – pointing at what entrepreneurship is not1.

Differences could also be found in the analysis assumptions. Generally, attempts to define

entrepreneurship aim to show what makes an entrepreneur different (and distinct) in the

context of economic activity. Less often attempts to comprehend entrepreneurship seek to

highlight commonalities between entrepreneurs and non-entrepreneurs, while distinctions are

interpreted mainly as levels of manifestation of certain traits or actions2.

This uncertainty is reflected in the fact that entrepreneur and entrepreneurship are considered

and used in both broad and narrow sense.

Discussion on entrepreneurship has at least several aspects that are often not clearly

distinguished. Partly that is a terminological issue: what we mean by entrepreneurship and

entrepreneur (or – which term we use to denote specific aspects of economic agents behavior).

Another dimension of this discussion refers to a certain tradition in using these terms, i.e.

some authors (might) refer to a different tradition in the notion of entrepreneurship (Koev,

2006), (Gladicheva, 1995). A third dimension relates to the way this terminology (and

respective semantic nuances) is updated and/or transferred from one language into another3.

This paper focuses on those characteristics of entrepreneurship and entrepreneurs that best

enable the creation of a relatively complete picture of entrepreneurial work. The difficulties in

creating a relatively complete picture of entrepreneurial work are associated with two main

groups of reasons.

The first refers to the controversial nature of entrepreneurs. Drucker argues that Say’s

understanding of entrepreneurships sounds like a manifesto and a declaration of the

1 For example Cantillon (1725) defines entrepreneur as a person who takes risks different from those taken by

capital owners. Walker (1876) - an entrepreneur differs from those who provide funds and receive rent.

Schumpeter (1934) - entrepreneurship is its essence doing things which normal routine business activity

excludes. (source: Development of Views on Entrepreneurship. 2006 – in Bulgarian) 2 Entrepreneurs are neither ‘perfect’ nor ‘good’ in some metaphysical sense. They owe their achievements only

to the fact they perform better that the others (Mises, 1952). What allows for the existence of profit is the fact

that an entrepreneur has assessed the future prices of a product better than the others and has managed to obtain

the factors of production at lower (in view of the future state of the market) prices (ibid) 3 Bulgaria gives abundant examples over the past 15-20 years of broad and rather arbitrary use of the terms

entrepreneur and entrepreneurship.



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controversial nature of entrepreneurs who transform and disorganize; according to

Schumpeter the entrepreneur’s role is “creative destruction.” (Drucker, 1992)

The second one lies in the dynamics of entrepreneurial activity. “The activity of an

entrepreneur is extremely dynamic and that is why it is hard to be categorized.” (Libert, 1996)

3. Main focus of the study

Despite this dynamics and relative uncertainty, there are recurrent, typical characteristics of

entrepreneurial work. Entrepreneurial work can be studied in reference to managerial work.

Attention should be paid to the fact that entrepreneurial work is largely project-oriented work.

A fundamental characteristic of entrepreneurial activity is decision-taking. Entrepreneurship

(necessarily) is a learning process. Another important characteristic of entrepreneurial activity

is revealed by the notion that it is a communication process. The entrepreneurial work is

associated with identifying – and exploring – new opportunities.

Each of these viewpoints sets a direction of discussing entrepreneurial work “in the category

of…” which, in turn, constructs a conceptual apparatus for understanding and interpreting

value aspects of entrepreneurial work.

3.1 Entrepreneurial work and managerial work

There are enough reasons to study entrepreneurial work (by similarity and difference) in

reference to managerial work. Both a manager and an entrepreneur are organizing production,

and in some instances “the owner-entrepreneur is also the manager of the organization”

(Koev, 2006).

While describing the managerial work, a long list of specialized activities could be drawn;

together these give an idea of its substance. (Davidkov, 2006)4 – Figure 1.

4 See also Bankova, 1993; Bankova, 2004 – sources in Bulgarian



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Assigns tasks

Builds (and develops)

organizational culture

Builds work teams

Communicates (interacts

with…)

Coordinates work of own

unit with other units

Creates (and maintains)

performance standards

Delegates Distributes (organizational

resources, roles, tasks)

Evaluates employees

performance

Executes orders, tasks

Exercises powers – rights,

obligations, responsibilities,

authority

Forecasts (predicts future) Gives orders

Hires / fires employees

Holds meeting Identifies opportunities Identifies problems

“Imagines the future” of the

organization (mission,

vision, ..strategy, ..)

