Entrepreneurial Competencies for Business Development

4. INTRODUCTION

This chapter provides an insight into the entrepreneurial competencies its various types

and relevance with business development. Additionally, the entrepreneurial competencies

and its role and significance for business development have also been undertaken in the

chapter.

4.1 COMPETENCY: A CONCEPTUAL FRAMEWORK

Competency may be defined as the cluster of observable and measurable knowledge,

skills, abilities and personal attributes that enable an individual or an organization to act

efficiently in a job. In competency part, there exist a multitude of definitions and jargon

for example, in law, competence means the quality of being legally qualified to perform

an act; and in linguistics it means the knowledge that help one to produce and

comprehend a language. The new oxford dictionary defines competency as the power,

ability, capability to do a task, whereas according to Merriam Webster competency is the

sufficiency of means for the necessities and conveniences of life. Oxford further states

that competence and competency can be used as synonyms. The word competency comes

from the latin which means „suitable‟ (Bueno & Tubbs, 2004). Furham (1990) states that

the term competency is contemporary but the concept is old. Competency based

methodology was founded by David McClelland, a psychologist from Harvard University

in late 1960‟s and early 1970‟s. According to the researcher competency variables are the

variables that could be used in the prediction of job performance and are biased free in

terms of race, gender and other socio- economic factors. The researcher helped in

identification of performance traits rather than attributes of worker‟s intelligence,

knowledge and skill as mentioned in the article named “Testing for Competence rather

than for Intelligence”. The article was the key point for encouraging the development of

The Business School, University of Jammu. Page 108

 Entrepreneurial Competencies for Business Development

competency than intelligence. According to McClelland (1973), competency

methodology can be compiled with the help of „use a criterion sample‟ to identify

successful characteristics and identification of operative thoughts and behavior that are

causally related to successful outcome and the best predictor to what persons can and will

do in present and future situation is what they have actually done in similar past

situations. Another researcher named Dubois (1993) defines competence as the ability of

an employee‟s to meet the requirements of a job and produce the job output taking all the

constraints of internal and external environment into consideration. The researcher

acclimates the definitions of competency as given by Boyatzis (1982) and states that

competency at job is an underlying a characteristics of an employee in terms of motives,

trait, social role, skill, body of knowledge which results in the effective and superior

performance in a job whereas competency is the capability to apply and use a bundle of

relevant knowledge, skills and abilities required to perform successfully in a defined

work setting (draft, 2005). Competencies are the basic standards that help in the

specification of the level of knowledge, skills and abilities required for being successful

at workplace as well as for the measurement of assessing competency attainment (Daft,

2005). Hartle (1995) emphasizes that competency is a representative of an individual‟s

superiority drive that includes both visible competencies of knowledge and skills and

underlying elements of competencies, like traits and motives. A competency is the

measurement of an individual characteristic that is able to differentiate between superior

and an average performer, or between effective and ineffective performer (Bartram, et al

2002). The outcomes of action in certain context are functional to the extent of the

competencies acquired and implemented. Spencer and Spencer (1993) noticed that

competency is the underlying characteristics of an individual causally related to criterion-

references effective and superior performance in a job. The researchers identified five

different characteristics of competency namely motives, traits, self-concept, knowledge,

The Business School, University of Jammu. Page 109

 Entrepreneurial Competencies for Business Development

and skills. Motives are the things that an individual consistently thinks about or wants, to

stimulate actions. Motives drives, direct and select behavior toward certain actions and

goals and keep away from others. Traits are physical characteristics and consistent

responses to situations. Self-concept is an individual‟s attitudes and values of self-image

(Vanthanophas, V& Thai-ngam, J., 2007). Knowledge is the result of interaction between

intelligence and situation while as, skill is the integration of well-adjusted and well-

developed performance (Winterton et al., 2005). Whereas (Spencer & Spencer, 1993).

categorized the competencies according to its types namely visible and hidden, regarding

with the above, knowledge and skills are visible competencies, whereas self-concept and

traits are not visible competencies can also be called as hidden competencies. Knowledge

and skill competencies are relatively easy to develop as these are visible competencies

and may be somewhat technical competencies whereas, hidden competencies such as

self-concept, traits and motives are behavioral competencies The visible and hidden

competencies are depicted in the iceberg model as proposed by (Spencer & Spencer

1993).

From the above description of competencies, it is commonly understood that competency

is a combination of knowledge, skills abilities and other characteristics which are

required for successful job performance. Fundamentally, competency is a wider concept

and helps a person to do better in practical form assists transformation of knowledge,

skills and attitudes to perform successfully in a particular task and hence helps into

distinguish between a superior and other performer.

4.1.1 Classification of Competencies

In literature, abundant ways are there in order to classify the competencies but the most

common classification forms are done on the basis of logic, functional utility, social and

interpersonal, the personal and psychological traits. Thus, the following typology
The Business School, University of Jammu. Page 110
 Entrepreneurial Competencies for Business Development

describes the most common approach which can be adopted to classify the competencies

framework.

a. Functional Competencies: These are called as technical or job specific competencies

and are defined as a set of professional skills, abilities, and technical knowledge

which is required and essential in order to perform well at job. This competency

aspect focusing on proficiency acquirement in order to handle tools and machine

which required professional & mechanical skills in order to accomplish the task

related objective of the job. These technical skills are often basis for the formal

education, vocational, and apprenticeship programs. The second aspect relates to the

function and subject specific knowledge of the job which is essential for the

accomplishment of the functional related objectives of the job. In short these

technical skills composed up of operational knowledge, experience of processes, and

systems designed to conduct specific activity in addition to ability to use tools,

mechanisms to accomplish these tasks Nordhaug (1998). In this type of competency

category different subject of specialized knowledge, professional skills and

experiences are included. For example, TQM and supply chain management, change

management, accounting and management control strategic management, etc.

However, usability and scope of the competencies changes as per the environment of

work specificity which defined as a degree to which competencies are related to

execution of narrow or broader range of tasks having variation from high to low task

specificity. For example for individual working on managerial position in finance

department need primarily proficiency in accounting and management controlling

thus making it core competence, whereas other competencies like planning and

project management are secondary or supplementary for his job.

