ENTREPRENEURSHIP AND INGVAR KAMPRAD
As the world’s economy is developing, people become more encouraged to be an entrepreneur. While this is the case, we need to understand “who is an entrepreneur?” and “what is the entrepreneurship?” In dictionaries, the definition of entrepreneurship is the process of designing, starting, and running a new business and the definition of entrepreneur is that entrepreneur is a person who is able to organize and manage any enterprise by taking risks. But the meanings of these notions are very deep in real life. To underline these deep meanings, lots of theories are developed. In this paper, I am going to talk about some of these theories as a first, then I will mention about Ingvar Kamprad who is the founder of IKEA as one of the most successful entrepreneur on the world by connecting with theories that I will mention below and I will give the reasons behind his success.
First of all, I am going to talk about traits of an entrepreneur. To make analyzing the traits of entrepreneur easy, we put these traits into four main categories which are personal characteristics, interpersonal skills, critical and creative thinking skills, and practical skills. First, we will look at personal skills. Off course, there are lots of personal characteristics but I will touch on a few of them. As a beginning, an entrepreneur must have vision. They must be able to see big picture and need to see where things can be improved. Then, they should be a person who likes to control others. They should be motivated to lead others even if entrepreneurship and leadership are different things. Next, an entrepreneur is self-motivated and energetic because they should be ready for working hard and for a long time. The last one is that they should have risk tolerance which means that they are able to take risk and can take decisions where there is uncertainty. Another trait category is interpersonal skills. To be a successful entrepreneur, he or she must build great relationship with team members, customers, shareholders etc. People can improve these skills by some training. Interpersonal skills include such a thing like communication skill, listening etc. I want to mention about these things. First, they must have well communication skills because they need to tell their vision to investors, team members etc. Then, an entrepreneur must be able to motivate and lead others to follow his or her and to deliver his or her vision. Otherwise, his or her vision or idea cannot reach to desired point. Next, they must listen others. They need to hear what others are telling. Another one is that an entrepreneur must be emotionally intelligent. If they have higher emotionally intelligent, working with others will become easier for them. Then, an entrepreneur must be a good negotiator. Not only they need to negotiate prices, they also must be able to solve conflicts among people in a positive way. The last one is that an entrepreneur must deal with people based on fairness, truthfulness, integrity, and respect. In short, they need to lead ethically. Critical and creative thinking skills was another trait category. An entrepreneur must come up with fresh ideas and take well decisions about potential projects and opportunities. Although lots of people think that creativity comes from birth, creativity is a skill that people can improve if they spend time and effort. Under the critical and creative thinking skills, we have three traits which are creative thinking which means an ability to see cases from different perspectives and find an original idea, problem solving ability which says that you need to come up with solutions to the problem that is faced, and recognizing opportunities which means that you must see opportunities when they show themselves. The last category was practical skills. Entrepreneurs need practical skills and knowledge to produce goods & services in an effective way and to run a company. We can show goal setting skill, planning and organizing skill, and decision making skill as practical skills. The goal setting skill means being able to put a goal which is realistic and reachable. Then, planning and organizing skill is about whether an entrepreneur is able to coordinate both resources and people to achieve the goal or not. And the last one is decision making skill which is related how are you good at making decision. Taking good decision is based on using relevant information, estimating the potential results of decision, and being confident. As a result, to be a good entrepreneur, you must have various skills which I described above and more.
After the examining of traits of an entrepreneur, we are moving on economic theory of entrepreneurship. This theory date back to the 1700s with the work of Richard Cantillon. He described the idea of entrepreneurs as risk takers. They focused on economic conditions and opportunities. Here, this theory is criticized for failing to catch the dynamic, open nature of market system, and to ignore the specific nature of entrepreneurial activity.
Another theory is resource based theory. This theory focuses on the way that people leverage different resources to begin entrepreneurial efforts. Access to capital increases the possibility to arise venture, but entrepreneurs usually get ventures off the ground with little ready capital. Entrepreneurs may leverage other types of resources such as social networks, human resources, and the information. Sometimes, intangible resources can be resources that a company cannot replace.
