DEFINITION :

The activity of setting up a business or businesses, taking on financial risks in the hope of
profit.
An entrepreneur is defined as "person in effective control of commercial undertaking; one who
undertakes a business or an enterprise".

• Entrepreneur is an innovative person who maximizes his profits by following new strategies or
venturing into new products or services.

IMPORTANCE OF ENTREPRENEURSHIP
1. Stimulate Demand in Wider Economy 2. Nurture Creativity, productivity,
Innovation
3. Create more job opportunities
4. Develop community
5. The Ripple Effect
6. Make Social Change
7. Enhances the standard of living 8. Promotes research and development
Political and economic integration of outsiders

Introduction: the concept of entrepreneurship

The concept of entrepreneurship is elusive, that is difficult to define and taking

various meanings as it is viewed differently by different scholars with regard to the
context it is employed for. For example, the psychologist (behaviourist) see it as “the
need for achievement, perceived locus of control, and risk-taking propensity”. The
economist looks at it as bringing together the factors of production (land, labour,
capital, and entrepreneur) and bearing the risk of buying at a certain price and selling
at uncertain prices. While the sociologist views it as the ability to recognize and act
upon market opportunities in order to provide social services. Neither of these
approaches is sound and all-embracing because each focuses upon some aspects of
entrepreneurship and leaving some untouched. However, four different definitions of
the term entrepreneurship by different scholars are stated below:

1. Entrepreneurship education is the willingness and ability of an individual to

seek out investment opportunities in an environment and be able to establish
and run an enterprise successfully [1].
2. Entrepreneurship education is seen as the process of creating something
different with value by devoting the necessary time and effort, assuming the
accompanying financial, psychological, and social risk, and receiving the
resulting rewards of monetary and personal satisfaction [2, 3].
3. Entrepreneurship education is viewed as an attempt to create value through
recognition of business opportunities, communicative, and management skills
to mobilize human, financial and material resources necessary to bring a project
to function [4].
4. Entrepreneurship education is the process of identifying, developing and
bringing a vision to life. The vision may be an innovative idea, an opportunity,
or simply a better way to do something. The end result of this process is the
creation of a new venture, formed under conditions of risk and considerable
uncertainty [5].
On the other hand, an entrepreneur is someone who assumes the financial risk of
beginning and managing a new venture. The venture can be based on totally new idea,
new way of doing things, a new location, or attempting something no one else has
done before. In other words, an entrepreneur is seen as a person who detects a
previously untapped opportunity to make substantial profits (either by lowering the
cost of producing existing goods/services or by creating brand new products) [6].

In summary, an entrepreneur is an innovator who implement change within the market

through carrying out new combinations. The carrying out of new combinations can
take the several forms: the introduction of a new good or quality thereof; the
introduction of a new method of production; the opening of a new market; the
congress of a new source of supply of new materials or parts; the carrying out of new
organization of any industry.

What is Entrepreneurial Management?

Entrepreneurial management comprises setting particular goals for the new venture. Setting
particular goals may help the entrepreneur control their revolution and to accomplish a certain
result. Entrepreneurial management is the theory of utilizing the imaginative and creative
abilities, skills and proficiencies to adeptly open and manage a start-up company. It is a means
of resolving a group problem through a distinctive and money-making business solution.
An entrepreneur is every time seen as an investigator. He/she thinks about a big problem and
discovers a creative solution to it. Efficiently, as it is known that people pay back equally if the
business plan gives a solution to their critical issues, entrepreneurial management is highly
productive.
For example, the app innovator may set up a goal of 12,000 downloads by the end of the year.
The entrepreneur bid then engrossed on marketing, alternately developing additional features for
the app.

Importance of Entrepreneur Management Plan

A management plan for entrepreneurs is a deed that lists the targets and goals of the
management. It includes details on how the business will particularly achieve its target,
including sales, marketing and product expansion.

Sets an Idea in Place When Starting a New Business

While starting a new business, you have to come up with a business idea, you also need to
stiffen the identity of the business, like what services or products you will sell, where you will
do business, and who will work for your company. A management plan can help provide
instruction in this process, which can also help keep away from mistakes along the way.

