A Study on Entrepreneurship and its Presence in Hospitality Business Life

Dora Vajda Diploma in International Hotel and Tourism Management HTMi Switzerland

Introduction
The following paper is going to include a review of concepts, theories, models and existing empirical studies, covering the field of entrepreneurship. The main aim of the report is to give an overview about the selected segment of the business life, with special emphasize on the connections to the hospitality industry. Entrepreneurship as such is present in the history since centuries. The meaning of being an entrepreneur has changed during the years, this way an entrepreneur transformed from a person, who overtakes duties, into an instrument of change (Stokes and Wilson, 2002, pg.31). Nowadays there are entrepreneurs everywhere, thinking only about a few examples, such as Richard Branson, Bill Gates, Steve Jobs or Anita Roddick (Thompson and Martin, 2010).This research tries to discover the background of this phenomenon, find answers for general questions regarding entrepreneurship, and its focus is set on the topics relations towards the hospitality industry. The main body of this paper focuses on the explanation of a key model and two relating theories in context with the entrepreneurship. After the comparison of these sources, the author concentrates on the research, which has been already done on the topic. Online journal articles were used to explore different segments of the hospitality industry and compare their findings in order to give a general overview about the main topic and be able to find the research gaps where further research could be done.

Definition of entrepreneurship
Hitt et al. defines entrepreneurship in the following way: Entrepreneurship is the process by which individuals or groups identify and pursue entrepreneurial opportunities without being immediately

constrained by the resources they currently based on the literature, small organizations, which have good potential for further financial and economical process in the business life, by identifying the product or service gaps in the market, control. (Hitt et al., 2007, pg.393). Several authors (Johnson et al., 2011, Barringer and Ireland, 2010, Mariotti and Glackin, 2010, Darling et al., 2007, Hitt et al., 2007, Allen, 2012, Thompson and Martin, 2010) explain the definition by stating key characteristics both entrepreneur and entrepreneurial-led businesses. Those organizations, which have open-minded, creative leaders and employees and gain competitive advantage by developing new products and services before their competitors, can be seen as entrepreneurial businesses. Moreover, constant development, changes and high risk factor specify the typical features of such an organization. Generally the risk is caused by shortage in financial support for the business.

E-V-R congruence model

The first important model is the Environment-Values-Resources (E-V-R) congruence. The base is, that a company needs to find the perfect balance between the three main influencing factors: environment, resources and values.

These aspects can be also called the three Cs: customer expectations (standing for environment), competencies and capabilities (resources) and culture (values) (Thompson and Martin, 2010, pg.30), moreover they are bound together, and the organisations aim is to keep them in an ideal balance with the help of a strong business plan. The concept is also associated with the use of SWOT analysis; strength and weaknesses are a part of resources, while opportunities and threats are considered to have connection with the environment (Dransfield, 2001). In order to characterize an entrepreneurial business, the need for making high risk factor decisions has to be taken into consideration. This way the employees entrepreneurial mind-set (Hitt et al., 2007, pg.395) gets the required freedom to create new values in order to help the company in gaining competitive advantages on the market. (Thompson and Martin, 2010) In this case, the model needs to be changed to make it more suitable for the specialized situation: the three connecting aspects are competencies and capabilities (resources), windows of opportunity

(environment) and entrepreneurship (values) (Thompson and Martin, 2010, pg.410). In this context the model interprets a process instead of a status, which describes the way of the actual use of the above mentioned entrepreneurial mind-set with the help of the resources for the further development of the company.

Internal Innovations Theory

Concentrating more on the internal changes and influences in an organization, as Hitt et al. (2007) describes, that two types of development can be seen. The first type includes the incremental changes.

The other type of internal innovations is the so-called radical innovations. In contrast with the previous one, this type suits perfectly for an entrepreneurialled company by providing the above mentioned needed freedom of creating or developing a new product or service, which can be beneficial for the organization. Obviously this means higher risk, and has more significant effect, but at the same time ensure the vantage against the competitors. This kind of decisions, being revolutionary and non-linear in nature (Hitt et al., 2007, pg. 400) is most likely to lead the company to notable economic and financial growth.

Strategy structure theory

The main idea behind Mintzbergs theory (1989 cited Thompson and Martin, 2010) is that different organizations need different leading styles and business plans. These are built up from the four links, learning form the past, understanding the present, imagining the future and competing and innovating to stay ahead of rivals and seize new opportunities (Thompson and Martin, 2010, pg.46), but in various context, which is influenced by the type of the strategy and leadership style, owned by the organization. Based on these categories, both amongst the entrepreneurial businesses, two totally different implementations can be seen. In one case the organization bases its strategy mainly on its competiveness, supported equally by the learning, understanding and imagining parts. In contrast, an ambitious, entrepreneur-led business emphasizes the employees inventiveness and the competition and disregards the other two aspects.