Until now, we talked about traits of entrepreneur and two different theories for entrepreneurship. Now, I will talk about Ingvar Kamprad as an excellent entrepreneur by connecting with the things in paragraph two, three, and four. At the beginning, every entrepreneur must have vision. In this sense, Ingvar Kamprad has more costumer oriented vision. He emphasized his vision like” to create better everyday life for the many people” Next, I said that entrepreneur must be able to take risk. In this point, he underlined the importance of risk taking and that he is a risk taker with these words “only people who sleep do not take risks” and he continued “I am not sleeping” Then, I can easily say that Ingvar Kamprad has all the interpersonal skills. During his career, he solved lots of problem between people, he communicates with others, he tells his vision to employees well etc. Next, we will touch on his creativity skills with one example that everyone knows. Due to his creativity, he created furniture to be assembled by the customers. This was the first at that time. In terms of practical skills, we can say that he put good goals, he made good plan and organized well, and he took good decisions.
After the entrepreneurial skills of Ingvar Kamprad, I will build bridges between economic theory of entrepreneurship and Ingvar Kamprad with two real life examples. The first one which shows that he analyzed economic conditions and took risks is that when he was young, he was trading different things and he saw high demand for pens. At this point, he took a loan and ordered 500 pens from Paris. Then he sold these pens and got profit. The second example is that he realized that furniture was luxury for most people by the reason of high cost. And he decided to engage in trade of furniture. He aimed to sell furniture lower prices by reducing costs. As we can see from these two examples, he can analyze economic conditions and take risk. In this sense, he is in accordance with economic theory of entrepreneurship.
When we come to relationship between resource based theory and Ingvar Kamprad, I will explain how he leverage his resources with two real life examples. The first one is that when he was young, he was getting profit from selling matches. This profit can be considered as his resource and he used this resource to expand his product range by reinvesting this profit. The second one is that if we consider time as a resource, when he was young, and during to his life, he was waking up at 5:30 and he was leveraging time more. He is emphasizing the importance of time with these words “Time is your most important resources. You can do so much in ten minutes. Ten minutes; once gone is gone for good.” In short, we can say that he leverages all resources that he owns.
After we made connection between theories and Ingvar Kamprad, we will look at the reasons behind his success. The first reason was his revolutionary business plan. He was originally selling pens, wallets, jewelry etc. In 1947, he started to sell furniture which was produced by local producers and he realized an opportunity of being a furniture supplier. So, he decided to discontinue all other products line and focused on low price furniture. Another one of the biggest reasons of his success is the idea of foldable furniture. This idea attracted customers. Next reason is that his business model focused on three main dimensions which are design, function, and quality to offer good quality furniture at low price. By putting innovative design, developed functionality, and perfect quality together at low price, he drew the route to success. The last important reason is “do it yourself” revolution which means that customer can assembly the furniture on their own. Although there are many reasons behind his success, these are prior ones which leads to success for him.
In conclusion, being an entrepreneur become more attractive in this developing world. So, we need to understand entrepreneur and entrepreneurship notions. To comprehend these notions, we touched on some theories and traits which belongs to an entrepreneur. After this, we examined Ingvar Kamprad as a real-life example by connecting with theories. Then, we looked at reasons behind his success. In short, we saw how a good entrepreneur should be with real-life example of Ingvar Kamprad.
- Smale, T. (2015). 10 Traits All Successful Entrepreneurs Share. Entrepreneur.com. Retrieved from https://www.entrepreneur.com/slideshow/299852.
- Dontigney, E. (2018). What Are the Theories of Entrepreneurship? Azcentral. Retrieved from https://yourbusiness.azcentral.com/theories-entrepreneurship-23795.html.
- Ingvar Kamprad Biography: Success Story of IKEA Founder. (2018). Astrum People website. Retrieved 9:23, Aug 17, 2018, from https://astrumpeople.com/ingvar-kamprad-biography-success-story-of-ikea-founder/.
- Das, C. (2014). Business Success Stories – Ingvar Kamprad, Founder, IKEA. Hubpages. Retrieved from https://hubpages.com/business/Business-Success-Stories-Ingvar-Kamprad-Founder-IKEA.