Basketball used to be my sport in my teenage years. I learned by dribbling and shooting and playing with friends; practice. Others I know, learned by joining scientific basketball camps, where basketball is taught using principles based on theories. I did join a camp, too, but only for a few sessions. This story reminds me of an event where I invited entrepreneur to talk in my class.
I once invited a friend to speak and share his experiences to my freshmen Entrepreneurial Management students. He talked about how he started his business, his challenges and how he was able to overcome them. In his last statement, he said that students need not study entrepreneurship to be able to start and operate their own business. I claim he is suggesting they can throw away theories and just learn along the way. In short, practice trial and error, just like how he and other entrepreneurs started and operated their business.
I understand his point of view that anyone can start and run a business without having to go to school. However, not all people operate that way, specially those who come from non-entrepreneurial families, who grew without a model in a business venture. It is true that there have been many founders who have successfully started and grew their business without going to business school, but it does not take away the fact that there is value in learning theories. Theories are as important as practice and they work as a unit.
Today, entrepreneurship has evolved from being defined as a form of trading business into a business that involves science, innovation, technology, data and investments. As such, the world of business has become complex and engaging in trial and error can deplete the resources fast that may lead to the demise of business. So learning business theories are important for the following reasons:
A good theory is a starting point. Imagine faced with a business concern and you do not know which decision to make. You may either choose any direction and proceed without thought, or base the actions on some theories related to the concern. Of course, success is not guaranteed but at least the action was based on something studied and experienced.
Explanation of the world from ones observation. Theory is an observation that has been tested and applied. It explains situations, events and possible outcomes from actions taken. Making decisions based on theories can help you predict the possible outcome.
Foundation of action. I read a magician whose foundation is philosophy. In one of his essays, he said that right theories precede right actions. In business, clarity of action is important and a good foundation of understanding theories can help in making quick actions.
Appreciation of business theories help create a foundation for intelligent decision making and action. Remember that one is not important than the other and theory and practice work best together.