Improves management

system

Informs (superiors about…;

subordinates about…;

oneself about…)

Maintains appropriate

organizational climate

Manages Motivates employees to

deliver

Negotiates / makes

agreements

Organizes (implementation

of decisions; collaboration)

Plans (prepares plans)

Regulates relationships Represents own unit Rewards / punishes

Sets targets Solves (problems; makes

decisions, organizes

decision-making)

Structures organizational

activities

Studies various pieces of

information

Supervises subordinates’

work

Trains (and develops)

subordinates

Utilizes opportunities

Figure 1: Substance of managerial work – alphabetical list of actions describing what

managers do

This “alphabetical” diversity could be reduced to four basic groups of functions related to

strategy and planning, organizing, managing and controlling (Appleby, 1991).

Many definitions of entrepreneurship and entrepreneurs point at the managerial aspect of

entrepreneurial work.



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According to Beaudeau (1797) an entrepreneur is the person who takes the risk to plan,

control, supervise, organize and own5. Francis A. Walker (1876) calls an entrepreneur the

person who obtains profit because of one’s managerial skills. For Ely and Hess (1937), an

entrepreneurs is the person, or group of persons, who take on the task and responsibility for

combining factors of production into a single business organization and supporting the

activity of this organization…the entrepreneur commands the productive forces and the

responsibility for their success or failure lays upon him. Brockhaus (1980) defines an

entrepreneur as one who is a major owner and manager of a business venture and is not

employed elsewhere. “In the production process, the capitalist, the entrepreneur takes over the

responsibility for expanded reproduction of production’s objective factor – the means of

production…The relative weight of this new type of work – entrepreneurship, within the

managerial work is increasing” (Naydenov, 2003). Here, entrepreneurship is viewed as

managerial work.

Mises points to the fact that the entrepreneur predicts the future state of the market and based

on that takes decisions. It is the entrepreneur’s decision that makes possible both profit and

loss6 (Mises, 1952).

Commenting on “entrepreneurial traps” Drucker argues that some of the growth problems of

entrepreneurial business come from the entrepreneurs’ attitude to planning and from

overshooting their managerial abilities7 (Drucker, 2006). In Innovation and Entrepreneurship

(1992), Drucker in fact treats innovation and entrepreneurship as part of managerial activity.

Noting that each manager does a number of activities that cannot be classified as

management, Drucker views the following activities as inherent to a manager: setting

objectives, organizing, motivating and communicating, establishing a set of criteria for

assessing performance, developing people (Drucker, 2001).

Woodcock and Francis (Woodcock & Francis, 1991) justify the argument that in order to

succeed, a manager should have good skills in the following areas: ability to manage oneself,

have clear personal values and goals, be able to deal with problems, be creative, be able to

influence others, be visionary, be a good mentor to subordinates, be able to train and develop

effective teams.

3.2 Entrepreneurial work as project-oriented work

Entrepreneurial work can be characterized in its substance as a project-oriented activity.

General logic of this statement is presented on Figure 2.

5 Source: Development of Views on Entrepreneurship. 2006 – in Bulgarian

6 Here we refer to anticipation and entrepreneurial decision to demonstrate that entrepreneurial work shares

significant similarities with managerial work. Decision-taking relates to another important characteristic –

learning and discovering. As long as the quality of decisions impacts the success of entrepreneurial projects,

though, we put focus on it as an independent characteristic. 7 The planning problem appears when a new product turns successful but not according to plans. Entrepreneurs

usually cannot accept this unexpected success, because “it is not what they planned” (Drucker, 2006). The

overshooting problem goes along with fast growth of business – at the beginning, an entrepreneur managed

everything alone, but after reaching certain scale it is no longer possible (Drucker, 2006; Djonev, 2004)



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Activities that are new

(less structured) are

usually structured as

projects because project

organization improves the

chances for success of such

ventures

Entrepreneurial activity (almost

with no exceptions) has novelty

(and risk) aspects; entrepreneurs are

highly interested in the success of

the venture – they strive to achieve

their goals in a cost-effective

manner

That is why

entrepreneurs mainly

choose project-

oriented

organization of their

activities

Figure 2: Entrepreneurial work as project-oriented work

Project-oriented organization’s relevance and widening popularity come from realizing that

there are differences in doing routine (well-structured) work and performing more innovative

tasks. In the first case participants in the work process possess experience, skills, know-how

that enable them to successfully cope with the task. In the second case such experience, skills,

know-how are lacking. Organizations normally perform tasks of both types. When these two

types of tasks are equally treated (not distinguished) the chances innovative tasks to be

performed well are diminishing; such tasks become “one of many”. There is a risk not to

achieve the expected results.