Assuming the three above mentioned concepts and theories in connection with entrepreneurship, we can see how complex this phenomenon is. All of them is analysed in different context, starting form external determining factors, through the various classifications of the decisions, based on different theories. The first concept, in comparison with the following two, concentrates on the relationship between the entrepreneur and the environment and analyses their effect on each other. Nevertheless the theories study the structure of the entrepreneurial decisions, which can be seen also as a supplemental part of the previously mentioned model. They complete each other, and one gives deeper understanding to the others meaning, however only this information does not give an extensive overview in every aspects of entrepreneurship.

General studies on entrepreneurship

Both Jones et al. (2001) and Landstrm et al. (2012) state in their research, which were collecting data since the 1990s, that the field of entrepreneurship is not in an extended state yet and in order to fill out the research gaps, several more studies should be done in the following years. In their opinion, this would support the work of the next generation of researchers in this area. El Harbi et al.s (2011) study was conducted in 34 countries, which gives a general overview about their main aim, which was to identify whether entrepreneurship causes economic growth or it works the other way around. In their findings the relationship has been stated, as they identified, that in a short period, entrepreneurship could be useful in order to increase the GDP per capita, however it is not the most appropriate way in long terms.

Motivation and entrepreneurship Five key areas were discovered by Hornsby et al. (2002), which highly influence the middle level managers motivation to promote corporate entrepreneurship and inspire the employees to participate. The research was done in the USA and Canada, and states that the existence of those factors is crucial, and absolutely beneficial for the organization. Hospitality relatedly, the research, conducted by Brizek and Khan (2007) provides information about the connection between corporate entrepreneurship and an organizations human resources aspects in the casual dining area. The main focus of the study is on support of the management team, the remuneration and job satisfaction in intrapreneurial context. The authors came to the conclusion, that intrapreneurial strategies help the development of the above-mentioned factors and have positive effect on them.

Gender and entrepreneurship The Swedish study of Obschonka et al. (2013) concentrates on the relationship between the dysfunctional social behaviour in early ages and having an entrepreneurial career. The research found connections between male entrepreneurs antisocial behaviour and registered crime (Obschonka et al., 2013, pg.386) in their childhood, however only going against the rules did not really have enormous influence on any of the genders. Another study from Sweden puts the genetic and environmental influences in the spotlight by examining their effect on male and female people in connection with becoming an entrepreneur.

Obviously the findings are totally different regarding the two genders, but they provide further valuable information separately on both of them.

Entrepreneurship in the hospitality industry The study of Li, L. et al. (2009) compares the basics of corporate entrepreneurship in the manufacturing and hospitality industries. Surprisingly they have found more corresponding points, than differences and these results could encourage other researchers to conduct comparison studies not only generally on corporate entrepreneurship. More research was done in the fields of hotels and restaurants in this industry. Glancey and Pettigrew (1997) concentrated on the small hotel industry, examining the factors, which are influencing an individuals decision to become an entrepreneur. These aspects were motivation, age, gender, education, main aims and economics. Similarly, Ramos-Rodrgoues et al. (2012) focus also on the same topic, but in regards of the hotel and restaurant segment of the industry. In their point of view a young, female and middle or upper category household income person has the highest chance to become an entrepreneur.

Conclusion and Recommendations

As the economic and business world has changed, there became more and more space for entrepreneurship, which keeps this whole engine in progress, providing the constant changes, innovations for further development (Lee-Ross and Lashley, 2009). This paper presents an incomplete overview of the basics of entrepreneurship and review on the already existing research.

Special emphasize is in this study on the existence of entrepreneurship in the hospitality industry. There is a wide range of definitions available, several books are teaching the enthusiastic individuals how to become a successful entrepreneur, but this particular segment still has to be studied further in order to understand it completely, since it depends heavily on the individuals characteristics and personality. It can be said, that this phenomenon has an increasing importance in the tourism industry, nevertheless much less research has been done and those are also not really specific and detailed. The collection of studies shows that this is not a single case, other industries also need deeper investigation in this topic. On the other hand the existing research papers support each other and add on more information in terms of finding more details and complete the current aspects. Due the above-mentioned reasons, the author would like to recommend her study for further research. Several options have been identified which were not discovered and researched yet in terms of the tourism and hospitality industry. The aspects, in which the entrepreneurship has been already examined, could be all implemented in the hospitality environment. The cases can be made very specific by monitoring different continents, countries and cultures. On interest differentiation can be based on evaluating data from diverse age groups, gender and people from discrepant educational or salary level. The possibilities are limitless and these studies help the industry to understand the subject better and find the solutions for the occurring issues. The author recommends her work for the industry, hoping that it helps with recognising new opportunities, which are apparently present in other industries, and successfully implementing them into the hospitality businesses.

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