Entrepreneurship in the Global Environment - Assignment Example

Entrepreneurship Entrepreneurship Apart from their wealth, Ratan Tata and Warren Buffett rank as some of the world’s most influential people. Their ideas on socio-economic and political causes extend across a wide realm of the society. Ratan Tata is a son of the long deceased Nobel Tata. A distant relative, Navajbai Tata adopted Nobel Tata after the demise of her husband. Tata’s parents, Sonoo and Naval separated when the later entrepreneur was 10 years old and the brother was seven years old. In turn, the two young boys were raised up by the grandmother, Navajbai. Naval’s second marriage bore another son, Noel Tata. Ratan began his schooling at Campion School and finished the secondary education at John Connon School. He later joined Cornell University for a Bachelor of Science in structural engineering thereby graduating in 1962. Ratan joined the Harvard Business School in 1975 for an Advanced Management Program. Tata’s career beginnings in 1961 involved shoveling limestone and managing the blast furnace at Tata Steel. Thirty years later, J.R.D stepped down as the director of Tata Sons thereby endorsing Ratan as his successor. Ratan’s superb management and entrepreneurial skills created significant success for the company. For instance, the conglomerate acquired Tetley, Jaguar land Rover, and Corus thereby transforming from an Indian Company to a global one. The company currently sources 65% of its revenues from abroad. Ratan highly participated in the creation of Tata Nano, the world’s least costly passenger car. On December 2012, Ratan retired from his chief executive responsibility thereby becoming a chairman emeritus of Tata Group. Ratan continues making new deals and eyeing the evolving business opportunities such as e-commerce. He has also continued a close working relationship with the British Jaguar Land Rover Company. Ratan Tata has other duties both in India and abroad. For instance, he is a member and a contributor in the country’s Trade and Industry ministry. In addition, he is part of the jury of Pritzker Architecture Prize, which is considered an influential prize giving program for architectures. Globally, Ratan possesses key duties. For instance, he is a dean’s advisor at Harvard Business School. His significant contributions to the contemporary society has made earn numerous awards. In 2008, the Government of India awarded Ratan Padma Vibhushan, which is one of the highest civilian honors. Warren Buffett was born in Omaha, in 1930. He is among the three children of the late Congressman, Howard Buffett. Howard was a Nebraska businessman and a four-term Republican US representative. Warren began his education at Rose Hill Elementary School and after the family’s relocation to Washington D.C, Warren finished his elementary education and joined Alice Deal Junior High School. In 1947, he finished his high school studies at Woodrow Wilson High School. Warren loved mathematics and envisioned a future career in stockbroking. Warren had an early passion in business, which consisted of creating and saving money (Altucher 2005, p. 123). Buffett items such as Coca-Cola, chewing gum, and weekly magazines. He also worked in the grocery store of his grandfather. In high school, he invested in golf balls, stamps, and newspapers. As a high school sophomore, Buffett took a $35 deduction out of his first income tax return for a bicycle and watch. Buffett has a famous high school story of purchasing a pinball machine, which he put in a barbershop. After a few months, he owned numerous pinball machines in different barber shops. His interest in business coincided with a significant interest in the stock market. This explains why the then budding entrepreneur bought his first shares at age 11. In 1947, he joined University of Pennsylvania and transferred to University of Nebraska, where he graduated with a degree in business administration. He sought to study at Harvard Business School but he faced a rejection that made him opt for the Columbia Business School. He received a Master of Science in Economics in 1951. His interest in securities and finance made him attend the New York Institute of Finance. Buffett’s investment and entrepreneurial journey properly began and took shape at Buffett.Falk & Co where he worked as an investment salesman, from 1951 to 1954 (Miles 2004, p. 47). From 1954 to 1956, he worked at Graham-Newman Corp. From 1956 to 1969, he became a general partner at Buffett Partnership thereby graduating into Berkshire Hathaway Inc Chairman in 1970. It is crucial to highlight that Buffett envisioned a job at Wall Street but his father and Benjamin Graham turned his away from the idea. There are notable similarities and differences between Ratan Tata and Warren Buffett as entrepreneurs. Some of such differences emanate from the divergent contexts in which they built their businesses. For instance, Buffett belong to the second generation of entrepreneurs who emerged after the age of big business such as those of John Rockefeller. In turn, an individual entrepreneur had to invest in creativity and harness business relationships that would steer one’s company. This explains why Buffett opted for business types that required a great deal