To Do Necessary Research
You might generate a business plan ahead of time when deciding to open a business. You might
also create a business plan if you intend to take your existing business in a new direction. By
writing out the features and finances of the new plan, you can control a shift in money-making.
This includes defining your market, identifying who your customers are and how you will reach
them.

Assess Competitors and Find Your Audience

Another part of creating a management plan is investigating the current companies in the
production in which you want to work. By specifying competitors and where they are not
generally reaching customers, you can better forecast how you will reach them. It can also help
you choose your target viewers.

Sets Objectives for Employees and Managers

Setting and measuring objectives will certify that employees and managers are clear on their
duties. This can also help you choose the right employees for your business by setting clear
prospects and objectives.
If you change or update your targets, a management plan can help share these new objectives,
providing formation and responsibility.

Sets Goals for You as an Entrepreneur

Setting clear goals is also obligatory for you as an entrepreneur. You can use a management plan
to list a particular target that you want to achieve, together with target dates. This can provide
you with a guide to construct your daily commitment, while also providing you with
responsibility as an entrepreneur.
Regulates When New Employees Are Needed
As you expand your business and increase your income, you will need extra employees to help
with the daily tasks. But, engaging people before you're ready to enlarge can decrease your
profits. A business plan can help you assess the right time to bring on new staff. It can also help
with setting clear duties and assumptions for each position. You can also use your plan to
regulate what skills to look for when hiring.

Help You in Making Important Business Decisions

Decision-making is a major task as an entrepreneur. Some decisions, like when to hire charge on
a new space or expand the business, are not always easy to make. With a clear business plan in
place, you can control the certain times or goals you must meet to make these major decisions.

To Determine Success of the Business

A business plan sets clear targets, which can help you measure success. Including key
performance measures allows you to know how to measure your advancement toward your
goals. You can use this information to regulate what areas of the business are doing well, versus
which areas need development. You can also use it to help recognize the need for new targets or
plans.

Key Elements of Entrepreneurial Management

There are 5 Key Elements of Entrepreneurial Management They are as follows −
 Innovation
 Organization
 Decision Making
 Risk Bearer
 Vision
Let us see the elements in detail below.

Innovation
Every successful entrepreneur must be innovative in some way or the other and he should be
allowed to see the demand for a particular good or service in the market because here is what
makes them distinct from other entrepreneurs and their progress is even more money-making.
When an entrepreneur is innovative, he sees new opportunities approaching in distinct places
where one cannot even assume.
For example, Bhavish Agarwal and Ankit Bhati, the founders of OLA Cabs saw the increasing
demand for appropriate and inexpensive public transports in India which ensured they turned
that into imagination and went on to initiate OLA Cabs. Today’s valuation of OLA is US$6.5
billion with quite 1.5 million rides on a commonplace. So always be innovative and inventive
and see new opportunities which others cannot.

Organization
The organization is one of the key factors of successful entrepreneurship. In the absence of
organization, everything will become disorganized and inconvenient which further will cause
losses, reducing goodwill, aggrieved customers, and tension to the staff due to which the
workers may leave the company.
Decision Making
Entrepreneurs must observe every decision very carefully because they make a lot of decisions
every day and are generally responsible for being at risk and should learn from their past
mistakes. Decision-making could be a skill that normally comes easily to entrepreneurs who are
high-risk takers in the business world.

Risk Bearer
An entrepreneur needs to appreciate that risk can’t be totally gotten rid of from a business, so he
should be ready for its outcome as well. It can be that the consumers won’t seem to be pleased
with the commodities or services provided or even the participant can provide the similar thing
with better attributes and better price or there might be changes in the government policies.

Vision
Every successful entrepreneur has this one plan in his youth that he was anxious about, but with
time that fire fades away. Good entrepreneurs have that fire and vision in them because without
vision and willingness they cannot grow. Unluckily, young entrepreneurs have these great sights
which hardly ever change into an idea.

Steps Involved in Successful Entrepreneurial Management

To be prosperous indefinable, business practices frequently require entrepreneurship and
innovation.
Following are some of the steps involved in successful Entrepreneurial Management −

Build A Great Team

People are organized by nature. We just do better in groups. That initial strength holds true in
the business world too. There is power in numbers. Look for skilled people. Find people who
share your sight.