The chance that a task will be executed accordingly increases when it is distinguished

(detached from others) and becomes an object of special attention. The project approach

provides such an opportunity – to separate a task and execute it as a project. This

differentiation suggests clear definition of goals and objectives, technological requirements,

action plan (actors, activities, timeframe), necessary resources (financial, material,

information, time etc.), rules and mechanisms of cooperation, tracking of progress,

sustainability of results and so on. It is important to highlight potential risks and approach to

their minimization. The project team, including members and manager (with their roles,

responsibilities, remuneration when achieving success), is key to success of the venture.

Good use of project-oriented structuring of activities creates opportunities to achieve desired

results. This is due to the following circumstances:

Tasks are differentiated and object of separate attention

Goals/results are easier to define

Choice of strategy for realizing the project is based on analysis and comparison of

alternatives

Necessary specific activities are defined in a clear and comprehensive manner

Technological requirements and restrictions are easier to identify

There is a well-structured action plan8

Project team members are selected based on the requirements of specific tasks

Potential risks are studied, and approaches to minimize them are developed

Resources for project activities are secured

Project elements are linked within the whole project

Project management system is specific and separate9

The common denominator of the above characteristics of project-oriented activities is its clear

8 One of the important issues in project management refers to “project lifecycle” highlighting main preparation

phases, resources etc. (Aleksandrova, 2005; Burton & Michael, 1999 – in Bulgarian). 9 The above mentioned characteristics could be attributed to non-project activities. They are of different quality

and status at the project organization, though.



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goal orientation. Project organization contributes significantly to achieving desired goals in a

more effective and efficient way.

Characterizing entrepreneurial work as project-oriented activity is based on the fact that (with

few exceptions) entrepreneurial activity is poorly structured. It is often innovative, as many

definitions of entrepreneurship affirm. Different “entrepreneurial success models” point at the

clear goal orientation of entrepreneurial activity10

(Figure 3). This is often derived from the

entrepreneur’s interest especially when ownership allows for direct decision-taking

involvement.

Model 111

Model 212

Model 313

(Need of)

Goals,

achievements

High need of

achievements.

Pursues high

and attractive

goals

Sets one’s

goals (believes

one is

responsible for

own destiny)

Clarifies for oneself what one wants to

do

Strong

motivation /

determination /

purposefulness

Belief in

“compensation”.

Monetary

remuneration is

appreciated as

evidence of

competence

‒ No hesitation when pursuing one’s

goal, demonstrates persistence and

determination

‒ Decisive – can quickly summarize

the situation, formulate alternatives

for action, select the most

appropriate and clarify to

subordinates what needs to be done

‒ Ready to discuss how to execute a

task; listens and takes advice. Sticks

to announced course of action

(unless the situation calls for change

in the direction)

Figure 3: Why project orientation is inherent to entrepreneurial behavior

3.3 Entrepreneurial work as a learning process

Entrepreneurial work can be characterized in its substance as a learning process. This notion

is derived both from direct statements14

and analysis of entrepreneurship and entrepreneurial

activity.15

Mises defends the principle of “subjectivism” and thus “meaning becomes central theme of

economic theorizing.” (Lavoy, 1994) According to Mises the fact that an entrepreneur who

estimates future prices of goods or services better that the others and thus manages to buy

some factors of production at lower prices (in view of the future state of the market) allows

for realizing profit (Mises, 1952). Entrepreneurial activity consists of making decisions. An

10

Noveli & Tullar (1988) for example summarize different views on the entrepreneur’s personality. They note

the need of successes, enthusiasm etc. Drucker observes that entrepreneurs set high goals and are not satisfied by

what already exists; they aim to create new values ad new ways of satisfying needs (Drucker, 1992) 11

Source is not known to the authors. 12

Armstrong, 1993 13

Armstrong, 1993 14

We envisage mostly statements of Mises, Hayek, Kirtzner, Lavoy, Drucker etc. 15

Distinguishing cognitive aspect of entrepreneurial work is based on authors such as: Mises, Hayek, Kirtzner,

Lavoy, Drucker, Libert, Koev, Gladicheva, etc.