of creativity and data analysis. Buffett has chosen industries that involve considerable competition thereby demanding strategic planning in attracting and retaining the customers. In his security analysis business, Buffett expressed a great interest in Benjamin Graham’s ideas. On the other hand, Ratan Tata exists in the context of India’s large businesses that, sometimes, have to form intimate relationship with the government. Large businesses, since they require colossus capital to start, involve limited competition as they tend towards monopoly. It is essential to note that both Warren Buffett and Ratan Tata sprang from a family of accomplished businessmen. Howard Buffett was a politician who highly dabbled in business. Although he did not participate in the son’s entrepreneurial journey, he endowed his son with great formal and informal education. For instance, he had one advised Warren not to join Wall Street since such a job would have Warren dangerously comfortable. Similarly, Ratan Tata had a background in the family firm immediately after university. Such a raw experience might have enabled him to study details in management and entrepreneurship. In addition, the two entrepreneurs’ education might have played a great role in their foresight. Buffett had an early interest in mathematics that influenced his later pursuit for a degree in business. It is essential to highlight that Buffett participated in selective education as he opted to join Harvard School of Business. He later joined Columbia Business School for masters in Economics. In addition, he attended the influential New York Institute of Finance for a courses on security analysis. This led to his jobs on investment. For instance, from 1954 to 1956, Buffett worked as a securities analyst at Graham-Newman Corp. Similarly, Ratan received a top-notch education at Cornell University. In 1975, he enrolled for an Advanced Management Program at Harvard Business School. Buffett and Ratan’s education are similar in notable terms as well as influential on their career. Both Buffett and Ratan attended influential schools that might have explained their quest for big dreams. Such contexts might have influenced the entrepreneurs to have a distaste for mediocrity. In this sense, they could reach for goals higher than themselves. In addition, the entrepreneurs participated in selective education. Selective education, in this sense, means studying for skills that directly contribute towards one’s endeavors. Besides being business oriented, all Buffett’s courses involved mathematics. Similarly, Ratan might have studied structural engineering because such a course would be essential in the family’s steel business. In spite of the popular opinion that investors are individuals who have low opinion about formal education, these two entrepreneurs they first receive the education that would enable them undertake future tasks. Ratan and Buffett manifest a great appreciation for details and data. Such a great hindsight enables the entrepreneurs see into hidden flaws and make out patterns. For instance, Buffett made a consistent argument between the difference in the real value and the intrinsic value of stocks. He argued that noting the difference enables a person make comprehensive investment plan. Buffet and Ratan possess an analytical approach to management and exploiting opportunities. This extraordinary vision enables an entrepreneur to conduct long-term planning and foresee a distant future. In turn, it allows a company to rise gradually, as it pays attention to evolving data. Buffett believes in the different values of different types of investments that is essential in guiding an investor’s decision. Ratan and Buffett have formed businesses out of their passion. This explains why both of them offered to initially work at low-end jobs. Beginning their career at low end jobs made them harness practical experience. Buffett manifested a great preference for practical experiences in drawing lessons for future investment. He chose Columbia University because his favorite investment analysts, Benjamin Graham and David Hodd, were teaching there. These lecturers, especially Benjamin Graham, had his own firm that dealt with securities. Buffett admired Benjamin’s experience that he later opted to work for the security analyst. After working briefly for Graham, he taught other individuals the science of investing in securities. He particularly noted that working at the firm enabled him with hands on training that he could pass on to others. At a critical time in his career, he told Graham that he was willing to work for him for free. Ratan also began his career at Tata Steel’s shop floor (Iorg 2007, p. 78). His actual work involved managing blast furnace and shoveling limestone. Later, Ratan occupied management posts in various subsidiaries of the Tata Group before becoming the overall scenario. Both of these entrepreneurs cultivated their patience at jobs that did not entail management. This shows limited preoccupation with status in order to reach for a vision that is higher than oneself. Indeed, both Buffett and Ratan had an inherent vision that guided their consistency in most of their business endeavors. They, therefore, carry themselves with the attitude of