An analysis of Timmons' model for entrepreneurial process


Research Paper (postgraduate), 2013
10 Pages, Grade: Distinction

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Table of Contents

1.0 Introduction

2.0 Literature review
2.1 The Timmons model of Entrepreneurial process
2.2 Other Models and Frameworks regarding the entrepreneurial process
2.2.1 A model of entrepreneurial process (By Moore, 1986)
2.2.1.1 Comparison with the Timmons Framework
2.2.2 Shane’s model of the entrepreneurial process
2.2.2.1 Comparison with the Timmons Model of Entrepreneurial Process

3.0 Critical analysis: The Timmon’s Model of the Entrepreneurial Process
3.1 Opportunity and new business Idea:
3.2 Less focus on initial investment:
3.3 Consequence of less focuses on initial investment on team building:

4.0 Conclusion

5.0 List of References:

1.0 Introduction

This report includes the complete and in-depth analysis of Timmons framework of the entrepreneurial process. Literature review can give the solid overview of the research on a specific topic (Kate, 2008). Hence, in the light of literature review and research conducted by various authors, this report focuses on the comparison of Timmon’s model with; a model of entrepreneurial process by (Moore, 1986) and entrepreneurial process model by (shane, 2003). This report also focus on highlighting the differences between Timmon’s model and other two entrepreneurial process models based on literature and research work of various authors. While conducting the research, the researcher found the differences among the entrepreneurial models, which can be taken into account while selecting any particular entrepreneurial model for the new business venture.

Similarly, this report also focuses on the critical side of the entrepreneurial model proposed by Timmons. The purpose of writing critique is to evaluate somebody’s work, in order to increase the readers understanding of it (southeaster uni, 2013). Hence, in order to increase the understanding of the Timmons model of entrepreneurial process, researcher have critically examined the model in the light of literature, writings and research work done by various researchers on the Timmons model. While conducting research and examining the critical aspects related to the Timmons framework, researcher found many critical points in the light of literature and research work of different researchers, which can cause problem to the entrepreneur while implementing this model on any specific new venture.

2.0 Literature review

This section of the assignment focuses on the discussion of the Timmons model in the light of the writings of different authors. This section at first focuses on discussing the key features of the Timmons model and afterwards it focuses on the alternative theories and models regarding entrepreneurial process proposed by different authors.

2.1 The Timmons model of Entrepreneurial process

The Timmons model of entrepreneurship process helps to understand, analyse, identify and evaluate the potential venture (Maria et al, 2007).

Figure 2.1 The Timmons model of Entrepreneurial Process:

illustration not visible in this excerpt

As shown in the figure 1.1 above, The Timmons model of Entrepreneurship process considers opportunities, team and resources as the three important factors and concludes that the success of an entrepreneur depends upon the ability to balance all these three factors (Poerwowidagdo & Ghee, 2009).

Timmons Model clearly states that the process of the opportunity identification, evaluation and exploitation must be balanced by resource acquisition and team development (Maria et al, 2007). Timmons model emphasise on the balance among three elements described in the framework. It is very important to understand the balance between opportunities, team and resources, as it leads to the success of a particular entrepreneur project and process (Maria et al, 2007).

2.2 Other Models and Frameworks regarding the entrepreneurial process

Here are some of the other models regarding entrepreneurial process. These models highlight the key factors which are important in order to the successfully implement the new venture.

2.2.1 A model of entrepreneurial process (By Moore, 1986)

According to (moore, 1986), there are four cycles which are very important in entrepreneurial process. The four cycles are as follows:

- Innovation
- Triggered Event
- Implementation
- Growth

Figure 2.2 A model of entrepreneurial process (Moore, 1986)

illustration not visible in this excerpt

Source: Bygrave (2003).

This model provides a transition from social scientific perspective to the entrepreneurship and then to the management (Bygrave, 2003). This model offers a lot of insight into the entrepreneurial process and highlights an activity and function based perspective that is crucially important for the success of the entrepreneurial process. As shown in the figure 1.2, it focuses on the innovation, implementation of the triggered innovative idea and then at last the growth of the business.

