research, and determining suitability of the
property.
Ownership and management involves such concepts
as administrative organizational structure, staff
ing, front of the house operations, and back of
the house operations.
Entrepreneurship has become a major force in
the global economy this is especially true in the
hospitality industry and, more specifically, the
restaurant and foodservice sector. Viewed from
the perspective of workers as a form of on the
job training in itself, restaurants and the foodser
vice industry can constitute an apprenticeship
providing a springboard for entrepreneurship
rather than relegation to a career of low paid
work. Such a springboard suggests that an entre
preneur who is willing to take risks can overcome
many of the barriers to entry inherent in non
foodservice operations and become successful
without formal education. In fact, Smith and
Miner (1989) defined two typologies of entrepre
neurs according to personality, background, and
behavior: craftsmen entrepreneurs and opportu
nistic entrepreneurs. These two types of entrepre
neurs display many opposite personality qualities
in their behavior and orientation.
Craftsmen entrepreneurs usually lack formal educa
tion in the field, lack depth in managerial experi
ence, and have blue collar backgrounds. They
often enjoy being immersed in operations and
doing planning and administrative work.
Craftsmen typically are not concerned about
social involvement, may lack social awareness,
and do not interact or communicate effectively.
Craftsmen usually prefer autocratic management
styles by giving orders and making decisions
without regard for others’ input. Such entrepre
neurs have a high aversion to risk taking and
display a high degree of rigidity and lack confi
dence. Businesses led by craftsmen usually oper
ate without long range plans and typically
experience low growth rates. Craftsmen measure
their success by customer satisfaction and are
usually content with making a comfortable living.
Opportunistic entrepreneurs often have a high level
of formal education, bring an extensive variety of
management experience to a job, and come from
middle class backgrounds. These entrepreneurs
prefer democratic, decentralized management
styles and emphasize marketing efforts.
Opportunistic entrepreneurs are highly socially
aware and are very much involved in social rela
tionships. They tend to be trend oriented in pre
dicting the future of their organizations. The key
measures and indicators for success include
profit, personal income, and business growth.
Even as research on entrepreneurs is increasing,
there remains considerable variety in the defini
tions and criteria used to determine entrepre
neurial status. Among the criteria used to
differentiate entrepreneurial organizations from
others are that the organization is typically 2 8
years old and has 2 19 employees.
Bygrave and Zacharakis (2004) estimate that
some 460 million people worldwide were either
actively involved in entrepreneurial ventures or
were owner managers of a new business in
2002. Pertaining to these millions, what factors
differentiated the successful from the unsuccess
ful? In general terms, those entrepreneurs who
most accurately identify an opportunity offer
the most promise. Yet these people realize success
in their ventures only if they can create organiza
tions, restaurants, for example, that allow the
concept to tap successfully the target market.
In more specific terms and with direct implica
tions for restaurateurs, there are two success
factors that are critical. The first is planning. As
Rainsford and Bangs (1992) note, lack of plan
ning is the major reason leading to failure in
the restaurant business. This includes business
and strategic planning.
The second critical success factor is capitaliza
tion. In reviewing bankruptcy filings made by
unsuccessful restaurant operators in the USA,
the most common problem operators reported
was undercapitalization. Despite a rule of thumb
that restaurateurs should be prepared to operate
with a negative cash flow for up to 6 months after
opening, many believe that they will not face the
same challenges as others.
Most venture capital investors agree that the
opportunity at the core of any entrepreneurial
activity must be evident enough to justify an
investment but not so obvious that too many
will enter the market at the same time. This is
a difficult situation. After all, too ambiguous an
opportunity may result in poor planning and
lack of investor interest. Perhaps Mark Twain
articulated the entrepreneur’s bane best: ‘I was
210 Environmental determinism
seldom able to see an opportunity until it had
ceased to be one.’
References
Bygrave, W. D. and Zacharakis, A. (Eds.). (2004).
The portable MBA in entrepreneurship. Hoboken,
NJ: Wiley & Sons.
Rainsford, P., & Bangs, D. H. (1992). The Restau-
rant Planning Guide. Chicago: Upstart
Publishing.
Smith, N. R., & Miner, J. B. (1989). Type of
entrepreneur, type of firm, and managerial
motivation: implications for organizational
life cycle theory. Strategic Management Journal,
4, 225 240.
E D WA R D A . M E R R I T T
C A L I F O R N I A S TAT E P O LY T E C H N I C
U N I V E R S I T Y, U S A
DENNIS REYNOLDS
WA S H I N G T O N S TAT E U N I V E R S I T Y, U S A
kinds of minor employee initiated improvements
both in products and processes that continue to
be in the organization’s control and ownership.
In contrast, intrapreneurship also incorporates
strategic moves such as spin offs, characterized
by relatively low levels of control and ownership
of the organization over the new operation
(Morrison, Rimmington, & Williams, 1999).
References
Brymer, R. (1995). Hospitality Management: An
Introduction to the Industry. Dubuque, IA:
Kendall.
Morrison, A., Rimmington, M., & Williams, C.
(1999). Entrepreneurship in the Hospitality, Tourism
and Leisure Industries. Oxford: Butterworth
Heinemann.
SIGAL HABER
T E L - AV I V U N I V E R S I T Y, I S R A E L