The Business School, University of Jammu. Page 111

 Entrepreneurial Competencies for Business Development

b. Generic Management Competencies: This type of competencies includes

competencies which are more common to management related jobs and required in all

managerial jobs irrespective of the nature of business. These are also called as non-

firm specific and non-industry specific competencies that include knowledge and

skills essentials for the all managers irrespective of their nature of job, industry or

firm in which they are working (Nordhaug, 1998). This competence domain consists

of core requirement of management related jobs covering collection of skills,

knowledge, behavior, and intervention strategies that makes managers more effective

in dealing with routine managerial activities. The competencies in generic

management category is different from functional category that is why it is least

concerned with the ability of the managers in handing tools & machine, process, and

technical aspects of the job. Whereas unlike from personal competence category it

does not represent the core personality attributes rather demonstrated behavior and

skills required in management related tasks. The competencies in this category can be

learned through training and development programs or ability to perform better in this

domain increases with the experience and progress in the career.

c. Social and Interpersonal Competencies: The social and interpersonal competence

category covers a wide range of skills and behaviors that makes the managers more

competent and effective at work. Indeed social competencies make managers more

productive in establishing and maintaining healthy business relationships within

organization internally as well as externally. This cluster focus more on people to

people contact at individual and group level on the basis of cooperation and

reciprocal business relationship. The competencies include understanding people

expectations and reactions (Viitala, 2005) and social judgment skills (Mumford et al.,

2000). Individual are more oriented towards social competencies and are good

The Business School, University of Jammu. Page 112

 Entrepreneurial Competencies for Business Development

communicator, effective team player, able to get work done through networking,

capable of lobbying to get advantage for organization, and maintaining fruitful

relationship with different business stakeholders.

d. Cognitive Competencies: The competencies in this domain comprise of cognitive

ability of managers to handles business issues and problems. The competencies in this

domain include employees thinking ability to identify and solve the work related

problem or find innovative solutions to tackle challenges based on cognitive skills

and include major cognitive thinking skills like analytical thinking, systematic

thinking, visionary thinking and creative thinking.

e. Personal Competencies: The competency in this category is defined as an

underlying personality traits and attributes of the managers which are subject matter

of psychology (Hogan et al. 2007). It can be differentiated from other categories as

these are the core values, traits, self-image, motives, and intents of the managers.

These personal attributes define one‟s personality as the underlying motives of the

individuals to define how individual react or behave in given situation. Therefore, it is

one of the significant variables in determining human behavior. In short, these are the

stable part of one‟s personality and essential competencies needed for effective job

performance and derive or influence the behavior or capabilities of manager in other

category as well. The competencies in this domain represent stable part of one‟s

personality that cannot be easily changed or developed through formal learning and

development programs. The competencies in hierarchy represent in continuum from

task oriented to people oriented and from people oriented to personal oriented

competencies needed to deal with the work related to people related issues

respectively. It covers different personality aspects ranging from work related to

interpersonal and intrapersonal activities

The Business School, University of Jammu. Page 113

 Entrepreneurial Competencies for Business Development

f. Soft and Hard Competencies: This classification was introduced by Jacobs (1989).

According to the classification the analytical and organization competencies are

termed as hard competencies while as creativity, interpersonal, and behavioral skills

are found as soft competencies. The soft and hard competencies both are important

for an efficient business operation. Soft competencies control and determine natures

of evident behavior and operation (Hodges & Burchell, 2003). However, this concept

of classification is often criticized because it is very difficult to differentiate between

hard and soft competencies so as to understand and establish conceptual and practical

significance (Woodruffe, 1993). Despite aforementioned criticisms, classification of

competencies on the basis of soft and hard skills is very popular and in practice

(Rainsbury et al., 2002).

g. Threshold and Performance Competencies: Threshold competencies are basic

minimum requirement of knowledge, skills, traits, motives, self-image and social role

and are essential for performing a job. Apart from the above, there are additional

competencies which are required to differentiate between an ordinary performer and

an outstanding performer.

h. Hierarchical Wise Classification: As per the hierarchy within an organization

competencies are found and it is the most popular pattern of classification. This

classification is based on the categorization of competencies needed by managers

across three hierarchical levels of management namely specific need of managers,

line of management. Hence the manager of any organization needs different set of

management competencies in order to perform duties in more operative and

competent way.

i. Prior and Empirical Classification: On the basis of the prior and empirical

classification competencies there are two ways of classifying this group of

The Business School, University of Jammu. Page 114
 Entrepreneurial Competencies for Business Development

competencies in which prior means to start with some predefined theoretical derived

competencies while as empirical analysis means to study competencies on the basis of

its empirical analysis. However, later is more popular and is widely used. Whereas

taking into consideration regarding with the advantages and disadvantages of

theoretical and empirical classification of competencies, empirical analysis perhaps,

is more appropriate approach to start with some predefined classification for

subsequent empirical analysis to elicit competencies resulting into excellent work

performance

However, apart from the above, there are several other categories of competencies which

used in different contexts such as education, medical, global, domestic, cultural, and so

many but the above discussed categories are the most commonly used in the

organizational context for effective performance for the achievement of the objectives

and goals for which many organizations adopts competency mapping approach as a

strategic tool.

4.1.2 Competency Mapping

Competency Mapping is defined as the process of identifying the knowledge, skills,

abilities and judgment required for effective performance in a particular occupation or

profession. There are many kinds of managerial competency models which have been

developed in the world at large, but entrepreneurial competency models are relatively

rare such as: The Generic Entrepreneur Competency Model developed by R.S Mansfield

et al., (1996) the purpose of the model was to identify potential fruitful entrepreneurs

whereas the NRC Entrepreneurship Model was presented by the National Research

Council of Canada (NRC) the purpose of this model was to support employees in making

a successful transition to entrepreneurship in a technological and science-based business

venture. The Generic Entrepreneur Competency Model includes seven clusters

The Business School, University of Jammu. Page 115
 Entrepreneurial Competencies for Business Development

(achievement, thinking and problem solving, personal maturity, influence, directing and

controlling, orientation to others, and additional competencies), and each cluster

comprises a number of separate competencies in total there are 22 competencies in this

model. Whereas the NRC Entrepreneurship Model, it is basically divided into three

clusters named as, achievement and results orientation, interpersonal and team-building,

and business focus, which involved different competencies which may be varied in every

cluster on the basis of difference in their level of competencies.