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entrepreneur decides how to employ factors of production16

in response to the scarcity of

capital. It is the decision of an entrepreneur that leads to profit or loss; profit is creation of

human mind, of successful forecasting of future state of markets, it is a spiritual and

intellectual phenomenon17

.

Hayek argues that “data” on which the economic system bases calculations are not given to

“one human mind” for the whole society…and never will be. Knowledge about circumstances

which we need to use never exists in an integrated form but solely as dispersed pieces of

incomplete and often contradictory knowledge possessed by all individuals (Hayek, 1945).

This raises the issue of using knowledge which is not given to anyone in its entirety; the

solution comes via the system of prices where all the information necessary for taking rational

decisions is collected by one person on the spot. Market is the only system which allows for

collecting, analyzing and using such knowledge. According to Nenovski (Nenovski, 2004)

ownership and own interest drive people to look for knowledge, and take good (working)

decisions.

Bogdanov and Stoev (Bogdanov & Stoev, 2006) also adhere to the view of entrepreneurship

as a learning / discovery process. In order to follow its most important function – taking

decisions in an uncertain environment with incomplete information – the main role of an

entrepreneur is “to discover new knowledge which brings profit to him/her and more value to

consumers” (ibid). “Competition amongst entrepreneurs is a race for new knowledge which

gives (at least temporary) market advantage.” (ibid) Bogdanov and Stoev add another

important perspective to entrepreneurial behavior – the game aspect. Entrepreneurial

decisions require taking into account other market players’ behavior. Thus, expectations about

the behavior of others (forecasts, anticipation) influence an entrepreneur’s behavior and

choices.

Figure 4. provides an alphabetical list of entrepreneurial activity’s elements that point to its

cognitive aspects.

16

…and every other activity of an entrepreneur is a coincidental addition to his main function (ibid) 17

Source: Development of Views on Entrepreneurship. 2006 – in Bulgarian



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Analyses… Anticipates… Assesses… ..is Awaken for

(is alert)

Believes (does

not believe) in…

Checks… Clarifies… Comprehends… Conceptualizes

…

Creates…

Decides… Designs… Destructs

(destroys

creatively)

Discovers Doubts…

Experiments… Explores… …has Eyes

for…

Feels… Finds…

Follows… Forecasts… …generates,

develops,

assesses Ideas

Identifies… …has (creative)

Imagination

…gets Informed

about…

…demonstrates

Ingenuity

…demonstrates

Insight

Interprets… …collects

Knowledge

Knows… Learns… Listens to… Looks for… Measures…

Notices… Observes… Participates (in

conversations)

Perceives… …looks for /

creates / changes

Perspective…

…gets to the

Point

Problematizes

…

Rationalizes… …gives (own)

Reading (of a

situation)…

Realizes…

Researches… Responds to… Re-thinks… Reveals… Sees…

…does not

believe in Self-

evident

…has Senses

for…

Separates

(divides,

abstracts…)

…bears creative

Spirit

Studies…

…follows the

Symptoms of…

Systematizes… …keeps Track

of…

Understands… …gets Updated

(self-updated)

Figure 4: Entrepreneurial activity as a learning process – alphabetical list of actions

describing what entrepreneurs do

Some of the terms in Figure 4 directly indicate different levels and forms of cognitive activity

(e.g. knows, studies, analyzes) while others point at psychic phenomena and specifics (such as

alertness, ingenuity, doubt). Other groups focus on characteristics of cognitive process as a

research procedure (problematizes, experiments) and creativity (creates, designs). A separate

group of characteristics refers to entrepreneur’s ability to assess, assign (subjective) value.

Yet another group encompasses decision-taking procedures (forecasts, anticipates, decides).

Learning as a characteristic of entrepreneurial activity responds to specific requirements of

entrepreneurial process. Decision-taking requires updated and reliable future-oriented

knowledge. Updated and reliable knowledge gives entrepreneurs competitive advantages18

; it

is a tool to plan better and stay alert to new opportunities.

18

Entrepreneurship is a quest for new knowledge (Bogdanov & Stoev, 2006).



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3.4 Entrepreneurial work as a decision-taking process

Entrepreneurship is a process of taking decisions (and organizing for their execution). Based

on this important aspect of entrepreneurial activity it is compared to managerial work and

viewed as a learning process. As long as the decision-taking function is central when

characterizing entrepreneurial activity, it needs to be distinguished.

