1.2. Entrepreneurship and choice of position in competition
In modern conditions, one of the decisive factors for the success/failure of commercial activity is the increasing instability of the enterprise's external environment: events are becoming increasingly unusual and impossible to learn from past experience; the rate of change increases, which significantly exceed the speed of the response of the enterprise; the frequency of occurrence of unexpected events, sudden changes, their unpredictability increases. In such circumstances, it becomes impossible to manage business activities by reacting to problems that have already arisen on the basis of previous experience or its extrapolation. For a timely and effective response, foresight, research and creativity is necessary. These methods require the reinforcement of entrepreneurship motives, as well as the use of specific models for the adoption and implementation of decisions that have important long-term consequences (strategic decisions).
The leading motivations for entrepreneurship are:
o motives for entrepreneurial reactions;
o motives of intrafirm business;
o motives for competition and cooperation in the development of products and technology;
o motives of entrepreneurial risk.
These and other motivations of entrepreneurship contribute to the transformation of enterprises of incremental type into enterprises of entrepreneurial type.
To optimize profits in the commercial activity of enterprise-type enterprises, motives of entrepreneurial reactions and entrepreneurial risk are important.
The most well-known models for strategic decision-making (strategic management) include models of strategic planning, the choice of strategic positions in competition, management based on the ranking of strategic tasks and management of weak signals. The main model for profit optimization in the short and long term is the model of choosing strategic positions of the company (company, firm) in competition.
1.2.1. Enterprise of entrepreneurial type
In the market economy, entrepreneurship and entrepreneurial style of activity are an important condition for the success of an enterprise and the condition for its development.
Entrepreneurship is searching for new areas of rationalization and profitable investment of resources, implementing new combinations in production, moving to new markets, creating new products. It is aimed at generating a profit beyond the average by meeting the needs most fully on the basis of success and leadership in a particular economic activity - in creation of new products and technologies, in production or marketing. An integral part of entrepreneurship is foresight, sound risk and strategic management. Because of this, entrepreneurship becomes an active factor in the development of production.
Entrepreneurial style of activities is significantly different from the widespread incremental style, which aims to minimize deviations from traditional behavior both within the enterprise and in relations with suppliers, subcontractors, consumers. The development of the entrepreneurial style of the organization (owners of property, management, the core of shareholders) is associated with far-reaching changes in motivation, organizational structure, management system, managerial and managerial skills, leadership style.
If the enterprise has firmly established an incremental style of behavior, in which any significant changes are considered undesirable, the chances of its success will decrease as competition develops. In order to imagine the direction in which we need to act for the transition to an entrepreneurial style of behavior, let's compare the characteristics of the activity of enterprises of an incremental and entrepreneurial type (Table 1.4).
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