Competency mapping used for different purposes in an organization such as, for the

recruitment, through specific work-based exercises and relevant, validated, psychometric

tests, assessment during auxiliary development, succession planning and promotion and

organizational development analysis. It serves as a means to ascertain that an

organization‟s knowledge and capabilities are in alignment with its strategy. Hiring the

right people for the right position defines the success of a business organization. The

human resources are the most important asset of a company. It plays a major role in the

achievement or organizational mission and vision. Competency mapping is one of the

most effective measures because it prevents the organization from the costly and deadly

hiring and selection process.

Furthermore, the success of a company does not just depend on its human resources but

would also rely on several factors, as it is clear from the definition that each role is

directly related to the job and goal of the organization in order to achieve maximum

performance and sustaining high productivity levels. All these will be achieved by

establishing the key competencies needed for an organization to grow and succeed and

make a competency framework which governs the set of skills, knowledge, abilities and

capabilities that a candidate should have in order for her or him be qualified for the

position and meet the set expectations. The framework also gives an objective approach

The Business School, University of Jammu. Page 116

 Entrepreneurial Competencies for Business Development

in evaluating the employees‟ performance, helps in achieving high productivity levels

and sustaining maximum performance and professional development. The competency

mapping framework is an important part of the performance check system because this

serves as a standard on how to evaluate and how well an employee is doing. The key

competencies will help the entrepreneur‟s to find a valid approach to handle an employee

with poor productivity level and to strengthen an employee with good performance. A

standardized competency framework serves as an effective tool in training needs analysis.

For retaining the workforce within the organization it is important to have a good

promotion of professionalism and development within the organization. The framework

will also identifies what important skills are needed for an employee to develop its

potentials and eventually improve his performance creating more chances for growth.

The competency framework serves as a backbone of an organization giving support to the

company and its employees. Without proper definition and understanding of

competencies, the employees wouldn‟t able to understand the importance and

requirement of these competencies in an organization. The framework is very supportive

for both the company as well its employees in achieving their goals for them to

accomplish the mission and vision of the organization. Hence these key competencies

differentiate an entrepreneur from a non-entrepreneur.

4.1.3 Entrepreneurial Competency

Entrepreneurial competency can be understand as an individual‟s features whereas an

entrepreneur is an innovative person who likes to take risks for profit maximization in the

business endeavor while defining entrepreneurial competencies in terms of the possession

of traits, skills, and knowledge, various authors have tried to establish these

entrepreneurial features into key competency regions. Chandler and Jansen (1992)

contended if an organization needs to function effectively in entrepreneurial role, two

The Business School, University of Jammu. Page 117

 Entrepreneurial Competencies for Business Development

competencies are required, first is the ability to identify and visualize taking advantage of

opportunity and the other in order to determine the firm‟s creation through fruition, which

requires the willingness and capacity to generate intense effort for long, hard hours.

A study conducted by Baum et al., (2001) and distinguished the entrepreneurial

competencies into two categories namely, specific competency and general competency.

While as Specific competency consists of industry skills and technical skills, while

general competency includes organization skills and opportunity recognition skills.

Another author Sony and Iman (2005) decompose entrepreneurial competency into four

dimensions named as management skills, industry skills, opportunity skills and technical

skills.

According to Brophy & Kiely (2002), Entrepreneurial competency is an approach to

identify behaviors that could be associated with effective performance. Although it has

been tough to determine why, in similar situations, some entrepreneurs fail while others

succeed, so it is the entrepreneurial competencies that helps in addressing to come out

from these situation. Man et al. (2002) defined entrepreneurial competencies as higher-

level characteristics which includes personality traits, skills and knowledge, which can be

seen as the total ability of the entrepreneur at job to perform successfully. Six major

competency areas are identified by the author are Opportunity, Organizing, Strategic,

Relationship, Commitment, and Conceptual Competencies. It was seen that the behaviors

identified in most other studies could be categorized according to the competency areas

defined by Man et al. (2002) and because of its comprehensiveness, Man et al. (2002)

categorization of entrepreneurial competencies is utilized in the present study and these

competencies are briefly explained below.

The Business School, University of Jammu. Page 118

 Entrepreneurial Competencies for Business Development

a. Opportunity Competencies

The most distinguishing competencies for the entrepreneur are the opportunity related

competency. For illustration, it was author McClelland (1987) who finds “to see and act

on opportunities” as one of the competency for successful entrepreneurs. Chandler and

Jansen (1992) recommended that the most significant entrepreneurial roles are the ability

to recognize and foresee taking benefit of opportunities. Hence, this category of

competencies includes entrepreneurial activities in term of spotting opportunities;

actively seek new opportunities, and developing opportunities.

b. Organizing Competencies

Another group of competencies is organizing competencies which are very similar to the

managerial competencies as suggested in the literature (Boyatzis, 1982). According to

McClelland‟s (1987) “efficiency orientation”, “concern for high quality of work”, and

“monitoring” are the competencies which are required in managing various functional

areas of a firm so as to keep the firm operation well. These groups of competencies are

known for their ability to lead, control, monitor, organize, and develop external and

internal resources for the firm to operate and function effectively.

c. Strategic Competencies

Being the owner of the firm, the entrepreneur must set the direction for the whole

company and for this entrepreneur require strategic competency to have a vision,

business, clear goals, and to formulate and implement strategies to achieve these vision

and goals. Hence, these competencies are related to setting, evaluating and implementing

the strategies of the firm, while calling for abilities and skills from a broader and long-

term perspective.