Drucker regards the ability to take decisions as a quality that distinguishes substantively

entrepreneurs and non-entrepreneurs. He argues that all occupations demand for taking

decisions and in its nature each decision is associated with uncertainty. Everyone with the

ability to take decisions could learn how to be an entrepreneur and behave like one. Therefore,

entrepreneurship is rather behavior than a personal trait. (Drucker, 1992) Drucker also points

that people who feel the need for security cannot become entrepreneurs (ibid).

According to Mises decision-taking (incl. choice) is the only entrepreneurial activity.

Entrepreneurial activity consists of taking decisions. The entrepreneur decides how to employ

factors of production; all other activities he/she does are coincidental additions to his/her main

function. (Mises, 1952)19

. Entrepreneurial decisions create profit or loss; capital does not –

investment goods are dead objects and do not give birth to anything on their own.

Hayek interprets entrepreneurial decision in the context of two general questions – planning

(centralized or decentralized) and dispersed knowledge. Market prices address these issues.

An entrepreneur is not interested in the reasons behind certain prices; it is enough that “there

is one price for each commodity” and this is the solution he looks for. (Hayek, 1945)

Bogdanov and Stoev also highlight the central role of decision-taking in the entrepreneurial

process. Taking decisions in an uncertain environment with incomplete information is “…

maybe the most important function of entrepreneurs…” (Bogdanov & Stoev, 2006)

However, as far as decision-taking (incl. choice) could refer to the most complex logic-

constructive activities, there are many related phenomena that need to be taken into account in

its systematic characterization.

Entrepreneur’s attitude to ownership is of primary importance.20

It defines the limits of

competence when taking decisions, the nature of responsibilities an entrepreneur has. Attitude

to ownership determines one’s interest (as an objective relationship and its comprehension

and interpretation). This interest is manifested in the goals of entrepreneurial activity.

When studying decision-taking process as an element of entrepreneurial activity, important

landmarks could include: behavioral characteristics in single-person and group decision-

taking, degrees of autonomy when making entrepreneurial choices, specifics and levels of

competence. Other important aspects include: expectations and motivation of the

entrepreneur, ways of controlling risk and their application in the decision-taking process21

etc. Personal traits also define scale and characteristics of subjective comprehension of reality,

perception parameters, interpretation and understanding of a situation.

19

Source: Development of Views on Entrepreneurship. 2006 20

Entrepreneur’s attitude to ownership is important in at least two perspectives. Firstly, many authors include

this in the very definition of an entrepreneur. Secondly, because of the fundamental character of the ownership

relationships and the nature of entrepreneurial behavior – good keeping, pursuit of new knowledge, freedom to

make decisions, minimization of risk, etc. 21

See also Aleksandrova-Boshnakova, 2002; Aleksandrova, 2002



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3.5 Entrepreneurial work as a communication process

Entrepreneurial process could be described in its substance as a communication process. This

is possible in at least two aspects:

A narrower aspect views communication as information exchange. Thus, an

entrepreneur plays one of the following roles: source, recipient or intermediary in the

process of transmission / transfer / reception of information (ideas, opinions, beliefs,

etc.). We should note also the aspects of coding and decoding (of meaning) –

(Davidkov, 2006)

A broader aspect is based on understanding communication as an attribute of

organized human communities, a mechanism for these communities to achieve

integrity.22

This allows us to surpass the mere information-exchange notion and

explore entrepreneurial activity as a process of conducting a communication process.

These two aspects could be combined as they stress on different sides of entrepreneurial

activity.

Mises’ various arguments point at the wider aspect of entrepreneurship as a communication

process. Entrepreneurs are unconditionally and completely responding to the power of

consumers (Mises, 1952)23

. This refers to the relationship consumer-entrepreneur. In order to

produce the goods consumers need in the best possible way, an entrepreneur has to assess

future prices of a product more accurately than others (ibid) – this refers also to the

relationship entrepreneur-competitors. An entrepreneur is a market player, he/she acquires

factors of production and then sells his products on the market – this refers to the relationship

entrepreneur-market players.