employees rather than be preoccupied with the status that management entails. This also creates the capacity for sobriety that enables the observance of daily work that goes in a company. The entrepreneurs, however, differ in terms of their business choices. While Ratan’s success is built on the family business, Buffett built his own company from scratch. He realized that having one’s business could create a considerable space for creativity and expansion. Although Buffett had a wealthy father, from a young age, he was keen on building his own empire. This explains why he dealt in pinballs, cigarettes, and newspapers at his juvenile beginnings. In the New York Times, he stated that he does not promote the idea of dynastic wealth. This is because such wealth end up rewarding people who otherwise do not possess the talents to earn the same money in different circumstances. Such an opinion, however, seeks to address inequality and fair competition rather than examine the idea of entrepreneurship. His message seems to have alluded for an entrepreneurial environment that rewards creativity and individual efforts. Buffett’s involvement in business is a creative endeavor that he adores due to its intrinsic rewards rather for the mere material outcome. His fascination with figures to produce different results explains his extensive knowledge on matters of securities. Ratan, on the other hand, capitalized on the family’s business. He believed in steering the large Tata business towards a great outcome since he realized that the main challenge of such a business existed in the management rather than in the day-to-day operations. While Ratan’s involvement in business moves from the management end towards the entrepreneurial end, Buffett’s involvement in business moves from the entrepreneurial end towards the management end. In the beginning of his career, he manifested an interest in buying other companies’ stock. Buffett believed in the idea of intensive investment that relies on enhancing the profitability of current investments rather buy new investments. This differs from the idea of extensive investment that involves having different types of businesses under the same roof. Buffett, especially, had a great interest in manipulating stocks to achieve higher revenues. Buffett later changed tact over years as he started acquiring other businesses. Ratan, on the other hand, worked at many businesses within the Tata Group. The Tata Group has continually expanded from the initial Tata Steel Company to other diverse services such as telecommunication and hospitality services. This explains why he acquired firms such as Tetley, Jaguar Land Rover, and Corus. Buffett is a risk averse entrepreneur while Ratan Tata is a risk taker in business. Buffett has always been against the idea of investing in technological companies such as Facebook and Google. He argues that such companies possess considerable risks because they emanate from fads. Once the fads fade, the business can easily crumble. In addition, it is not easy to forecast the performance of such a firm. Buffett’s interest in data makes him a businessperson who values forecasting. His earlier experience at investment firms made him understand the value of stocks in the short-term and in the long-run. In turn, Buffett endorses the idea of investing in normal businesses. In this sense, a normal business refers to the kind of business that reflects the unending and inherent needs of people. Warren Buffett preferred the idea of his grandfather’s grocery store that had perpetual customers. Such businesses allows for forecasting and prediction of sales since it is easy to assess the behavior of customers. In addition, their results are usually concrete. It is easier to test the impact if processed food, for instance, on the population because it draws immediate feedback that could be essential in improving the quality of the product. Buffett seems to have drawn such lessons from Ben Graham. When many investors approached investment as a giant field, he opted for stocks that were cheap and devoid of risks. Ben Graham developed a business principle that insisted in buying products at low prices and enhancing their value to sell the same at premium prices. Warren Buffett, in speaking about cigarettes, said that he prefers in investing in the same because it allows the dealer to make the cigarette at low costs and sell the same at a slightly higher price that is affordable to the consumer. Since the product is addictive, the consumer constantly buys the product thereby granting constant revenues to the respective company. A close examination of Warren’s businesses reveal this trend. Berkshire is a conglomerate of businesses in confectionery, home furnishings, vacuum cleaners, retail, newspapers, and jewelry. Its subsidiaries consists of the Dairy Queen type that is a chain of fast food all over the world. Due to this outlook, Berkshire Hathaway markets its goods to all over the world. Buffett has invested in taking up companies with proven track record. The Coca Cola Company, for instance sells its products all over the world. Besides, these products can be purchased by customers in different income classes. This is unlike the model of Tata’s business that only sells its products