The Business School, University of Jammu. Page 119

 Entrepreneurial Competencies for Business Development

d. Relationship Competencies

This category of competencies relates to person-to-person or individual-to-group based

interactions, e.g., building a context of cooperation and trust, using contacts and

connections, persuasive ability, communication and interpersonal skill (Man et al., 2002)

and to become successful entrepreneur needs to possess competencies in relationship

building, communication, persuasive and interpersonal abilities(McClelland, 1987; Lau et

al., 2000). Bird (1995) also described this relationship building activities as

entrepreneurial bonding.

e. Commitment Competencies

Successful entrepreneurs are often characterized as diligent people with a restless attitude

in their work. In other words, they have a strong competency in totally committing,

determining and dedicating, as well as taking proactive actions towards their

responsibilities and duties. Another aspect of this competency area is the initiative or

proactive orientation, which calls for the entrepreneurs taking actions before being asked

or forced to by events (McClelland, 1987) and this commitment competencies drive the

entrepreneur to move ahead with the business.

f. Conceptual Competencies

Conceptual competencies represent a category of competencies which are not easily

identifiable behaviors but are often considered to be important for entrepreneurial

success. Conceptual competencies have a stronger linkage with entrepreneurial traits and

are less directly observable. It involves high level of conceptual activities and is reflected

in the entrepreneur‟s behaviors, learning, make decisions and solve problems etc. These

competencies enhance the effectiveness of carrying a task in the present or in the future.

The Business School, University of Jammu. Page 120

 Entrepreneurial Competencies for Business Development

g. Personal Entrepreneurial Competencies

These are required to perform the tasks effectively and efficiently. This includes the

following: Initiative: It is an inner urge in an individual to do or initiate something.

Ability to See and Act on Opportunities: Entrepreneurs look for opportunities and take

action on such opportunities. Persistence: It means the capacity to take frequent and

different actions to overcome from problems. Information Seeking: A efficacious

entrepreneur always keeps his eyes and ear open. The entrepreneur should accept new

ideas which can help in realizing the goals. Concern for High Quality of Work:

Entrepreneurs act to do things that meet the prevailing standards of excellence.

Commitment to Work: Successful entrepreneurs are ready to make all sacrifices for

completing the commitments they have made. Commitment to Efficiency: Entrepreneurs

has to look and find different ways to do things I higher pace with limited number of

resources and with lower cost. Entrepreneurs try new methods to make their work easy,

simpler, enhanced and efficient. Systematic Planning: may be stated as the ability of an

entrepreneur to develop and use consistent steps to plan in order to reach the goals.

Problem Solving: Entrepreneurs are supposed to possess the skill for the identification of

new and unique ideas to reach goal. Entrepreneurs should be able to generate new ideas

or innovative solutions to solve problems. Assertiveness: Entrepreneurs assert their own

competence, reliability and other personal or organizational qualities. Persuasion:

Entrepreneurs should have the ability to pursue successfully and to perform the activities

effectively and efficiently. Use of Influence Strategies: Entrepreneurs should have the

competence of using number of strategies to inspire others.

h. Venture Initiation and Success Competencies

An entrepreneur must possess the competencies that must be required for launching the

enterprise and for its survival and growth. These set of classification of entrepreneurial
The Business School, University of Jammu. Page 121
 Entrepreneurial Competencies for Business Development

competencies are further divided into two categories of competencies namely Enterprise

Launches Competencies and Enterprise Management Competencies both are briefly

defined as follows:

h (i) Enterprise Launches Competencies:

These include the following: Competency to understand the nature of business,

Competency to comply with Government regulations, Competency to deal with the

business, Competency to finance the business, Competency to locate the business,

Competency to plan the marketing strategy, Competency to choose the type of

ownership, Competency to obtain technical assistance, Competency to develop a business

plan, Competency to determine the potential as an entrepreneur.

h (ii) Enterprise Management Competencies:

These include competency to protect the business, Competency to manage customer

credit and collection, Competency to manage the finances, Competency to manage the

business records, Competency to manage sales efforts, Competency to promote the

products and services of the business, Competency to manage human resources,

Competency to manage the business. Organizations are facing different business growth

and development challenges; hence the concept of producing greater entrepreneurial

competencies and their activities has become a prominent goal, for many stakeholders,

government and policy makers. Entrepreneurial competencies has seen important to

business development has been studied by many researchers (Davidsson, et al., 2006).

4.2 BUSINESS DEVELOPMENT

Business development is defined as the action that intensify, the profit, production, or

service potential of an enterprise, investment of capital and time that causes, the growth

The Business School, University of Jammu. Page 122

 Entrepreneurial Competencies for Business Development

and expansion of an enterprise, the process of moving a business towards the point where

it can provide its services and products to the entire external group that wants them, the

promotional side of business networking, intending to persuade, prospects that appear to

have the potential become customers, clients, the process of promotion to build and

sustain working relationships that relate to the business purpose. Business development

comprises of various work and processes usually pointing at developing and

implementing growth opportunities within and between organizations. It is a part of the

fields of business, commerce and organizational theory. Business development is also

defined as the generation of continue value for an enterprise in terms of its customer,

markets and relationship. Nowadays the term business development is spread within

scientific literature. Definitions range from relative organizational effectiveness

objectives to a more strategic and general approach of doing business. One thing they all

have in common is that business development functions opportunities for business

growth& success are to be analyzed and if found to be worthwhile-realized. In fact

business development is also understand as the creating of new opportunities through

new and different approaches is set as the basis forming definition of this study (Eades,

2003). Business development therefore many times aims at a change in the current area

of operation and can be seen as a innovation in regards to technologies or business

models (Siemer, 1991). But business development is not only concerned with the

expanding of organization‟s portfolio but also concern with the reduction of portfolio as a

task for business development. All of this is done in order to through the realization of

potential to achieve organization growth.

