Entrepreneurship In South East Europe

Developing countries do not have the competitive advantage in the market place with their cheap products/services and cheap labour force. They cannot compete with the mass production from China, India and other fast developing countries. These competitors are coming from the other side of the world and offer to the European and USA markets goods and services below the local production costs. Therefore, the developing countries have to adapt new pillars in order to establish their products and to gain recognition on a global scale and, even, to survive the pressure from globalization. One of them is the entrepreneurship, process of identifying opportunities and putting useful ideas into practice. It is believed that the impact of entrepreneurship in the 21st century will be equal or greater then what the industrial revolution had in the 19th and 20th century.

Entrepreneurship is the practice of starting new organizations or revitalizing mature organizations, particularly new businesses generally in response to identified opportunities. Entrepreneurship is often a risky undertaking, depending on the type of organization that is being started. Entrepreneurship ranges in scale from solo projects to major undertakings creating many job opportunities.

The entrepreneurs build their global presence on niche markets due to their limited competitive scope and specialized skills. This enables them to coexist with large enterprises that build their competitive advantages mainly on economies of scale, economies of scope or on the learning curve. Medium companies usually finance their operations with funds provided by the family and by using internally generated funds. Due to information asymmetry problems between owners/managers and potential external debt or equity investors, internal resources are preferred over external and debt over equity financing.

Important characteristic of these companies is that their ownership, managerial and leadership functions are usually embodied in one person. The entrepreneur - owners are usually transformational leaders, which maintain close connection with employees compared to large companies. Often entrepreneurs are contrasted with managers and administrators who are said to be more methodical and less prone to risk-taking. Such person-centric models of entrepreneurship have shown that are not valid because in real life entrepreneurs rather operate in teams rather than as single individuals.

Family involvement is limited to provision of risky capital, usually in combination with other investors. The management model in medium enterprises is so called illuminated paternalism, where the usage of human and physical capital is much more intensive compared to large enterprises. The negative side is that often exist a not very fortunate division of responsibilities between entrepreneur-owner and the other employees. This is a result of the companies’ limited resources that do not allow companies to form a divisionalised organisation with different management levels that could systematically evaluate business opportunities. If the attachment of the entrepreneur-owner to the company is very strong, that could also lead to difficulties like owner’ physical ageing, potential lack of heirs, and fight for different positions among family members are some of them.

The result is often a lack of teamwork, inadequate and not timely manner of decision-taking and finally organisational rigidity of the company

Development of the private sector is one of the main priorities for creation economic