Kizner’sUnderstanding of the Market Process
IsraelKirzner’s understanding of the market process
Themarket is a complex environment that involves many activities andsystems. Customers play a central role in the exchange of goods aspart of the market process. A market is likely to experiencestagnation and weak operations if the systems put in place do notfocus on satisfying the customer`s tastes and preferences. Therefore,prior research on the market environment is very necessary for asuccessful market process. Having a good strategy and making rightdecisions are also part of the market process. Different scholars andeconomists outline theories that describe the market process. Howevermuch these theorists express different views, their ideas have apoint of convergence which makes the market process predictable invarious business environments. Therefore, this summary aims atanalyzing Kirzner’s understanding and thoughts about the marketprocess.
Kirznerideologies contrast with Robbinsian economizers philosophies since heapplauds alertness in the process of entrepreneurship. Kirznerbelieves that a real and fruitful entrepreneur makes independentdecisions that do not depend on Robbinsian economizing. Additionally,the economist affirms that alertness is the only way that a businessowner achieves success. Through alertness, the entrepreneur canidentify opportunities in the market and take advantage of thesituation to start up a successful business.
Accordingto Kirzner, market processes get characterized by discovery andignorance which creates an imbalance in the system. Most people takemarket opportunities for granted, and only the daring characters makea step towards benefitting on the ignored business chances.Therefore, the changes that embrace the sequence of discoverycharacterize the market process. Kirzner justifies that there existsan economic equilibrium in the market process that entirely dependson the demand and pricing of goods.
Thebalance status remains relevant from the fact that most people in themarket are scared to embrace new challenges even when the risk and inthe initial capital are low. Kirzner’s ideas on entrepreneurshipbase on the ideas of spontaneous learning whereby the study of themarket is a step by step process. Through learning the owner of afranchise can understand the market and ultimately establish thebusiness on a firm basis. Moreover, spontaneous learning is verycritical because it facilitates the rectification of problemscommitted before failure gets realized. Therefore, an entrepreneurcan only grow and become better through embracing the process ofnatural learning. Additionally, the market process focuses on abusiness adjusting to changes with impact on the environment. Thequality ensures that the entrepreneur goes through the entire marketprocess without falling back or the firm collapsing.
Severalentities characterize the market process. Alertness which is anattribute that should be possessed by every entrepreneur to help themdetect any changes in the market system. Moreover, it is throughalertness that untapped opportunities get identified, thus givingroom for the establishment of new businesses. Alertness complementsdiscovery in that the process of identifying new opportunitiesdepends on both of the qualities mentioned.
Inconclusion, a good entrepreneur must learn the aspect of surprisewhich helps at keeping the competitors unaware of the next businessmove as elaborated by Kirzner’s philosophy. An individual is likelyto achieve success in a venture by making abrupt changes as marketdictates. Entrepreneurs need to monitor profit and loss making in thebusiness to meet the market equilibrium demands. By so doing, theentrepreneur is likely to survive the changing market waves and enjoyperiods of progress.
Kirzner,I. M. (1997). Entrepreneurial discovery, and the competitive marketprocess: An Austrian approach. Journalof Economic Literature, 35(1),60-85. Retrieved from http://www.univpgri-palembang.ac.id/perpusfkip/Perpustakaan/Austrian%20School/Kirzner-Market.pdf