In fact, the modern management views the concept of business development as an

accomplishment of services and projects towards achieving overall success of an

organization. These projects in business developments would in the end lead to the

The Business School, University of Jammu. Page 123

 Entrepreneurial Competencies for Business Development

overall objective of a growth perspective for the firm-growth that can be itself be divided

up into the four subcategories sales, profit, product quality and service i.e. image and

customer perception. These subcategories of growth are intertwined and often found in

various percentages in one project. For the area of supply chain management and logistics

there can also be some starting points for business development projects like in new

technologies or inefficiencies in existing standard operating procedure (Blecker, Huang,

2008; de Boer, 2004 ; Hildebrandt et al., 2007; Raghavulu et al., 2007; Schulte, 2005;

Smirnov et al., 2006; Stuger, Unterbrunner, 2006; Wang, 2007; Zelewski, 2007).

Business development involves the intra organizational integration of linking its services

and products with all the value network, strategic partner and constituencies as an input

for organizational growth. In addition to another task of business development involves

the commercialization of these products and technologies as well as seeking new

opportunities through cooperation, among all the stakeholders. Business development as

a process ideally has a cross-functional set of actions that describe some of phases within

each phase certain work packages are defined that need to be done. And for which the

business development team may also have to consult with internal and external experts.

The output of each phase is typically reviewed by senior management who decides

whether the project moves on into the next phase or is not worth any further investment.

A typical business development process consists of various stages namely, Idea, concept,

feasibility, and implementation. Whereas idea is the initial phase that set the foundation

for any project here any opportunity is to be analyzed in order to have certain pre-defined

criteria available and because of structured setup of every stage opportunities can be

related to each other, this is necessary in order to prioritize limited resources, followed by

the concept, once an opportunity has passed the initial idea-phase, the business

development team can then work on analyzing and reviewing the details which will

constitute the concept of how the opportunity contributes to the business growth and

The Business School, University of Jammu. Page 124

 Entrepreneurial Competencies for Business Development

performance. After that feasibility of the business development process have taken into

consideration. It is a formal investigation of opportunity that is conducted once the

concept has been laid out. Hence this is usually the phase where most time is spent within

a business development project. After checking the feasibility implementation has to take

place. This is the stage where the project actually becomes operational. Business

development process is the part of management concern for creating long term values.

Business development in relation of an established concept respectively function in a

corporation will be typically found in a mature enterprises, again as a strategic tool to

achieve business success and organizational effectiveness.

In context of firm, especially start-up and young businesses, generally try to grow

through their core business for their initial know-how. With increasing product

differentiation to come a point where they feel that functions, whose main task is to

analyze further opportunities as an input for organizational growth.

4.3 ROLE AND SIGNIFICANCE OF ENTREPRENEURIAL

COMPETENCIES FOR BUSINESS DEVELOPMENT

Entrepreneurial competencies are well associated with the business development and

competitiveness (Man et al, 2002). A specific group of competencies are relevant to

implement a successful entrepreneurship (Nuthall, 2006) and is often associated with

survival & development as well as growth and success of business (Colombo & Grilli,

2005). As we all know that the business is deliberated a complex process in this

competitive business environment, because it is very dynamic and keep on changing very

constantly because our technologies are also keep on moving and getting more and more

advance with every passing years. Hence, to have a check on these dynamic

environmental activities, different competence and characteristics like intellectual,

The Business School, University of Jammu. Page 125

 Entrepreneurial Competencies for Business Development

attitudinal, behavioral, technical, and managerial dynamics can be helpful to counter

affect the harmful effects of environment on the success and development of an

organization. The above entrepreneurial characteristics are the abilities to cope with

uncertainty, identifying the risks which are aroused from the uncertainty. The

characteristic of an entrepreneur such as risk taking, innovation, need for achievement,

etc. are consistently highlighted in the research (Li, 2006., Kamalanabhan et al, 2006;

Palmer, 1971; Martin, 1984; Lee and Peterson, 2000; Price, 2004). Risk taking

competency is used as a synonymous with entrepreneurship. Awareness of a job and its

risks is referred to as a self-competency of entrepreneurship (Lunnan et al, 2006; Halis,

2013). Entrepreneurial competencies and business development is one of the main driver

for research and practice in the field of entrepreneurial competencies in order to identify

if there is any association of entrepreneurial competencies with business growth and

development. Policy makers, in particular, have been concerned about both avoiding

small business failure, and promoting business growth. Venture growth has been

recognized as an important indicator of business success in past studies (Covin & Slevin,

1997; Low & MacMillan, 1998). Competencies are particularly related to the birth,

survival, growth and development of a business (Bird, 1995; Baum et al., 2001; Colombo

& Grilli, 2005). Past researches on entrepreneurial competencies show that an

entrepreneur‟s skills contribute to business growth and development (Lerner & Almor,

2002; Bird, 1995; Cooper et al., 1994). Further, there are evidences from the past

researches that developing entrepreneurial skills among entrepreneurs contribute to

profitability, growth and development of business organization (Chandler and Jansen,

1992). In the present column we draw together insights from researches on the

relationship between entrepreneurial competence, with the performance, growth and

development. In entrepreneurship and SME research it is found that the entrepreneur‟s

demographic, psychological and behavioural characteristics as well as their skills and

The Business School, University of Jammu. Page 126

 Entrepreneurial Competencies for Business Development

technical know-how are often cited as the most influential factors to business

development. The literature highlights three different mechanisms through which

competencies can affect development. First, mechanism shows that more competent

entrepreneurs choose to exploit better venture opportunities, the quality between fit and

opportunity matters equally. Second, management competencies are associated with

business strategy, the more competent entrepreneurs can formulate superior strategies

that fit to their business development. Resource-based theorists have noted that

entrepreneurs and their competencies are a critical and valuable resource of the firms.

