The functionalist approach to entrepreneurship is a study of market stability to do business–a profound to deal with.
‘I wasn’t sleeping. I was dreaming of success,’ says the comedian Trevor Wallace in his popular Youtube Video on people who have ‘entrepreneur’ on their social media bios. These wannabe entrepreneurs rarely deliver. Also, they are present everywhere! You can spot them in the middle of a crowd in your college, convincing people to drop out and ‘work on their business models.’ (Yes, we are talking about you, Mursaleen!)
But, if you are ready to dig deep into markets, actually making a win-win deal, then read below about one of the 2 broad approaches to be an entrepreneur. If not, then read either way.
1. ‘Two words: Entre, Preneur, Ship,’ says Trevor Wallace in the same video. The field deals with the creation and extraction of value. It is the ability to develop and run a business to make a profit. In simple terms, entrepreneurship is the starting of new businesses.
2. There is no fixed approach to being an entrepreneur. It varies from entrepreneur to entrepreneur. But, it falls into two broad categories- The Functional approach and the Processual approach. This blog will focus on the Functional Approach to Entrepreneurship. For the Processual Approach, click here: (insert the link to the “processual approach to entrepreneurship” blog).
3. To sum up, the functionalist approach to entrepreneurship ‘defines an entrepreneur precisely by what they do.’ Emphasis is on their role in society and the end product rather than their modus operandi.
4. It is based on the theories of Functionalism by Emile Durkheim. It studies each part of society, its functions, and how they aid in keeping the community ‘stable’.
5. The driving force behind Functionalism is the idea that everything in the universe strives towards equilibrium. This, in fact, is a social application of one of the most predominant laws in Chemistry.
6. At first glance, it may seem weird to say that something as volatile as a society can reach equilibrium. Khan Academy on Youtube describes this with a great example. The changes that small businesses make in their strategies in response to something that a big company, like Amazon, for instance, does to cater to customers is the principle behind Functionalism.
8. Functionalist entrepreneurs study market trends and change their strategies accordingly. Businesses usually follow this approach are educational institutes, law firms, shopping complexes, or any other institutions vital for society’s sustenance.
9. A volatile and variable market is, for this approach, a double-edged sword. While it also helps it maintain its relevance, it is also its biggest weakness. It is impossible to always correctly predict the direction in which the market will go. This sometimes means incurring losses even when all the studies and data pointed towards profit.
The functionalist approach of entrepreneurship focuses more on the Institution instead of the Individual. It also doesn’t take into account the effects of social changes and conflict on societal equilibrium. This works in its favour, as whenever conflicts arise, functionalist businesses adapt only so much as required to maintain equilibrium. As mentioned once before, it is vital for the necessary institutions of society such as educational institutions, law firms, shopping complexes etc.
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I am Rakshit Aswal, a recent graduate of English Hons. from University of Delhi. I like to play videogames and read books while on my pursuit to experience amazing stories.