5/12/2019 Entrpreneurship Vs Management - Introduction, Entrepreneurship & Small Businesses B Com Notes | EduRev

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Entrpreneurship Vs Management - Introduction,

Entrepreneurship & Small Businesses
Created by: Arshit Thakur (/1929415?public…

Entrepreneurship vs. Management

Quite often an entrepreneur and a manager are considered similar because of

some overlapping in their roles. In a small firm, the owner himself acts as the
manager. But there are some important differences between a entrepreneur
and a manager which are discussed below:

1. Venture Creation: An entrepreneur often sets up a new venture while a

manager only runs an existing venture.
2. Innovation: An entrepreneur introduces new ideas to increase profits
and is, therefore, an innovator. On the other hand, a manager runs the
business on established lines and often maintains the status quo. An
entrepreneur is a ‘change agent’ whereas a manager is the ‘product of
change’. Entrepreneurship involves combining to initiate changes in
production whereas management involves combining to produce.
3. Status: An entrepreneur is his own boss and enjoys an independent
status. In contrast, a manager
Please rate the document to is
helpan employee
us maintain and
content dependent on the
quality

owner.
4. Reward: For bearing risk, an entrepreneur earns profits which may
fluctuate widelyExcellent
from one timeAverage
Good
period Below
to another.
Poor
But the reward of a
(5) (4) (3) average (1)
manager is the salary which is relatively fixed
(2) and regular.

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5. Continuity: Management refers to the ongoing coordination of the

production process whereas entrepreneurship is a discontinuous
phenomenon appearing to initiate change in the production process and
then disappears until it reappears to initiate another change.
Overlapping Roles of Entrepreneur and Manager

Joseph Schumpeter made a distinction between entrepreneur and manager.

According to him, a manager is one who deals with day-to-day affairs of a
going concern. But an entrepreneur attempts to change the factor
combinations and thus increases productivity and profits. An entrepreneur
launches a new enterprise whereas a manager operates an existing enterprise.
The roles of entrepreneur and manager may, however, overlap in many
situations. Entrepreneurs who start enterprises must use managerial skills to
implement their innovative ideas successfully. Similarly, managers must use
entrepreneurial skills in order to manager change and innovation to effectively
deal with uncertain external environment of business.

Table: Entrepreneur vs. Manager

Basis Entrepreneur Manager

1. An entrepreneurs A manager only runs

Venture sets up a new an existing
Please rate the document to help us maintain content quality
creation venture and runs it. unit.

A manager is an
Entrepreneurship is
Excellent Good employee
Average of the
Below Poor
another name
(5) of (4) (3)average (1)
2. business (2)
innovation. He
I ti i ti H

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Innovati organisation. He
works to find new
on cannot
methods, products,
operate
etc.
independently.

A manger takes less

An entrepreneur risk at
starts and runs his compared to an
3. Risk- venture entrepreneur. He is
taking independently. He is less tolerant to
selfemployed uncertainty. He does
and is his own basis. not share business
risks.

An entrepreneur
takes calculated
risk. He may even A manager need not
jeopardize his be an innovator.
4. Status own financial He deals with the
security. He is day-to-day affairs
Please rate the document to help us maintain content quality
responsible for of a going concern.
failure and financial
loss.
Excellent Good Average Below Poor
(5) (4) (3) average (1)
A manager
(2) is
An entrepreneur is
db d
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5/12/2019 Entrpreneurship Vs Management - Introduction, Entrepreneurship & Small Businesses B Com Notes | EduRev

p
motivated by rewards
5. motivated by
or incentives. His
Reward profits. He may even
salary cannot be
suffer a loss.
negative.

An entrepreneur is
responsive to A manager may not
6. external very receptive to
Change environments and is change, unless he is
always enterprising.
prepared to change.

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