According to Bird (1995) competencies are the quality of actions taken by entrepreneurs

and it is directly related to business development. While as Chandler and Jansen (1992)

categorized competencies into three fundamental roles named as traditional

entrepreneurial skills, managerial role and technical-functional role. The results revealed

that self-reported competencies of entrepreneurs were correlated with business

development. SMEs‟ competencies are most connected to the entrepreneurial stage of the

firm life-cycle (Churchill & Lewis, 1983). These stages of business development include

moving from an entrepreneurially managed business to a professionally managed

business. Whereas, Hofer and Charan (1984) analyzed that a proper analysis of

managerial skills and training is essential for the transformation of an entrepreneurial

organization to a professionally managed organization. During the last two decades, there

have been a number of research projects that have sought to develop categories of

entrepreneurs along with a variety of different dimensions to better understand and

comprehend the growth process. Different authors have identified different skills,

knowledge and experience as being at the heart of entrepreneurial success. For example:

Personal background and experience such as commercial experience, history of

innovation, production and marketing experience, status, entrepreneurial experience, and

previous contact with venture capitalists (Murray, 1996). Whereas, Basu and Goswami

The Business School, University of Jammu. Page 127

 Entrepreneurial Competencies for Business Development

(1999) deliberated the effect of socio-economic factors like as educational, prior business

experience concerned with family background in business and years in business, reliance

on bank finance and informal sources of finance at start-up. Freel (1999) identified the

skill gaps within small firms and found that management deficiencies within small firms

were hypothesized and comprised of poor planning, support irregularity of management

staff and lack of sufficiency in marketing insufficient marketing, intellectual abilities,

social abilities and managerial skills and abilities are the cause of business development

(Gasse et al., 1997). Personal attributes like as extravert personality, networking,

leadership, self-confidence, innovativeness and risk-taking (Martin &Staines, 1994).

Behavioral characteristics such as big picture perspective, opportunities, commitment,

need for control, have a utilitarian view of what is right, uncertainty, using contacts and

connections, and embracing competence (Mitton, 1989). In a study conducted by Man et

al. (2002), different areas of entrepreneurial competencies, in context of behavioral

perspective, have been distinguished, namely; opportunity, relationship, analytical,

innovative, operational, human, strategic, commitment, learning and personal strength

competencies. The result reveals that competencies have either direct or indirect impacts

on business development. One of the major challenges for a new business is that both the

problems faced and the skills necessary change as the firm moves from one stage of

development to another (Churchill & Lewis, 1983). Therefore, understanding the changes

required as a consequence of growth is vital as entrepreneur‟s skills and capabilities. A

planned approach is desirable for consistent business development at every stage.

According to Bird (1988) among others notes the entrepreneur‟s intentions such as,

persistence, perseverance is the key characteristic for the business development. SMEs

competencies may be defined as entrepreneurs capability and the collaboration of in the

acquirement, successful use of resources for the organization purpose in which it

operates. Hence, there exist a direct relationship between competencies, value creation

The Business School, University of Jammu. Page 128

 Entrepreneurial Competencies for Business Development

and the firm‟s strategy and growth (Capaldo et al., 2004). The management structure and

independence of a small enterprise put the entrepreneur-manager in the most critical

position in the running of the business. The success and failure of the business depends

greatly on the person‟s competencies (Chandler and Jansen, 1992; Olson, 1987).

Understanding the components, dynamics, and effects of entrepreneurial and managerial

competency has important economic, social and political implications (Newton, 2001).

Entrepreneurial competencies comprise of components that are deeply rooted in a

person‟s background (traits, personality, attitudes, social role and self-image) as well as

those that can be acquired at work or through training and education (skills, knowledge

and experience) (Man and Lau, 2005). Research suggests that entrepreneurs need both

entrepreneurial and managerial competencies, and that the later are particularly important

as the business grows and to support successful business development. New-venture

founders often find there selves unrehearsed in order to manage growth-related

conversions effectively (Galbraith, 1982). A brief understanding of the business life cycle

and course of firm growth. It is found that entrepreneurial and managerial competencies

differ by stage of firm development (Gasse et al., 1997). As this statement suggested that

understanding of competencies is difficult and very challenging. Burgoyne (1989)

explained the difficulties in identifying core management competencies. These include

measuring and division of competencies, generalization of skills depending upon

different category of managers, changing nature and center of managing roles,

accommodation the divergent managerial styles and managing strategies, etc. Similarly,

for entrepreneurial competences there are challenges associated with: differentiating one

competency from another; measurement and identification of competencies;

understanding the differences between competencies for different contexts; appreciating

the relationship between personal style and entrepreneurial behaviors; and, understanding

the influence of entrepreneurial competencies not just on business development, but also

The Business School, University of Jammu. Page 129

 Entrepreneurial Competencies for Business Development

on staff and customer‟s experience of the business. Hence it is not surprising that loads of

frameworks and lists of entrepreneurial competencies have been developed, and that

while there is some overlap between these frameworks there are also differences. The

empirical research and theoretical propositions that have led to these frameworks derives

from a range of different contexts. Therefore entrepreneur‟s competency is a perilous

factor to excel in the growth and development of business in the current scenario

competitive business environment.

The Business School, University of Jammu. Page 130

 Entrepreneurial Competencies for Business Development

References

Bartram, D. (2002). The SHL Corporate Leadership Model. SHL White Paper. Thames

Ditton: SHL Group plc.

Basu, A., & Goswami, A. (1999). South Asian entrepreneurship in Great Britain: factors

influencing growth. International Journal of Entrepreneurial Behaviour & Research,

5(5), 251-275.

Baum, J.R., Locke, E.A. & Smith, K.G. 2001. A multidimensional model of venture

growth. Academy of Management Journal. 44(2), 292–302

Bird, B. (1988). Implementing Entrepreneurial Ideas: The Case for Intention. Academy of

Management Review, 13, 442 53.

Bird, B. (1995), Towards a theory of entrepreneurial competency. In Advances on

Entrepreneurship, Firm Emergence and Growth, eds. J.A. Katz, and R.H. Brockhaus, 51-

72. Greenwich, Conn.: JAI Press.

Blecker, T. Huang, G. Q. (2008). RFID in Operations and Supply Chain Management.

Munchen: Erich Schmidt.

Boyatzis, R. E. (1982). The Competent Manager. New York: Wiley.

Brophy, M., & Kiely, T. (2002). Competencies: A new sector. Journal of European

Industrial Training, 26(2-4), 165 – 176.