Anticipate and Plan for Growth

A Bonsai Tree must grow for three to five years before it can even begin to be trained. Those
who grow the trees don’t wait to plan, even so. They develop a strategy to establish the essential
growth and features of the trees. A business is very similar. If you don’t get ahead of your
growth, you can’t grow profitably or fruitfully.

Set Expectations
In every aspect of the business, expectations need to be set. You must start by positioning your
own expectations and controlling what you are inclined to describe as success. You’re also
going to need to set expectations for the team. Recognizing benchmarks and observing them can
lift the confidence of your team considerably.

Invest Appropriately
Spending money is one of the least beloved activities for entrepreneurs and business owners
(compared to making money, which is one of the most beloved). But investing is distinct from
spending. Investing suggests a return, and returns can be appraised. So, try not to spend, but
never stop investing. Invest in instructing, exchanging, identifying, internal marketing, team
evolution and culture.

Don’t Believe the Hype

Sometimes, you may hear terrible warnings about a bothering shift in your industry. In digital
marketing, we frequently hear that SEO is dead, or that Google’s new update will destroy online
marketing. We still some day hear that definite industries or businesses will see no interest from
online marketing. Don’t believe the hype.

Conclusion
This tutorial provided an overview of entrepreneurship and innovation as it is associated with
defendable business.
The discussion in this tutorial is most applicable to defendable businesses fascinated on offering
new products and services in response to societal concerns. The importance of entrepreneurship
and innovation also bid to companies that change how they produce products and services.

What Is Entrepreneurship Management? Describe its Importance

Entrepreneurship Management is the most important part of management, especially for those
enthusiastic people who have an idea of a start-up. It is treated as one of the most important
studies because entrepreneurship is one of the top trending topics of the 21 st Century.  Further,
the following is a brief introduction to the entrepreneurship and its definition, importance and
roles in today’s business world.

What is Entrepreneurship?

Entrepreneurship is a process in which an individual or group of individuals together

perform certain tasks and risk their time as well as money. These individuals are called
entrepreneurs.

Entrepreneurs search opportunities through their exceptional skills and grow as fast as
possible by utilizing innovative ideas despite having very few resources in control. There
are two terms affiliated with entrepreneurship at some point that are entrepreneurial
ventures and small businesses. There is a great difference between both terms that are
defined below.

Entrepreneurial Ventures

The entrepreneurial ventures are such organizations that explore opportunities through
having three factors in hand, i.e. innovative skills, constant growth and profitability.
These three factors are the main goals of entrepreneurial ventures.

Small Businesses
The Small Businesses are such organizations that are owned, financed and operated
independently. The following are the main features of small businesses.

 Fewer employees under 100

 Rare or not engagement with innovative ideas and modern trends
 Comprise little impact on the industry
 May be remain small by default or choice

Importance of Entrepreneurship Management

There are three things stated below, that define why entrepreneurship management is
important.

1. Innovation is a process of experimenting, changing, transforming, and revolutionizing

an entrepreneurial activity.
2. New Startups can contribute to reshaping the new firms through performing sufficient
duties with innovative practices that may result in growth as well as the profitability of
the entire firm.
3. Job Creation is another aspect that states the importance of entrepreneurship. New
startups may require new staff, so the outcome will be much more beneficial for
unemployed applicants.

Entrepreneurial Process

The entrepreneurial process comprises the following major factors.

1. Researching the Context: It covers society’s rules and regulations and the realities of
new economy that are associated with the work of entrepreneurship directly or
indirectly.
2. Identification of the opportunity and analyzing its advantages
3. Starting the Venture: It covers researching the feasibility, planning, organizing, and
launching of the ventures.
4. Venture Management: It refers to managing process, growth and people.

What Do Entrepreneurs Do?

1. At first, an entrepreneur gets busy in examining the potential for the venture and the
issues that are associated with the start-up.
2. If the venture is completed and running smoothly, the next thing that takes the
attention of the entrepreneur is to manage it in a well-organized order.
3. Eventually, the entrepreneur needs to plan and manage the growth of the venture.

