The small entrepreneurial firms and the larger firms and their Essay

The small entrepreneurial firms and the larger firms and their characteristics - Essay Example The essay discusses that product or service innovation has become an integral part of almost every business these days. Most of the firms implement several strategies to improve their product range through renovation of the existing products and services to satisfy the customers. Fundamentally, product innovation or service innovation refers to the process of introducing certain new goods or products and services or the process of modifying the existing products or services to retain the present consumers or to attain certain new customers. Entrepreneurial firms are the firms which are being established by an individual or more than one individual. The owners of the entrepreneurial firm are comparatively more flexible to take strategies and make decisions regarding specific matters than the larger firms. The owners of the entrepreneurial firms are known as the entrepreneurs. These entrepreneurs are free to choose their business process and financial statistics. These entrepreneurs ar e accountable for the profit and loss of their business. An entrepreneurial firm can be a family joint venture or non family venture, where the partners are equally responsible for the profit and the loss of the company and all the partners have the equal rights to take part in any kind of decision making process. The larger firms have more exposure than the small firms with the greater amount of capital, large number of manpower, improved technology and definitely huge brand recognition in wider range among others. The large firms are either the advanced form of the small firms or these are the firms which have been established with higher amount of capital or finance in hand. These firms involve large number of investors and shareholders, who have the right to take decisions in the business matters (Kerzner, 2009). The major objective of the study is to highlight the small entrepreneurial firms and the larger firms and their characteristics. The paper would also include the advant ages and disadvantages faced by a small entrepreneurial firm while making innovation in terms of their products and services over the larger firms. There would be a summative conclusion for the overall discussion. Advantages and Disadvantages of Small Entrepreneurial Firms in Innovation of Products and Services Entrepreneurial firms are the sources of opportunities where an individual or more than one individual can explore the facilities available, according to their own determined ways. Entrepreneurial firms give the owner the independence to think, to plan and to execute the plans according to the requirement. The small entrepreneurial firms are more flexible to make decisions and to choose various strategies regarding the need of the business. The entrepreneurial firms do not involve too many investors or shareholders, and they include a simple managerial structure with less possibility of hierarchy system (Hughes, n.d.). In the present scenario, most of the firms and companies are focusing on innovation of their products and services. Innovation provides the firms with the opportunity of exploring their potential and the scope of retention of the customers. The small entrepreneurial firms are more probable to make innovation of products and services as they involve a simple managerial structure and the decision making process