2.2.1.1 Comparison with the Timmons Framework

In the Timmons framework; opportunities, team and resources are the most important elements of the model (Maria et al, 2007). While considering, a model of entrepreneurial process proposed by (Moore, 1986), many other elements and activities are taken into consideration in addition to the activities discussed in the Timmons model such as; implementation and growth of the business, as it shown the in figure 1.2 above. According to (bygrave, 2004) personal, environmental and social factors give birth to a new organisation. In the light of the literature review and comparison of entrepreneurial process models proposed by (Timmons, 1990) and (Moore, 1986), it can be concluded that Timmons framework, misses the social perspective to the entrepreneurship. As the change, innovation and unique ideas are the heart of the Timmons model and can be triggered from personal thoughts and market analysis only (Timmons et al, 1990). , in addition to these two activities proposed by (Timmons, 1990), (Moore’s,1986) model focuses on social and environmental factors as well, which can help in triggering a new idea and change, as it can be seen figure 1.2 above.

2.2.2 Shane’s model of the entrepreneurial process

According to (Shane, 2003), the entrepreneurial process involves the evaluation and identification of opportunity, the decisions regarding the exploitation of the opportunity, efforts to arrange and obtain any particular resources and development of strategy to execute the new venture. Below is a figure of Shane’s entrepreneurial process.

Figure 2.3 Model of the entrepreneurial process by (Shane, 2003)

illustration not visible in this excerpt

Source: Torrika, 2011

According to (Shane, 2003) people discover opportunities that others do not see because; they have better access to the information about existence of the opportunity, id-depth previous life experiences and better social life circle. After discovering the opportunity, individuals exploit it on the basis of their specific demographics and psychographics and environmental factors influencing their decision (Shane, 2003). In order to execute the opportunity found, individuals form strategies related to organisational design (Shane, 2003).

2.2.2.1 Comparison with the Timmons Model of Entrepreneurial Process

The Timmons model of entrepreneurial process has three key elements; opportunity team and resources, which must fit together and should be properly aligned in conjunction with each other in order to make the business plan successful (Timmons, 1990). While on the other hand, Shane’s model of the entrepreneurial process states that entrepreneurial opportunities depends upon the individual psychological and demographical factors as well as the environmental factors, which leads to the discovery and exploitation of the opportunities and execution of the final organisational design strategy. Based on the theoretical study and literature overview related to the Timmons and Shane’s models of entrepreneurial process, it can be concluded that; Timmon’s model focuses on the fit and balance between the all activities, which are highlighted by (Timmons, 1990) in the model, to make the whole process successful. Contrary to this, (Shane, 2003) in his model argues that; entrepreneurial opportunities arise from individual as well as environmental factors, which lead to discover exploit opportunities and execute the whole business plan in a successful manner (Torrika, 2013).

3.0 Critical analysis: The Timmon’s Model of the Entrepreneurial Process

This section focuses on the critical analysis related to the Timmons model of the entrepreneurial process and highlights the critiques and weak points in the model based on the literature and research work of various authors.

3.1 Opportunity and new business Idea

The central idea of Timmons framework of the entrepreneurial process is the opportunity (Mitini, 2007). Timmons model put high emphasis on being creative and finding a business opportunity to exploit. This is the weak point in the model, which can distract the entrepreneurs and make with waste their time running after unique ideas to start their business. The biggest misconception about a business idea is that it must be unique, almost any business idea an entrepreneur have will also have occurred to any other entrepreneur (Bygrave, 2003). Almost every 100 ideas presented to the financer in the form of business plan or proposal usually 1 or 2 of them get funded (Poerwowidagdo & Ghee, 2009). Over 80 percent of the business plans are rejected in the first few hours, 10 – 15 percent are rejected after their investors read them and less than 10 percent attract investors to get funded (Poerwowidagdo & Ghee, 2009). Entrepreneurs are running after unique ideas and business plans which get them nowhere and they waste their time (Doerr, 1997). Hence, from the study of literature and arguments of various authors, it can be concluded that; finding a new business opportunity is not important as it has been the most important and critical part of the Timmon’s framework of entrepreneurial process.