Bueno, C & S. Tubbs (2004). Identifying global leadership competencies: An exploratory

study. The Journal of American Academy of Business, Cambridge, 80-87.

The Business School, University of Jammu. Page 131

 Entrepreneurial Competencies for Business Development

Burgoyne, J. (1989) Creating the managerial portfolio: building on competency

approaches management development, Management Education and Development, 20(1),

56 – 61.

Burgoyne, J. (1989). Creating the Management Portfolio: Building on Competency

Approaches to Management Development, Management Education & Development,

20(1), 56 – 61.

Capaldoa, G., Iandolib, L., & Ponsiglionec, C. (2004). Entrepreneurial competencies and

training needs of small firms: A methodological approach. Paper presented at the 14th

Annual International Entrepreneurship Conference, Napoli.

Chandler, G. N. and Hanks, S. H. 1994. Founder competence, the environment, and

venture performance. Entrepreneurship Theory and Practice. 18(3), 77-89.

Chandler, G.N. and Jansen, E. 1992. The founder‟s self-assessed competence and venture

performance. Journal of Business Venturing. 7(3), 223-236.

Churchill, N.C. & Lewis, V.L. (1983). The five stages of small business growth. Harvard

Business Review, vol. 61(3), 30-50.

Colombo, M. G., & Grilli, L. (2005). Founders‟ human capital and the growth of new

technology-based firms: A competence-based view. Research Policy, 34.

Cooper, A. C., Gimeno-Gascon, F. J., & Woo, C. Y. 1994. Initial human and financial

capital as perdictors of new venture performance. Journal of Business Venturing, 9, 371-

395.

The Business School, University of Jammu. Page 132

 Entrepreneurial Competencies for Business Development

Covin, J.G. & Slevin, D.P. (1997). High Growth Transitions: Theoretical Perspectives

and Suggested Directions, in Sexton, D.L. and Smilor, R.W. (Eds), Entrepreneurship,

Upstart Publishing, Chicago, IL, 99-126.

Daft, R. L. (2005). The leadership experience. Mason, Ohio: Thomson South-Western.

Davidsson, P., Achtenhagen, L. and Naldi, L. (2006). “What do we know about small

firm growth?” In Parker, S. (ed.) The Life Cycle of Entrepreneurial Ventures.

De Boer, S. (2004). The impact of dynamic capacity management on airline seat

inventory control. Journal of Revenue and Pricing Management, 2 (4), 315-330.

Dubois, D. D. (1993). Competency-based performance improvement: A strategy for

organizational change Amherst, MA: HRD Press, Inc.

Eades, K. M. (2003): The New Solution Selling: The Revolutionary Sales Process That Is

Changing the Way People Sell. New York.

Freel, M. S. (1999). Where are the skills gaps in innovative small firms? International

Journal of Entrepreneurial Behaviour& Research, 5(3), 144-154.

Furnham, A. (1990). Can people accurately estimate their own personality test scores?

European Journal of Personality, (4), 319–327.

Galbraith, J. R. (1982). Designing the innovating organization. Organizational

Dynamics, 10, 5-25.

Gasse, Yvon et al. (1997), Entrepreneurial-Managerial Competencies and Practices of

Growing SMEs. University of Laval Centre for Entrepreneurship and SMEs.

The Business School, University of Jammu. Page 133

 Entrepreneurial Competencies for Business Development

Halis, M. (2013). Kırgızistanda üniversite adaylarının kariyer güdüleri ve değerleri

ilişkisi: bir araştırma. Dumlupınar Üniversitesi Sosyal Bilimler Dergisi. Sayı 34, 1302 –

1842.

Hartle, F. (1995). How to re-engineer your performance management process. London:

Kogan Page.

Hildebrandt, D. Schumann, R. Kiziltoprak, T. Behrens, J. (2007). Enablign SME

Logistics Networks using Lean IT Solutions – A Case Study. Blecker, T. Kersten, W.

Herstatt, C. (eds.). Key Factors for Successful Logistics. Berlin: Erich Schmidt, 17-35.

Hodges, D., & Burchell, N. (2003). Business graduate competencies: Employers views

on importance and performance. Asia-Pacific Journal of Cooperative Education, 4(2), 16-

22.

Hofer, C.W., Charan, R., (1984). The transition to professional management: mission

impossible? American Journal of Small Business 9 (1), 1–11.

Hogan, J., Davies, S., & Hogan, R. (2007). Generalizing personality-based validity

evidence. In S. M. McPhail (Ed.), Alternative validation strategies (pp. 181-229). San

Francisco: Jossey-Bass.

Jacobs, R. (1989). Getting the Measure of Managerial Competence. Personnel

Management, 21(6), 32-37.

Kamalanabhan, T.J., Sunder, D.L., & Manshor, A. T. (2006). Evaluation of

Entrepreneurial Risk-Taking Using Magnitude of Loss Scale. The Journal of

Entrepreneurship, 15(1), 37-46.

The Business School, University of Jammu. Page 134

 Entrepreneurial Competencies for Business Development

Lee, S. M., & Peterson, J. S. (2000). Culture, Entrepreneurial Orientation, and Global

Competitiveness. Journal of World Business, 35(4), 401-415.

Lerner, M. & Almor, T. (2002). Relationships among strategic capabilities and the

performance of women-owned small ventures, Journal of Small Business Management,

40, 109-125.

Li, Dr. Jun (2006). Entrepreneurship and Small Business Development in China.

Emerald Group Publishing Limited. Bradford: United Kingdom.

Low, M. & Macmillan, I. (1998). Entrepreneurship: Past Research and Future

Challenges, Journal of Management, 14(2) 139-61.

Lumpkin, G.T., & G.G.Dess, (1996). Clarifying the Entrepreneurial Orientation

Construct.

Lumpkin, G.T., & G.G.Dess, (2001). Linking two Dimensions of Entrepreneurial

Orientation to Firm Performance: the Moderating Role of Environment and Industry Life

Cycle, Journal of Business Venturing, 16, 429-451.

