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ENTREPRENEURIAL DEVELOPMENT

ENTREPRENEURIAL DEVELOPMENT
Evolution of Concept
The word ‘entrepreneurs’ is derived from the French As an Organizer:
verb ‘entreprendre’. It means to ‘undertake’ it originally means Jean Baptiste says “One who combines the land of one
that to designate an organize of musical or other the labour of another and capital of yet another and thus
entertainments. Oxford dictionary in 18 “the director or a produces a product. By selling the product in the market he
manager of a public musical institution, one who ‘gets up’ pays interest on capital, rent on land wages to laborers and
entertainment, especially musical performance”. In it the early what remains is his/her profit. Thus he made a clear distinction
16th century entrepreneur was applied to those who were between the role of capitalist as a financed and entrepreneurs as
engaged in military expeditions. In the 17 th century it was a organizer.
considered as to cover civil engineering activities such as
construction and notification. It was only in 18th century the As an Innovator:
word entrepreneur was used to cover economic aspects. The Joseph A Schumpeter in 1934 in his book “theory of
term entrepreneur is used in various ways and terms. The views economic development” he says economic development as a
are broadly classified in three ways. discrete dynamic change brought entrepreneur by instituting
 Risk bearer new combination of production i.e, .innovations. According to
 Organizer and him introduction of new product may occur in any of following
 Innovator five norms:
Risk Bearer: 1. Introduction of new product in the market
In 18th century Richard Cantillon an Irish man living in 2. The instituting of new production technology which is
France, was first used entrepreneur and defined as An agent not yet tested by experience in the branch of
who buys factors of production at certain prices in order to manufacture.
combine them in to a product with a view entrepreneurs are 3. Opening of new market into which the specific product
risk bearing agents of product. has not previously entered.
Knight also described entrepreneur to be a specialized 4. The discovery of new source of supply raw material
group of persons who bear uncertainty. Uncertainty can be 5. The carrying out of the new form of organization of any
defined as a risk which cannot be in insured against and is industry b creating of monopoly position or the
incalculable. breaking of it.

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Highly optimistic Innovating Entrepreneurs: 4. or good or service offered for sale. 2. Innovation Characteristics of an Entrepreneur: The features of successful entrepreneurs are: Types of Entrepreneurs 1. Raising necessary funds. Imitative entrepreneurs do not innovate the An entrepreneur does perform all the functions changes themselves. 7. idea. discovers new 6. Foresight goods. 5. Independence An innovating entrepreneur is one who introduces new 5. ENTREPRENEURIAL DEVELOPMENT An individual who. Recruitment of men. These are characterized by a refusal to adopt 7. They imitate only when it becomes perfectly clear 3. and reward of a given business venture. Risk bearing business processes. Determination of form of ownership/ organization position in the enterprise. rather than working as an 8. Procuring machine and material opportunities to make changes in production formulae even at 2 . The entrepreneur is commonly The functions of entrepreneurs can be also classified as under: seen as a business leader and innovator of new ideas and 1. inaugurates new method of production. Innovation Imitative Entrepreneurs: These are characterized by readiness to adopt successful innovations inaugurated by innovating Functions of Entrepreneurs: entrepreneurs. These can be listed in the Fabian Entrepreneurs: following manner: Fabian entrepreneurs are characterized by very great 1. Product analysis and market research that failure to do so would result in a loss of the relative 4. employee. runs a small business and assumes all the risk 9. Desire for high achievement follows: 3. enterprises. Completion of promotional formalities Drone Entrepreneurs: 6. caution and skepticm in experimenting any change in their 2. Hard work: Clarence Danhof. they only imitate techniques and necessary right from the genesis of an idea upt the technology innovated by others. Organization 3. Idea generation and scanning of the best suitable idea. have classified the entrepreneurs as 2. Undertaking the business operations. establishment of an enterprise. Good organizer market and reorganizes the enterprise. Determination of the business objectives.

3 . Both have to produce results through people them actively participate in the operations of the business. Such entrepreneurs may even suffer from losses but Distinction between an Entrepreneur and a they are not ready to make changes in their existing production methods. and principles. Both have to operate under constraints research and innovative activities. organizing. Usually. In the beginning most of entrepreneurs start their enterprise like them. both have to follow sound principles of much risk. employ a few employees. staffing. they like to buy the ongoing one. delegation and control. management like planning. Hence. To be effective in their These are those entrepreneurs who do not like to bear respective roles. Active partners: Both managers and entrepreneurs are answerable for Active partners are those entrepreneurs who start/carry on an enterprise as a joint venture. working with them though they deal with different sets of Inventors: Such entrepreneurs with their competence and people. Professional Manager: Following are some more types of entrepreneurs listed A professional manager is one who specializes in the by some other behavioral scientists: Solo operators: work of planning. the family enterprise and businesses which mainly depend on exercise of personal skill fall in this type/category of entrepreneurs. leading and controlling the These are the entrepreneurs who essentially work alone efforts of others by the systematic used of classified knowledge and it needed at all. ENTREPRENEURIAL DEVELOPMENT eh cost of severely reduced returns relative to other like producers. Their basic interest lies in as their tasks vary. in order to reduce risk involved in setting up a new enterprise. Both are decision makers but the decisions are different inventiveness invent new products. Buyers: which are understandably different. Lifetime: These entrepreneurs take business as an integral part of their life. It is important that all of producing results.