Hayek describes communication nature of entrepreneurial process in relation to the famous

question of using knowledge in the society (Hayek, 1945). Knowledge about circumstances

(at given time and place) is unique and available only to a certain individual (or a small group

of individuals); the mechanism entrepreneurs use to collect necessary knowledge is provided

by the market and its system of prices. As part of this process, entrepreneurs need to interact /

communicate constantly.24

Kirtzner notes alertness is a significant characteristic of entrepreneurs (Lavoy, 1994).

Alertness enables an entrepreneur to see (assign value to) things others do not. Lavoy

interprets alertness as a higher degree of sensibility to what others are looking for (ibid).

Successful entrepreneurs are not much different from the others – on the contrary, they are

typical for their culture. What makes them able to sense what customers will want is not a

kind of mysterious alertness that is “turned on” but rather their ability to read the

conversations of mankind; they understand the meaning… (ibid). A good supplier of

consumer goods listens to customers’ conversations; feels what would be accepted / or

rejected as attractive and is therefore more convincing in one’s pursue to force them to try

new products.

22

Communication can be interpreted as a human activity. With this approach, the terminology used includes

subject and object of the activity, needs, interests, motives, goals, values, norms, roles, expectations, claims, etc.

(Davidkov, 2002) 23

Source: Development of Views on Entrepreneurship. 2006 24

Similar interpretation of Hayek views on entrepreneurial process is made by Gladicheva: “Market process is

an continuous dynamic communication process by which market participants exchange information embedded in

the prices.” (Gladicheva, 1995)



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According to Lavoy exchange’s evolution in the direction of today’s market is a cultural one

based on a conversation process. Today, the market is still a conversation process where

participants can use not only spoken and written words, but also prices, advertisement, stock

exchange and other means of communication.

Summarizing various views on entrepreneurs and entrepreneurship, Gladicheva concludes

that “Entrepreneurship is a complex communication process” and “The entrepreneur is a

crucial intermediary in this communication.” (Gladicheva, 1995) The entrepreneur is an

important intermediary because he is “alert”, “knowledgeable” discoverer; can “read” others’

minds. (ibid) Lavoy’s entrepreneur is “most of all a communicator and an interpreter of

conversations.” (Gladicheva, 1995)

When referring to entrepreneurship as a communication process, it is important to note that

entrepreneurs do not participate in the communication only through “speaking” or “listening”.

There is a communication aspect in every single act and element of entrepreneurial behavior.

As long as entrepreneurial behavior can be interpreted through the lenses of a set of

economic, social, cultural and other roles, it is possible to assign to each entrepreneurial role

certain communication aspects.25

3.6 Entrepreneurial work and the ability to identify new opportunities

Identifying new (favorable) opportunities is a characteristic of entrepreneurial work; it is often

seen as basic of what entrepreneurs do. Seeing opportunities where others do not is what

characterizes, distinguishes an entrepreneur.

This notion could be tracked back to Say according to whom the entrepreneur shifts economic

resources from areas with low to areas with high productivity and profits. That is, an

entrepreneur – seeking higher earnings – needs to discover and identify opportunities which

will enable him to reach these. He discovers (or creates) new opportunities that are associated

with higher productivity and profits.

The entrepreneur’s capacity to identify new opportunities could be interpreted in the context

of the relationship between entrepreneurship and innovation.

Drucker argues that entrepreneurs find change normal and healthy. Usually they do not make

the change. But – and this is specific – the entrepreneur is the one who always seeks for

change, responds to it and takes advantage of it. Drucker underlines that entrepreneurs need to

search purposefully sources of innovation, of changes and their symptoms that reveal

opportunities for successful innovation. (Drucker, 1992).

The process of discovery is associated with the process of learning, the ability to converge,

synthesize, combine and thus apply new knowledge to formulating novelties (new ways of

doing things, new products etc.) This novelty could be interpreted in different ways depending

on the environment factors. According to Koev (Koev, 2007) the factors that can impact the

way we interpret novelties include: degree of competitiveness, alertness of entrepreneur and

overcoming uncertainty.

4. Discussion of results

25

This refers to the idea that within the repertoire of roles of an individual, there could be distinguished also

communication roles – as part of every other role or as a separate class of roles.



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Six characteristics of entrepreneurial work have been discussed in this paper. Each of these

could be interpreted in the context of practical application when designing programs to

support entrepreneurship. It is important to note that this is not an exhaustive list. Neither it is

exclusive – many of the characteristics could be derived from, or explored in the context of,

others.

