Freedom to undertake and economic development

The discussion of which institutions lead to human prosperity is present in many areas of knowledge. In the history of economic thought, from Adam Smith to Hayek, Mises and Friedman, prominent thinkers argue that institutions of the market economy, such as well-defined property rights, limits of government performance, taxation, and free trade, create favorable conditions to progress. In this context, entrepreneurs act as agents of change or, as Schumpeter argues, of the creative destruction that fosters innovation. Entrepreneurship, favored by economic freedom, has the power to boost the prosperity of market economies.

Ludwig von Mises highlights the entrepreneur's role in economic development, given that the future can not be accurately predicted. Driven by speculation about the uncertain future, the entrepreneur promotes innovation. The Austrian School of Economics considers that in addition to dealing with uncertainty, the entrepreneur generates and uses the dispersed knowledge, and economic growth requires that one step forward towards the unknown. In this sense, Friedrich August von Hayek understands that economic progress has business competition as a basis of support, since competition causes the search for economically more efficient production devices.

Finally, entrepreneurship can be seen as a human quality with the potential to provide opportunities for the economic development of an entire nation. Among the countries with the greatest economic development in the last decades, the amount of opening up of new businesses and the creation of value provided by innovation in existing businesses result in benefits to the quality of life of the population.

The connections between economic freedom and prosperity and between entrepreneurship and development have been established in recent studies and research. Through them, one can also establish the link between freedom and entrepreneurship, beginning with the semantic relationship itself. Entrepreneurship is a term that has its etymological origin in Latin: in prehendo, whose closest meaning is to perceive or discover something. In this sense, entrepreneurship stems from the alertness and desire to improve and improve a person's life, which only flourishes in an adequate institutional environment.

In the present context, to undertake means to make it happen. Entrepreneurship is a behavioral characteristic, a set of attitudes driven by a worldview guided by the quest to do something new, with the goal of generating wealth and, therefore, contribute to the development of society. From the initiative of opening a new business to acting to keep it continually innovating, there are examples of the benefits of entrepreneurial action to human development. Solutions offered by companies like Google, Amazon, Microsoft, Apple, Tesla, Facebook, Uber and many others radically and continuously change people's way of life. This change stems from initiatives of those who went beyond the conventional.

Entrepreneurial behavior at work stems from a process that can be managed. When this behavior is present in an organization, there are reflexes in its tendency to innovate and to develop continuously. A systematic renewal in the procedures that move the organization instigates innovation.

The behavior of people at work results from their initiatives and the conditions that are offered to them. Managing these conditions should consider answers to questions such as: What motivates people to attend work? Are they satisfied with their work and pride themselves on doing their best? Do they realize the benefits of what they produce proportionate to themselves and others? Or do they see their work as a burden and work exclusively for pay?

Social psychologist Douglas McGregor has identified that leaders' beliefs about what motivates their commanders may affect the style adopted for leadership exercise, it is assumed that when people are viewed as being unmotivated and disliked by their work, it is It is likely to resort to an authoritarian style, with strict supervision over the tasks to ensure that they are done properly. If, however, the leaders are seen as the ones who take pride in their work and see it as a challenge, a participatory and liberal style tends to be adopted as an exercise of trust in people's willingness to actually produce on their own initiative what they wait.

In organizations where leadership is predominantly authoritarian, work can be repetitive and people move through a rewarding and punitive approach with multiple levels of managers and supervisors in their framework to supervise and direct workers. When an optimistic and positive opinion about people prevails, it is more common to resort to a decentralized and participatory leadership process, with a collaborative, trust-based relationship between the leaders and the members of their team, encouraged to develop their skills and suggest improvements.

It is thus believed that it is possible to achieve entrepreneurial and innovative behavior in an organization when stimulating the initiative and minimizing structural links, encouraging freedom of action as a condition for innovation. In contrast, the excess of bureaucratization can be a barrier to entrepreneurial behavior, reflected in excessively rigid organizational structures in terms of hierarchy, autonomy, responsibility and control.

Beyond this factor, studies dedicated to understanding the drivers of entrepreneurial behavior in organizations indicate the importance of elements such as tolerance to error, commitment to goals, quality of communication and sharing of values.

It is recognized as favorable to entrepreneurship that time is needed for the development of new mental models and learning, with tolerance to risks, mistakes and failures. On the other hand, the adoption of strict punitive systems that are intolerant of error and immediacy in collecting the results of innovative initiatives may constitute a set of unfavorable conditions.

An organization can confer freedom of action to individuals as long as they meet the established goals, which leverages self-motivation. The same happens when the fulfillment of the goals is recognized and valued, either through material or symbolic reward. Therefore, lack of commitment to goals and lack of feedback and recognition are considered potential hindrances to entrepreneurial behavior.

Alignment between values ​​is also essential. If individuals do not identify with the values ​​and principles adopted by the organization, they will hardly find the motivation to act in pursuit of organizational goals. Like this alignment, collaboration and sharing of knowledge between people has the potential to foster innovative behavior. New ideas can be perfected when there is interaction between the authors and their peers. For this, there must be channels of direct communication for the sharing of values ​​and knowledge, without links to excessively formal communication processes that could constitute barriers.

Considering the conditions that favor or hinder entrepreneurial action and recognize the benefits that this action can provide to a specific organization, it is necessary to reflect on how they extend to an entire Nation. A country does not provide enough freedom for people to undertake and innovate when their citizens do not feel stimulated to undertake and, finally, to participate in decisions, to take initiative, to learn continuously, to seek the achievement of goals and to fulfill goals, based on common values ​​and with visible gains in quality of life for the opportunity of developing society itself, with a transparent and effective communication of the results obtained towards this development.

In short, in addition to dealing with uncertainty, entrepreneurship is necessary to fulfill the daily work applied to various economic activities. With freedom to undertake, in whatever activity they do, people can contribute to the elimination of inefficiencies and discover ways to exploit economic opportunities. It is the job of the manager to promote means so that the entrepreneurial process can be consummated. It is understood as a manager not only one who provides the means to obtain results that favor the profitability of a business, whose success is reflected in profit, but also one that can promote favorable conditions so that the entrepreneurial behavior prevails in the citizens, in general . In both cases, overall economic progress is a potential reward for society as a whole.

REFERENCES

CALDEIRA, A.; MEDEIROS JR., A. Obstáculos e Incentivos ao Intraempreendedorismo em Empresas Inovadoras. Revista Pensamento Contemporâneo em Administração, v. 10, n. 3, p. 100-116, 2016.

FRIEDMAN, M. Capitalism and freedom. University of Chicago Press, 2009.

HAYEK, F. A. Competition as a discovery procedure. Quart J Aust Econ v. 5 n. 3, p. 9–23, 1968.

MCGREGOR, D. O lado humano da empresa. 3. ed. São Paulo: Martins Fontes, 1999.

MISES, L. Human Action. A Treatise on Economics. The Ludwig von Mises Institute: Auburn, Alabama 1998 (New Scholar’s Edition).

SCHUMPETER, J. A. Can capitalism survive? Creative destruction and the future of the global economy. New York: Harper Perennial, 2009.

SMITH, A. From The Wealth of Nations. In: Readings in the Economics of the Division of Labor: The Classical Tradition. 2005. p. 93-123.