3.2 Less focus on initial investment

According to (Timmons, 1990) amongst untried entrepreneurs is that all resources must be in place especially cash. In short, thinking cash first is often to the demise of the new venture (Timmons, 1990). On the other hand, (Timmons, 1990) says that, there should be complete balance among the activities discussed in the model. In order to create and maintain balance between all the activities such as; opportunities, resources and team, equal emphasis should be given to all the activities. Even if entrepreneurs put great emphasis on getting their new ventures funded, it is almost impossible for them to get finances. According to (Poerwowidagdo & Ghee, 2009), it is very difficult for entrepreneurs to get their new ventures and business plans funded. According to (Adams and Stephen, 2012) at start it is very difficult to create balance between all the opportunities at start. Here is a figure, which shows the imbalance at start-up of the business.

Figure 3.1 Imbalanced model at start-up due to less focus on resources.

illustration not visible in this excerpt

Source: Adams and Stephen, 2012.

From the figure 2.1, it can be concluded that, less focus on resources creates the imbalance in the entrepreneurial process. Hence, in order to have the balance among all activities, equal emphasis should be given to all of them.

3.3 Consequence of less focuses on initial investment on team building

At the apex of the new venture it is not a single entrepreneur; rather there is an entrepreneurial team that drives the start-up and growth of the new venture (Timmons, 1990). The Timmons model depicts a holistic entrepreneurial process. It connects opportunity, team and resources. An impact on any of the driving forces necessarily affects the other dimension of the process (Timmons, 1990). As it has been discussed earlier in the heading 3.2, giving less emphasis to the resources and initial investment can create imbalance in the system and can affect the other dimensions as well.

In the figure 3.1 above, (Adams & Stephen, 2012) have highlighted the affect of less emphasis on the team. As (Timmons, 1990), argues that an expert and great team is essential for the success of a new venture. As shown by (Adams and Stephen, 2012), in figure 3.1 less emphasis can lead to get a weak team which can ultimately lead to affect the overall business plan and hence can result in failure of the whole new venture, as Timmons model of entrepreneurial process follows the holistic approach and all of the elements in the model are dependent upon each other.

4.0 Conclusion

This report has focused on the examination of Timmons framework for the entrepreneurial process, in the light of literature and research conducted by different authors. At first, Timmons model is compared with the Moore’s model of Entrepreneurial process. While comparing it was examined that; innovation and unique ideas are the heart of the Timmons model and can be triggered from personal thoughts and market analysis only (Timmons, 1990). While on the other hand, Moore’s model of the entrepreneurial process focus on the environmental and social activities as well in addition to personal thought and environment (Moore, 1986). Similarly, in the Moore’s model of the entrepreneurial process; environmental, social, personal, organisational and social factors have influence on the business process from innovation of the idea to the implementation, execution and growth of the business (Moore, 1986).

While comparing Timmons model with (Shane’s, 2003) model for the entrepreneurial process, it was concluded that; The Timmons model of entrepreneurial process has three key elements; opportunity team and resources, which must fit together and should be properly aligned in conjunction with each other in order to make the business plan successful (Timmons, 1990). Contrary to this, (Shane, 2003) in his model argues that; entrepreneurial opportunities arise from individual as well as environmental factors, which lead to discover and exploit opportunities and execute the whole business plan in a successful manner (Torrika, 2013).

On the other side, critical analysis of the Timmons framework on entrepreneurial process is conducted by the researcher in the light of research conducted by various authors and scholars. It was concluded that; Timmons framework focuses on the fit and balance between all the activities of the model, as portrayed by (Timmons, 1990) in the model. Giving less emphasis to one activity can create uncertainty in the whole entrepreneurial process and can cause new business venture to fail. Thinking cash first is often to the demise of the new venture (Timmons, 1990). (Adam and Stephen, 2012), showed the imbalance in the whole entrepreneurial process by not focusing on initial investment, which leads to acquiring a weak team and hence to the failure of the whole process. Similarly, Timmons has focused a lot on the new idea generation and filling market gap. Entrepreneurs keep on finding new idea and not get their business proposals financed, when they present them to the financer (Poerwowidagdo & Ghee, 2009).