Lunnan, et al (2006). Entrepreneurial Attitudes and Probability for Start-ups an

Investigation of Norwegian Non-industrial Private Forest Owner. Forest Policy and

Economics, 8, 683-690.

Man, T. and Lau, T. (2000). Entrepreneurial competencies of SME owner/managers in

the Hong Kong service sector: A Qualitative Analysis, Journal of Enterprising Culture,

8(3), 235-254.

The Business School, University of Jammu. Page 135

 Entrepreneurial Competencies for Business Development

Man, T. W., Lau, T., & Chan, K. F. (2002). The competitiveness of small and medium

enterprises: a conceptualization with focus on entrepreneurial competencies. Journal of

Business Venturing, 17(2), 123-142.

Man, T., Lau, T., & Chan, K.F. (2002), The competitiveness of small and medium

enterprises. A conceptualization with focus on entrepreneurial competencies. Journal of

Business Venturing, 17(2), 123-142.

Man, T.W.Y. and Lau T. (2005). The context of entrepreneurship in Hong Kong: An

investigation through the patterns of entrepreneurial competencies in contrasting

industrial environments, Journal of Small Business and Enterprise Development,12(4),

464-481.

Mansfield, R. S. (1996). Building competency models: Approaches for HR professionals.

Human Resource Management, 35, 7-18.

Martin, G., & Staines, H. (1994). Managerial competences in small firms. Journal of

Management Development, 13(7), 23-34.

Martin, S.S. (1984). Exploring the Concept of Entreprise. Nursing Economics, 2, 406-

408.

McClelland, D. C. (1973). Testing for Competence rather than for “Intelligence”.

American Psychologist, 28, 1-14.

McClelland, D. C. (1987). Human Motivation. New York: Cambridge University Press.

Mitton, D.G. (1989). The Complete Entrepreneur. Entrepreneurship Theory and

Practice, 13(3), 9-19.

The Business School, University of Jammu. Page 136

 Entrepreneurial Competencies for Business Development

Mumford, M. D., Zaccaro, S. J., Connelly, M. S. & Marks, M. A. (2000). Leadership

Skills Conclusions and Future Directions. Leadership Quarterly, 11(1), 155-170.

Murray, G. (1996). A synthesis of six exploratory, European case studies of successfully

exited, venture capital-financed, new technology-based firms. Entrepreneurship Theory

and Practice, 20(4), 41-60.

Newton, J. (2001). Views from Below: Academics Coping with Quality. Sixth QHE

Seminar in association with EAIR and SRHE May 26. Birmingham.

Nordhaug, O. (1998). Competence Specificities in Organizations: A Classificatory

Framework. International Studies of Management & Organization, 28(1), 8-29.

Nuthall P. L. (2006). Determining the important management skill competencies: The

case of family farm business in New Zealand. Agricultural Systems 88(2-3), 429-450.

Palmer, M. (1971) The Application of Psychological Testing to Entrepreneurial Potential.

California Management Review, 13, 32-38.

Price, R.W. (2004). Roadmap to Entrepreneurial Success: Powerful Strategies for

Building a High-Profit Business, Saranac Lake: New York, USA: Amacom.

Raghavulu, P. Yamani, N. Ravindranath, K. (2007). Innovative IT Systems in Logistics

and Supply Chain Management – RFID. Blecker, T. Kersten, W. Herstatt, C. (eds.). Key

Factors for Successful Logistics. Berlin: Erich Schmidt, 169-178.

Rainsbury, E., Hodges, D. L., Burchell, N., & Lay, M. C. (2002b). Ranking workplace

competencies: Student and graduate perceptions. Asia-Pacific Journal of Cooperative

Education, 3(2), 8-18.

The Business School, University of Jammu. Page 137

 Entrepreneurial Competencies for Business Development

Schulte, C. (2005). Logistik-Wege zur Optimierung der Supply Chain. 4th ed. Munchen:

Vahlen.

Siemer, S. (1991). Diversifizieren mit Venture-Management: Effizienz und praktische

Anwendung von Venture Einheiten zur Erschließung neuer Geschäftsfelder. Berlin.

Smirnov, A. Shilov, N. Kashevnik, A. (2006). Analysing Supply Chain Complexity via

Agent Based Negotiation. Blecker, T. Kersten, W. (eds.). Complexity Management in

Supply Chains. Munchen: Erich Schmidt, 51-65.

Sony, Heru Priyanto. and Iman, Sandjojo. (2005). Relationship between entrepreneurial

learning, entrepreneurial competencies and venture success: empirical study on SMEs.

International Journal of Entrepreneurship and Innovation Management. 5(5/6), 454-468.

Stuger, A.Unterbrunner, F. (2007). Optimum Noch Nicht Erreicht. Logistik Heute, 29(4),

28-29.

Viitala, R. (2005). Perceived Developmental Needs of Managers Compared to an

Integrated Management Competency Model. Journal of Workplace Learning, 17(7), 436-

451.

Wang, W. Y. C. et al. (2007). Implementing Supply Chain Management in the New Era –

A Replenishment Framework for the Supply Chain Operations Reference Model. Wang,

W. Y. C. et al. (eds.), Supply Chain Management – Issues in the New Era of

Collaboration and Competition. Hershey: Idea Group Publishing, 1-22.

Winterton, J., Delamare-Le Deist, F. and Stringfellow, E. (2005) Prototype Typology of

Knowledge, Skills and Competences (Thessaloniki: CEDEFOP).

The Business School, University of Jammu. Page 138

 Entrepreneurial Competencies for Business Development

Woodruffe, C. (1993) What is meant by a competency? Leadership and Organization.

Development Journal, 14(1), 29-36.

Zelewski, S. (2007). Faire Verteilung von Effizienzgewinnen in Supply Webs. Ein

spieltheoretischer Ansatz auf der Basis des t-Werts. Corsten, H. Missbauer, H. (eds.).

Productions and Logistic management. Munchen: Franz Vahlen, 551-572.

The Business School, University of Jammu. Page 139