The concept of
entrepreneur concerns to the vision of an entrepreneur as well as its transforming
into action by him. Entrepreneurship is a creative and innovative response of
an individual to the environment. It is also the process of establishing a new
venture by the entrepreneur. Thus, an entrepreneurship is a composite skill a combination of many qualities and traits
such as imagination, risk taking, ability to utilize factors of production,
i.e, land, labour, technology and several intangible factors.
Entrepreneurial culture
implies a set of values, norms and traits conducive to the growth of
entrepreneurship, an organizational culture focusing on new opportunities and
creation of an enterprise where these opportunities can be perused earnestly.
An entrepreneur searches for the opportunities, looks for ways and means to take
advantage of the newer opportunities by organizing the structure and the
required resources and getting control on them. As against this, a manager in a
non-entrepreneurial culture is primarily related with the resources under his
control, the relation between the market served and the structure of his
organization. He also deals with matching the opportunities and organizational
abilities. The perception of opportunities drives an entrepreneurial manager.
They look for changes in the political regulation, social values, consumer
tastes and preferences, technology etc. On the other hand resources like money,
human resources and material drive the administrative managers.
Definition
Entrepreneurship is an
elusive concept difficult to be defined precisely. However, different people
having different perspectives have defined entrepreneurship differently.
Economists concentrate on
‘what happens when entrepreneurs act’.
Psychologists and
sociologists focus on ‘whey they act’
Management experts
consider ‘how the entrepreneurs act’ in the characteristics of entrepreneurial
managers and the manner in which entrepreneurs achieve their goals.
Richard Cantillion
Entrepreneur is derived
from a French word entrependre i.e. individuals who were ‘undertaker’ meaning
those who undertook the risk of new enterprise. The term entrepreneur was first
coined in the writings of French economist, Richard Cantillon who described an
entrepreneur as a person paying a certain price for a product to resell it, at
an uncertain price. Thereby he makes decision about obtaining and using
resources while assuming ‘the risk of an enterprise’ As per Cantillion,
entrepreneur’s role is to assemble factors of production into a producing
organism. Entrepreneurs consciously make decisions about resource allocation.
Smart entrepreneurs always seek for the best opportunity of using resources for
high commercial gain.
According to Adam Smith,
an entrepreneur performs the role of an industrialist. According to him an
entrepreneur is an individual who establishes an organization for commercial gains.
He is a proprietary capitalist, a supplier of capital and at the same time a
manager who mediates between the labour and the consumer. Adam Smith also considered
him as an employer, master, merchant but explicitly dealt him as a capitalist. In his view, an
entrepreneur possessing unusual foresight to recognize potential demand of
goods and services, a change agent who transforms demand into supply, one who
possesses certain arts and skills of creating new economic enterprises, as a
person with exceptional insight into the society’s needs and abilities to
fulfill them. An entrepreneur is an ‘Economic Risk Taker’ of Cantillon and
‘Industrial Manager’ of Adam Smith. The British economist John Stuart Mill had
described an entrepreneur as business founders and thus become fourth economic
factor with land, labour and capital.
Carl Menger of Austria was
of the opinion that economic changes do not emerge from the circumstances but
from the individual’s awareness and understanding of the environment. The
entrepreneur, therefore, occupies the role of a change agent who transforms
resources into valuable goods and services. He, thus, creates the circumstances
leading to industrial growth. As per Menger’s classic theory of production,
resources have no use for themselves in terms of fulfilling human needs. He visualized
the entrepreneur as an astute person who could envision this transformation and
create the means to implement it and adds value to the original resource which
is rewarded through profits.
Joseph Schumpeter, an
economist narrated entrepreneur as one who seeks to reform or revolutionize the
ways of production by exploiting an innovation or, more generally, an untried
technological possibility for producing a new commodity or producing an old one
in a novel way, by identifying a new source of supply of material or a new outlet
of products.
An Entrepreneurship essentially
consists of doing things not usually done in an ordinary course of doing
business. An entrepreneur is an individual who innovates, mobilizes financial
resources, gathers inputs, organizes talent, provides leadership and sets the
organization.
For Schumpeter an inventor
and an entrepreneur are not the same person. An inventor creates a new product
while entrepreneur integrates the factors of production for the first time.
PETER
DRUCKER
As
per Peter Drucker, the management guru, entrepreneurial role is one of acquiring
and using resources. The distinction is that in an entrepreneurial role the
resources must be allocated to the opportunities, where as in the managerial role
the resources are allocated to solve the problems. Entrepreneurship occurs when
resources are redirected towards progressive opportunities, and are not used
for ensuring administrative efficiency. This redirection of resources distinguishes
between the entrepreneurial and managerial role.
To
Peter Drucker an entrepreneur is one who searches for change, responds to it
and takes advantage of it as an opportunity. Innovation is a tool of
entrepreneurship. An entrepreneur
innovates and creates resources because there is no such thing as resource
until someone makes use for something and adds economic value to it. Drucker considers enhancing the value and consumer satisfaction of a resource an entrepreneurial
activity. Entrepreneurs transform materials to resources or combine the
existing resources in a new or more productive configuration. Drucker felt that
an entrepreneur need not essentially be the owner of the business. A
professional manager who mobilizes resources and allocates them to make a
commercial gain from an opportunity is also an entrepreneur.
Robert
Ronstand
Robert
Ronstand illustrated entrepreneurship as a dynamic process of creating
incremental wealth by persons who assume major risk, in terms of equity, time,
a commitment of providing value for some product or service. Product or service
itself may or may not be unique but an entrepreneur must add value through
allocation of necessary skills and resources.
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