Entrepreneurial work and managerial work. Research gives us enough confidence to argue

that thinking about entrepreneurs frequently draws attention to managerial aspects of

entrepreneurial work. Thus, knowledge about specifics of managerial work could be used

when creating a more complete understanding of entrepreneurial work.

Value of project-oriented characteristics of entrepreneurial activity lays in the fact that each

such characteristic could be regarded as a factor of entrepreneurial success. Project

organization ensures completeness and integrity of entrepreneurial task, and purposefulness

leading to its accomplishment. Project organization is appropriate when implementing

innovative activities and allows for efficiency and efficacy, enables structuring and managing

interconnected tasks.

Entrepreneurial activity is also a learning process. Purposeful modality of entrepreneurial

learning could be apprehended in the context of general and more specific entrepreneurial

goals and objectives. The general entrepreneurial goal is realizing profit while specific

objectives could be interpreted as ensuring specific entrepreneurial projects’ success.

Entrepreneurs learn to serve their practical needs; their learning is problem-oriented, aimed at

solving problems, and not “learning per se”. By learning, entrepreneurs support their decision-

taking process. Learning’s most valuable characteristic relates to anticipating future state of

markets and reducing uncertainty.

Entrepreneurial work can be regarded as a decision-taking process. The reasons for that are

manifold. Entrepreneurial success depends on the quality of entrepreneurial decisions (and the

ability to implement them). Assuming Drucker’s assertion that taking decisions is what

differentiates entrepreneurs and non-entrepreneurs, this ability becomes a separate

characteristic as it demonstrates belonging to a desired social group. Entrepreneurial decisions

are a valuable evidence of their capability to deal with uncertainty and risk.

Discussing entrepreneurial work through the lenses of its communication nature suggests

situating an entrepreneur into different types of relationships: interpersonal, group, individual-

group, inter-institutional, cross-cultural, market, organizational and managerial, etc. Partners

in the communication process – as well as own participation – could be assessed and

interpreted in a variety of contexts.

Entrepreneurial activity as a process of – and ability to – identifying new opportunities

suggests skills to interpret and apply learning results in new ways. New opportunities relate to

innovation. Entrepreneurs are those who are able to see “through different lenses”, apply new

knowledge, find what others cannot in their pursue of entrepreneurial goals.

Essential relationships and links can be identified amongst the above six characteristics of

entrepreneurial work. Although these characteristics are discussed separately, within the

entrepreneurial activity this separation is rather conditional. That is because when carrying out

the same entrepreneurial activity different aspects of it can be outlined with reference to one

or more of the above characteristics. Purposeful collection of information, for example, can be



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viewed as part of the learning process – but at the same time it is part of the decision-taking

process. Decision-taking in itself is part of what management consists of.

Despite this conditionality in separating these characteristics as aspects of entrepreneurial

activity, the various contents of entrepreneurial work allow for distinguishing areas of activity

where certain characteristics stand out. Such distinction is possible only when considering

entrepreneurial activities an entrepreneur performs alone and those he/she performs in

cooperation with others.

5. Conclusion

This paper discusses six characteristics of entrepreneurial work in an effort to provide input to

the conceptualization of a relatively complete picture of entrepreneurs’ activities. These

characteristics do not represent an exhaustive – or exclusive – list of what entrepreneurs do.

These characteristics suggest practical skills and capabilities and rather refer to the concept of

“entrepreneurship as a practice” than “entrepreneurship as a set of personal traits, gifts”.

Discussing entrepreneurship as “a practice” points at the need of practical skills and

knowledge that could help an entrepreneur be more successful. Such practical skills could be

learned and developed.

It is necessary to distinguish the requirements for practical (training) entrepreneurship

programs depending on the audience. For some (of economic background, for example, or

high-school students) the most popular topics included in entrepreneurship training programs,

such as how to register a new business, finance and accounting, marketing, etc. might not be

adequate (might not add much value). These topics however would be much more appreciated

by experienced people with a zest for venturing (entrepreneurship competences) but little

economic or business background. Training programs target different audiences and this

would impact their focus on building competences and/or providing practical information on

how markets (and businesses) work.

Understanding entrepreneurial work and the characteristics that distinguish it from other

human activity could be helpful when assessing the need of – and designing – policies to

support entrepreneurs. These could be especially useful in structuring educational and training

programs as well as a plethora of other programs supporting current and wanna-be

entrepreneurs.

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