Writing a Business Plan

A Business Plan is an official document that is prepared or written by the owner or the
entrepreneur. It covers the vision of the owner, the nature of the business, the types of
products or services, competitor analysis and how the company differs from its
competitors, the goals of the company, strategies to achieve certain goals, production
and marketing of the products, the management and finally, the financial sources of the
business.

Besides, further necessary details are also included in the business plan. A Business
Plan is written or prepared for the following purposes:

 To think the real aspects of the business and the aspects that are indirectly associated
 To get financing
 For measuring the progress
 For establishing credibility with others

What is Change?

Commonly, change is known as an increment or decrement in the current level of

anything, whereas in the business world, organizational change is termed as an
alteration of any sort in structure, technology or people. Change is in the nerves of the
organization by default and cannot be either eliminated or moved. Rather than
removing or eliminating change, one should look for key issues related to change
management.

Forces for Change

The gap for change is created by two forces, i.e. internal forces and external forces

 Internal Forces

The primary origin of the internal forces is from the internal operations of an
organization or from the effect created by external changes

1. Changes in the workforce

2. Change in Strategy
3. Change in attitude of employees
4. New Equipment

 External Forces

External forces come from several sources.

1. Technology
2. The Marketplace
3. Government Rules and Regulations
4. Economic Changes
5. Labor Markets

ECONOMIST VIEW OF ENTREPRENEURSHIP

The economic theories carry an illustrious along-established pedigree relating to

the study of entrepreneurship.Furthermore, entrepreneurship can bebroadly defined as the

ability and their rto develop, organize and run a business along with handling uncertainties
in order to make profits. In economics, entrepreneurship is closely related to the land,
labour, natural resources and capital that can help to generate profit.

An entrepreneurial vision involves discovery and risk-taking that are critical for nations in
order to succeed in the ever- changing and competitive global marketplace (McFarlane,
2016). Different schools of thought have been established on the theories of
entrepreneurship from psychological, sociological and cultural perspectives.

Economic theories help in examining and exploring economic factors that affect or enable
entrepreneurial behaviour. Economic theories of entrepreneurship can be divided into three
different time periods:

1. classical,

2. neo-classical and,

3. Austrian market process.

The classical, neo-classical and Austrian market processes are different approaches to
explaining entrepreneurship. Classical theorists confined the role of an entrepreneur to
producers and distributors of goods in the marketplace. Neo-classical theorists, on the other
hand, described an entrepreneur as a person who, along with the production and distribution
of goods, undertakes business risk, identifies new opportunities, and simultaneously
reduces costs for a business.

Finally, the Austrian market process theorists focused on human actions based on their
knowledge regarding the economy. These theorists defined an entrepreneur as one who is
creative and imaginative in his work and one who sees a profitable opportunity.

Classical economic theories of entrepreneurship

Classical theories of entrepreneurship majorly focused on the virtues of free trade,
competition and specialization. These theories defined the role of an entrepreneur in terms
of the production and distribution of goods in a competitive marketplace (Tiryaki, 2013).
Some remarkable classical theories of

Richard Cantillon's theory (1755)

Richard Cantillon provided one of the earliest contributions regarding the economic strand of
thought about entrepreneurship. Richard described an entrepreneur as a speculator who
conducts all exchanges, and bears risks as a result of buying at certain prices and further
selling them at uncertain prices. Centillion named it the risk theory of profit where anyone
who receives an uncertain income can be regarded as an entrepreneur.

Furthermore, the theory stated the importance of entrepreneurs as people who play a key
role in the economy by relieving the paralysis engendered by uncertainty and along with it
allowing the exchange and production of goods and services so that market equilibrium can
be attained. Cantillon further stated that an entrepreneur is not an innovator. They cannot
change the demand and supply trends. Rather, they are perceptive, intelligent and willing to
take risks. Their main role in the process is to bring two sides of the market together
(Parker, 2018).