staffing. Status An entrepreneur is the owner of the enterprise A manager is the servant in the enterprise owned by the entrepreneur. take-overs. he acts as an innovator also called a entrepreneur’s ideas into practice. All the managerial and operational decisions relating to diversification. credit by the manager. for his personal gratification. Hence. Decision making All policy and strategic decisions such as expansion. functions The major functions of an entrepreneur are risk The major functions of a manager are planning. the motive of manager is to render his services in by setting up of an enterprise. capital budgeting. directing. running the enterprise. He standards the venture an enterprise already set up by entrepreneur. mergers. Innovation Entrepreneur himself thinks over what and how to A manager simply executes the plans prepared by the produce goods to meet the changing demands of the entrepreneur. change agent. day to day activities of he business of the firm are taken reorganization. organizing and innovation. pricing. organizing. granting etc. bearing. Rewards The reward of the entrepreneur is profit which is highly A manager gets salary as reward for the services uncertain. originality terms of sound knowledge in management theory and in thinking. and risk bearing ability and so practice. ENTREPRENEURIAL DEVELOPMENT Points Entrepreneur Manager Motive The main motive of an entrepreneur is to start a venture Here. controlling and other such managerial functions. on. amalgamations. Qualification An entrepreneur needs to possess qualities and A manager needs to posses distinct qualifications in qualifications like high achievement motive. a manager simply translates the customers. rendered by him in the enterprise. Risk bearing An entrepreneur being the owner of the enterprise A manager as a servant does not bear any risk involved assumes all the risks and uncertainty involved in in the enterprise. Thus. The salary is certain and fixed. 4 . are taken by the entrepreneur. foresight.

H Cole: 6. Risk-taking others defined it in many ways such as risk bearing. 5. Skilful management Entrepreneurship is the purposeful activity of an 7. • Motivator • Motivation Entrepreneurship is the propensity of mind to take • creator • Creation • Visualiser • Vision calculated risks with confidence to achieve a pre-determined • leader • leadership business or industrial objective. Accepting challenges 5 . ENTREPRENEURIAL DEVELOPMENT Entrepreneur and Entrepreneurship 2. Making the enterprise a succes individual or a group of associated individuals. Many 3. Let’s see some definitions. innovating. maintain or aggrandize profit by production or Relationship between Entrepreneur and the distribution of economic goods and services. Decision making The entrepreneurship is the elusive concept. 4. • Imitator • Imitation Characteristics of Entrepreneurship 1. It is an exercise • Person • Process • organizer • Organization involving and creativity that will go towards establishing hi/her • Risk-bearer • Risk bearing enterprise. Organization In the opinion of A. Entrepreneurship Entrepreneurship is the process undertaken by an Entrepreneur Entrepreneurship entrepreneur to augment his business interests. undertaken to initiate. Innovation and thrill-seeking.

It was Gifford Pinchot III. Thus. cannot convert them on his own account. They are called ‘intrapreneurs’. an American Management expert. by operating within the organizational environment. An intrapreneur does not bear any risk involved in his business operations An entrepreneur operates in his business from outside An intrapreneur operates from within his business organization. The concept of Intrapreneurship has become very popular in developed countries like America. the top executive’s area encouraged to catch hold of new ideas and then convert these into products through research and development activities within the framework of organization. In big organizations. 6 . They emerge from within the confines of an existing enterprise. "Intrapreneurship refers to employee initiatives in organizations to undertake something new. Intrapreneurs are inside entrepreneurs who follow the goal of the organization. who used the term ‘intrapreneur’ for the first time in 1983. This Intrapreneur focuses on innovation and creativity and who transforms a dream or an idea into a profitable venture. ENTREPRENEURIAL DEVELOPMENT INTRAPRENEUR A new breed of entrepreneurs is coming to the fore in large industrial organizations. Differences between Entrepreneur and Intrapreneur: Points Entrepreneur Intrapreneur Ownership entrepreneur is the owner of the organization An intrapreneur is an employee of the enterprise Status An entrepreneur is independent in his status An intrapreneur is dependent on his employer or owner Raising of an entrepreneur raises the required capital for his An intrapreneur does not raise the capital capital: business Risk An entrepreneur bears the risk involved in his business. without being asked to do so". Guarantee of An entrepreneur gives guarantee of payment of money An intrapreneur does not required to do so payment to the lenders Convention of An entrepreneur converts his new ideas or high An intrapreneur has only to create his new ideas but he new ideas intrapreneurs’ ideas into reality. a A person within a large corporation who takes direct responsibility for turning an idea into a profitable finished product through assertive risk taking and innovation Intrapreneurs have entrepreneurial skills blended with managerial skills but operate within the confines of an organization.

ENTREPRENEURIAL DEVELOPMENT 7 .