to a particular set of customers. The steel business targets large firms that participate in the production of items such as cars. Such items cannot acquire purchases on a daily basis. When Ratan Tata joined the family business in 1990, he made key changes that transformed the direction of the company (Tiwari 2009, p. 98). Tata believes in expanding and exploiting new opportunities. This is necessary since family businesses tend towards conservatism as family members require a particular patterns of doing things. Most analysts note that this behavior is related to the idea of socio-emotional value that family members attach to their business. This has impeded the growth of such companies as managers invest in limited objective thinking. Ratan Tata, therefore, managed the company as a hired professional since he had a larger vision than that of the immediate family. More essentially, the manager geared the company towards the international scene. In the world’s business arena, Western foreign companies dominate other countries while it is difficult to find foreign companies dominating the Western countries. By dreaming to acquire a foreign company such as Tetsi, the company made a breakthrough in risk-taking. Tata, in its current state, constantly evolves to take advantage of new opportunities such as the internet and green business. It is difficult to predict the direction of such an entity since it practices flexibility. For instance, the Tata Group adopted divergent businesses that are difficult to manage in the case of unfocused management. The company currently combines large businesses such as steelmaking with softer ones in the examples of hotels and beverage making. While Ratan focused on the softer side of business such as personal relations, Buffett focuses on the raw part of the business. Tata began his management tenure by focusing on issues such as internal relationships. Since there was significant discord in the company, he worked to recreate harmony. He believed that success could only occur if everyone in an entity worked towards a common goal and shared a similar vision. In addition, the entrepreneur worked on Tata’s brand. He explained that in as much as the company had a significant reputation, it lacked a brand. According to him, a brand involves the image of oneself that an individual portrays to others. For instance, Ratan steered Tata from its conservativeness to building a brand built around the youth. Ratan realized that in order to exploit the prospects of a market, a company had to build a robust philosophy and create a proper relationship with key stakeholders such as the customers. More essentially, both of these businessmen are social entrepreneurs. As social entrepreneurs, they possess different involvements apart from profit making. Buffett has continually offered investment lessons to the general public. On issues of ethics and inequality, Ratan and Buffett constantly addresses the abhorrent idea of few rich people in the society with the rest of the population becoming increasingly poor. Buffet has usually supported the proposal of richer people facing more taxes in order to redistribute their huge wealth to the rest of the population. Similarly, Ratan has offered consistent advice against misuse of wealth and ostentatious consumption by wealthy people. Ratan currently occupy various educational boards that offer lessons in steering business courses and improving industry standards. He has also fought to restore the standards of human dignity by using slogans that fight racism. Ratan’s phenomenal idea of the people’s car led towards the production of Tata Nano. Bibliography Altucher, J., 2005, Trade like Warren Buffett, John Wiley & Sons, Hoboken. Glanz, J 2002, Finding your leadership style: a guide for educators, Alexandria: ASCD. Greenstein, F. I 2009, The presidential difference: leadership style from FDR to Barack Obama, Princeton University Press, Princeton. Griffin, R. W., & Moorhead, G, 2010, Organizational behavior: managing people and organizations, South-Western/Cengage Learning, Australia. Gupta, S 2008, Managerial skills: exploration in practical knowledge, Global India Publications, New Delhi. Hunsaker, P. L., & Hunsaker, P 2004, Management: a skills approach, Pearson Prentice Hall, Upper Saddle River. Iorg, J 2007, The character of leadership: nine qualities that define great leaders, B&H Pub. Group, Princeton. Joseph, P. T 2007, EQ and leadership, Tata McGraw-Hill, New Delhi. Maxwell, J. C 2007, The 21 indispensable qualities of a leader: Becoming the person others will want to follow, T. Nelson, Nashville. McGrath, E. H. S 2009, Basic managerial skills for all, PHI Learning, New Delhi. Miles, R. P., 2004, Warren Buffett wealth: principles and practical methods used by the worlds greatest investor, John Wiley & Sons, Hoboken. Pisapia, J 2009, The strategic leader: New tactics for a globalizing world, Charlotte, Information Age Pub, Charlotte. Rudani, R. B 2013, Principles of management, McGraw Hill Education, New Delhi. Tiwari, P. M 2009, Pride of the nation, Ratan Tata, brand ambassador of India on international stage, New Delhi, Diamond Pocket Books, New Delhi Witzel, M 2010, Tata: The evolution of a corporate brand, Penguin Portfolio, New Delhi. Read More