Innovation theory by Schumpeter

The innovation theory is considered to be one of the most important economic theories of
entrepreneurship and was advanced by Schumpeter. The focus of the theory was that
entrepreneurs do not operate with conventional technologies and do not believe in making
small changes to the existing production method. Rather their main goal is to develop new
technologies and products that can bring widespread changes and can help them to shift the
paradigm altogether.

Thus, Schumpeter's view was completely different from that of Richard's.

Schumpeter stated that an entrepreneur is an innovator who is responsible for doing new
things or things that have already been done in a new way (Śledzik, 2013). This can be
done in five different ways which are as follows:
Schumpeter regarded entrepreneurial actions as a major factor causing business cycles and
economic developments. According to his vision of creative destruction, when an
entrepreneurial innovation hits the economy, it leads to the replacement of old products and
processes which is eventually rapidly imitated by competitors (Braguinsky, Klepper and
Ohyama, 2011).

Neoclassical economic theories of entrepreneurship

The neo-classical theories emerged as a result of the criticism levelled against the classical
theories. The neoclassical theory maintains the impact of diminishing marginal utility and
entrepreneurial response to them as another major aspect which was missing in the
classical works (Gimmnez Roche, 2017).

Marshallian theory

The study of entrepreneurs is far from new. In the year 1755, Cantillon described
entrepreneurs as agents who undertake risks for profits. Early theorist Adam Smith
presented the concept of entrepreneurship which was not different from a company owner.

Alfred Marshal in his work combined both concepts and presented the entrepreneur as an
individual who is both, a risktaker and an administrator. He identified entrepreneurs who are
responsible for ensuring production function in a company, identifying opportunities,
reducing costs and increasing profits. Marshall and ther in his theory classified
entrepreneurs as:

• Active entrepreneurs (those who find new ways, and

Passive entrepreneurs (those who tend to follow the existing road) (Fernandez, 2009).
Furthermore, the concept of Marshallian agglomeration economies tends to have a
significant impact on entrepreneurial activities. Here ‘agglomeration' refers to the tendency
of increasing returns as a result of the accumulation of resources in a geographical location.
Marshall mentioned that there are two main forms of agglomerations which are as follows:

• Urbanization of economies results from the accumulation of the population at one point.

• Localization of economies resulting from the accumulation of a specific industry or sector.

Austrian market process theories of entrepreneurship

The Austrian market process theories were proposed in order to provide answers to
questions that remained unanswered in the neo-classical school of thought regarding
entrepreneurship.These theories mainly focus on human actions based on their knowledge
regarding the economy.

Shackle's theory

According to Shackle's theory, entrepreneurs are creative and imaginative in their work.
It states that entrepreneurs imagine opportunities and have the creative ability to make
choices. Furthermore, according to this theory, uncertainty and imperfect information
play an important role because it is the presence of both these aspects that gives rise to
opportunities for individuals. This act of imagination helps entrepreneurs in the
identification of potential market opportunities. This, when compared with the resources
available, can lead to effective decision-making.

Shackle presented entrepreneurs' education levels, personal backgrounds, experiences

and attitudes as the major factors that tend to affect their imagination and creativity
(Smith and Chimucheka, 2014).

Entrepreneurs add value to the economy

The various theories presented by classical, neo-classical and Austrian market process
theorists encapsulate the relationship between an entrepreneur and the economic
growth of a country. Through Innovation, an entrepreneur can have a significant impact
on the market, thus leading to the economic growth of a nation. All these theories still
carry strong implications for modern-day entrepreneurs as well, since the role of an
entrepreneur still remains the same, i.e. the one who equilibrates supply and demand in
an economy by bearing risks and uncertainties. Furthermore, by the introduction of
innovation in products and techniques, an entrepreneur brings in new opportunities in
the market.

Social view:
Sociological theories are different from other theories because they analyse
entrepreneurial activities from the standpoint of social contexts and corresponding
processes and effects. They subscribe to the notion that the construction of
entrepreneurship is narrowly a purposive action that leads to the formation of a new
formal organization. They also broadly indicate various efforts that help introduce robust
innovations in routines, technologies, organisational structures and social institutions
(Ruef and Lounsbury, 2007).