It can be concluded in the light of literature review and research conducted by different authors, there are differences among different models when compared to the Timmons model of entrepreneurial process. Similarly, there are ample amount of critiques are conducted by scholars and authors on Timmons model for entrepreneurial process. So in conclusion, any specific model is not right or wrong; every entrepreneurial process model has its own benefits and disadvantages, which can be taken in to consideration while selecting the model.

5.0 List of References

Adam & Stephen (2012), ‘ New Venture Creation: Entrepreneurship for the 21st Century ’, NewYork. McGraw Hill. Pp. 88-95 [Online] Available at: http://agora.unimet.edu.ve/docs/466/Detecci%F3n%20de%20una%20oportunidad/Modelo%20de%20Timmons/Modelo%20de%20Timmons.pdf [Accessed: 11 December, 2013].

Doerr, J. (1997). Start-up manual, Fast Company, February – March, P. 82-84.

Kate (2008 ) Literature review [Online] Available at: http://library.stkate.edu/pdf/litreview.pdf [Accessed: 12 December, 2013].

Moore, CF (1986), ‘Understanding the Entrepreneurial Behaviour: A Definition and Model’, Academy of management best papers proceedings, pp. 66-70, Business Source Premier, Ebsco Host, [online] Available at: http://web.ebscohost.com/ehost/detail?vid=3&sid=34c90ce1-b618-4de8-ae8c-ac8a708efaa7%40sessionmgr4002&hid=4107&bdata=JnNpdGU9ZWhvc3QtbGl2ZQ%3d%3d#db=buh&AN=4978712 [Accessed: 10 December, 2013].

Mtini, Maria , 2007. Entrepreneurship: The Engine Of Growth. 1st ed. United States: Praeger Publishers. [Online] Available at: http://books.google.co.uk/books?id=zw-4o0rKZkAC&pg=RA1-PA13&lpg=RA1-PA13&dq=Timmons+Model+of+Entrepreneurship+criticism&source=bl&ots=z63WC4kSZn&sig=pnFDFkRAzN5Bc8KDeP9SuNQ7g48&hl=en&sa=X&ei=1HytUpHIJsithQflmYGoBg&ved=0CFAQ6AEwBA#v=onepage&q=Timmons%20Model%20of%20Entrepreneurship%20criticism&f=false [Accessed: 10 December, 2013].

Poerwowidagdo. J.S. & Ghee (2009), ‘ Entrepreneurial Logistics: An Application of Timmons Model in the Mini Business Project For Undergraduate Business Student ’ [online] Available at: http://umkeprints.umk.edu.my/115/1/Paper%201.pdf [Accessed 11 December, 2013].

Shane, S. (2003) A General Theory of Entrepreneurship. The Individual-Opportunity Nexus. Cheltenham, UK: Edward Elgar.

Southern University (2013) Critical Analysis [Online] Available at: http://www2.southeastern.edu/Academics/Faculty/elejeune/critique.htm [Accessed: 10 December, 2013].

Timmons et al (1990) The Timmons Model of the Entrepreneurial Process [Online] Available at: http://www.unifi.it/offertaformativa/allegati/uploaded_files/2010/200052/B005871/parte%203.pdf [Accessed: 9, December, 2013].

Torrika, J. (2011 ). Exploring Various Entrepreneurial Processes of the Franchisee Training Program Graduates: Empirical Evidence from a Longitudinal Study [Online] Available at: http://emnet.univie.ac.at/uploads/media/Torikka_05.pdf [Accessed: 11 December, 2013].

William. D. ByGrave (2003) THE ENTREPRENEURIAL PROCESS [Online] Available at: http://catalogimages.wiley.com/images/db/pdf/0471271543.excerpt.pdf [Accessed: 9, December, 2013].

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Details

Title
An analysis of Timmons' model for entrepreneurial process
College
Cardiff University
Course
MBA
Grade
Distinction
Author
Year
2013
Pages
10
Catalog Number
V308659
ISBN (Book)
9783668072589
File size
795 KB
Language
English
Tags
Timmons, entrepreneurial process
Quote paper
Ali Hammad (Author), 2013, An analysis of Timmons' model for entrepreneurial process, Munich, GRIN Verlag, https://www.grin.com/document/308659

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