Various entrepreneurship theories have been proposed by scholars over different

periods of time that aid in the process of development of the field of entrepreneurship.
They are broadly segregated into:

 economic entrepreneurship theories,

 psychological entrepreneurship theories,

 sociological entrepreneurship theories,

 anthropological entrepreneurship theories and,

 ⚫ cultural entrepreneurship theories.

The identifying feature of sociological entrepreneurship theories is that they focus on the
social context of entrepreneurship development (Simpeh, 2011). Some of the prominent
theories include Max Weber's theory of social change, EE Hagen's theory, the Theory of
Frank Young, Cochran's theory, and the Attention-Motivation Theory of McClelland.
Some of them are discussed in this section.
Cochran's theory of entrepreneurship

The Cochran theory was introduced by Thomas Cochran in 1965. This theory explains
the entrepreneurial approaches of an individual from standpoints like occupational
hazards that he encounters and expectations he has from his own profession (Pawar,
2013; Otaghsara and Hosseini, 2014). It explains that entrepreneurship is determined by
variables like cultural values, role expectations, and social sanctions. This theory also
proposes that entrepreneurs are not supernormal individuals. Rather, they are people
who represent the modal personality of society. 'Modal personality' is the term used by
the anthropologist Cora DuBois in order to indicate behavioural traits few individuals
develop in response to psychological, neurological and cultural factors (Birx and
Fogelson, 2012). Thus, if a person and Fogelson, 2012). Thus, if a person performs like
an entrepreneur, their performance is shaped by factors such as:

 the attitude of the person towards their profession,

 the societal role expectations that are held by sanctioning groups and,

 the operational requirements of the job he is engaged with (Pawar, 2013).

EE Hagen's theory of social change

EE Hagen introduced the theory of social change as an endeavour to explain how
individuals change their social status in order to gain societal respect. The core notion
that drives this sociological theory is that when individuals feel that they are no longer
respected by society, they tend to implement innovative ways by means of which their
social status can get positively transformed. The aim is to regain their lost status.

This desire to change the prevailing social status can be indicated as the acquired
tendency of an individual to become an entrepreneur. This happens in three situations:

1. When the individual loses their existing social status to someone who has suddenly
regained superiority and enhanced social respect.

2. If there is any form of defamation of the values and position of the individual by
someone superior to him.

3. If the individual is unable to accept the newly acquired social status due to the
transformation of the existing society into a new social order (Hagen, 1963).

Thus, this theory emphatically shows that withdrawal from existing social status acts as
a driver which influences entrepreneurial qualities in an individual. Eventually, this
transforms an individual from an ordinary person to an entrepreneur (Hagen, 1963;
Lehmann, 2010).

Theory of Frank Young

The entrepreneurial theory that was proposed by Frank Young is distinct from many
other theories of entrepreneurship because it objects to the idea that individual-level
calibre and beliefs help in developing entrepreneurship. According to this theory, paying
attention to individual-level qualities will never be conducive to developing
entrepreneurship tendencies (Nee and Young, 1991; Pawar, 2013). Rather,
entrepreneurship can only develop when groups or individuals are able to identify and
appreciate clusters of qualities that are needed for developing such a quality.

In terms of modern sociological theories of entrepreneurship, this theory suggests that

the identification of clusters of entrepreneurial qualities acts as a motivation that
influences an individual to accomplish these credibility goals so

to accomplish these credibility goals so that they can become a successful entrepreneur.
However, the theory emphasizes that individual-level entrepreneurial characteristics
should always be under sided and group-level patterns should be preliminarily
emphasized if successful entrepreneurship qualities are to be developed (Pawar, 2013).
This shows that a group of individuals have more propensity to become successful
entrepreneurs than individuals.

In the modern entrepreneurial setting, several sociological factors are undergoing a

change. For instance, digitalisation is picking pace rapidly, penetrating almost every
sector of business. The startup culture facilitated by various governments is also
bringing about a change in attitudes and aspirations of an entrepreneur to drive bigger
changes in society. However, some instances of modern entrepreneurship are radically
different from those that existed during the nineteenth and twentieth centuries,
warranting a new class of sociological elements in societies. Therefore, newer
sociological theories of entrepreneurship need to be developed that encompass these
factors and build upon their relevance.