Unit -1

Meaning and Definition of Entrepreneur

The word “entrepreneur” is derived from the French verb entreprendre. It means “to undertake”. In the early
16th century, the Frenchmen who organized and led military expeditions were referred to as “entrepreneurs.”

The team “entrepreneur” was applied to business initially by the French economist, Cantillon, in the 18th century,
to designate a dealer who purchases the means of production for combining them into marketable products.

Adam Smith described entrepreneur as a person who only provides capital without taking active part in the
leading role in the enterprise.

According to Max Weber: “Entrepreneurs are a product of particular social condition in which they are brought
up and it is the society which shapes individuals as entrepreneurs.”

An entrepreneur is a person who has possession of a new enterprise, venture or idea and assumes significant
accountability for the inherent risks and the outcome. He or she is an ambitions leader who combines land, labor,
and capital to often create and market new goods or services. Entrepreneur in English is a term applied to the
type of personality who is willing to take upon herself a new venture or enterprise and accepts full responsibility
for the outcome.

Characteristics of Entrepreneur

Entrepreneur is a key figure in economic progress. He is the person who introduces new things in the economy.
He is considered as the business leader and not as simple owner of capital. He is a person with telescopic faculty,
drive and talent who perceives business opportunities and promptly seizes them for exploitation. However, to be
successful, an Entrepreneur should have the following characteristic features:

1) Need to Achieve: Entrepreneurs have got strong desire to achieve higher goals. Their inner self motives their
behavior towards high achievement.

2) Independence: Most of the entrepreneurs start on their own because they dislike to work for others. They
prefer to be their own boss and want to be responsible for their own decisions.

3) Locus of Control: Entrepreneurs believe in their own ability to control the consequences of their endeavor by
influencing their socio- economic environment rather than leave everything to luck. They strongly believe that
they can govern and shape their own destiny.

4) Risk – Bearing: Entrepreneurs are the persons who take decisions under uncertainty and thus they are willing
to take risk, but they never gamble with the results.

5) Perseverance: Entrepreneur has the quality of sticking to job he decides to undertake. They work sincerely
until the whole project is successfully implemented.

6) Positive Self- Concept: Entrepreneurs are always positive in their action> Being an achiever, he directs his
fantasies and dreams towards achievement of worthwhile goals and sets extraordinary standard of excellence in
what he is doing. This is based upon his awareness of SWOT analysis.
7) Ability to Find and Explore Opportunities: Entrepreneurs are always alert to opportunities. They are very much
quick to see and grab opportunities. They exhibit an innovative turn of mind and convert the problems into viable
opportunities. They plan intellectually and anticipate carefully how to achieve their goals in realizing an
opportunity.

8) Hope of success: Hope of success is a significant quality of entrepreneurial personality. Entrepreneurs set their
goals with a hope of success rather than fear of failure. This is because they set their goals on the basis of facts
and their ability to manoeuvre them to their advantage.

9) Flexibility: Most of the successful entrepreneurs measure the pros and cons of a decision and tend to change if
the situation demands. They never feel reluctant to revise their decisions.

10) Analytical Ability of Mind: Entrepreneurs are unaffected by personal likes and dislikes. At the time of their
need they select experts rather than friends and relatives to assist them. They usually avoid emotional and
sensitive attitude towards their business or problem.

11) Sense of Efficacy: Entrepreneurs are always oriented towards action for accomplishment of their goals. Being
confident of their abilities, they find themselves as problem solvers rather than problem avoiders.

12) Openness to Feedback and Learning from Experience: Successful entrepreneurs like to have immediate
feedback of their performance. They learn from their experience and never get discouraged having received
unfavorable information. On the country, they are stimulated by unfavorable information to involve themselves
sincerely in their own tasks to reach their desired goals.

13) Confronting Uncertainly: Successful entrepreneurs are always optimistic and take every odd as the
opportunity. They maneuver their environment in such a way that the works get accomplished rationally. Thus,
they win by the application of their extraordinary insight and skill.

14) Interpersonal Skills: Entrepreneurs are always comfortable while dealing with people at all levels. During the
course of their action, they come across a cross section of individuals with whom they have to deal. They interact
with raw material suppliers, customers, bankers, etc. For different activities. As successful entrepreneurs, they
should be persons who like working with others possessing the much needed quality of interpersonal skill to deal
with people.

15) Need to Influence Others: Once the entrepreneurs set their goals, they have to play the roles of manager too.
For influencing others (Power), a low need to establish emotional relationship (low Affiliation) and a high need to
discipline one’s own self (to inhibit over expression of their personality) are essential.

16) Stress Takers: Entrepreneurs are capable of Working for long hours and solving different complexities at the
same time. As the captain of an industry or an enterprise, an entrepreneur faces a number of problems and in
right moment he takes right decisions which may involve physical as well as mental stress.

17) Time Orientation: Entrepreneurs anticipate future trends basing upon past experience and exposure. They
stick to the time pragmatically while doing their jobs.

18) Innovators: Successful entrepreneurs are innovators. They constantly put their efforts in introducing new
products, new method of production, opening new markets and reorganizing the enterprise.

19) Business Communication Skill: In order to motivate others in the business, entrepreneurs must possess good
communication skill. Both written and oral communication skills are necessary for the entrepreneurs for running
enterprise efficiently.

20) Leadership: Entrepreneurs should possess the quality of leadership. Leadership is the ability to expert
interpersonal influence by means of communication towards the achievement of goals. Entrepreneurs as the
leaders should provide the necessary spark to motivation by guiding, inspiring, assisting, assisting and directing
the members of the group for achievement of unity of action, efforts and purpose.

21) Telescopic Faculty: Successful entrepreneurs always tend to think ahead. They have got telescopic faculties
which make them think for the future.

22) Business Planning: Planning implies deciding in advance what, when and how to do a thing. Entrepreneurs
should be adept in planning their business and planning is an intellectual approach to solution of the various
problems.
23) Decision Making: Decision- making skill is a fundamental characteristic of an entrepreneur. This implies the
function of choosing a particular course of action out of several alternative courses for the purpose of achieving
specified goals.

24) Ability to Mobilize Resources: Entrepreneurs must have the ability to marshal all the inputs to obtain the end
product. They have to mobilize 6 Ms, i.e. Man, Money, Material, Machinery, Market and Method effectively to
realize the final product as entrepreneurship is function of gap filling and input completing.

25) Self – confidence: Entrepreneurs must have self- confidence to accomplish the task effectively and efficiently.
They must take decisions on their own in uncertain and risky situation and should stick to it confidently even if
there occurs initial setback.

Entrepreneurial Skills

What skills are needed to be an entrepreneur? There are many skills that entrepreneurs develop over time, but
there are a few skills that every entrepreneur must have before opening their “door” for business. Successful
entrepreneurs have to start with these six skills:

1) Self-Motivation: People who start their own businesses have typically worked in a larger organization and have
enjoyed the amount of control and autonomy that self- employment gives them, when they see the direct
rewards for labor, they are motivated to setup their own business. Money is also a big motivator.

Many top entrepreneurs have had unhappy experiences in childhood, and are motivated by something negative.
They want to go on and prove that they can succeed and are driven by control and power. And while those
negative experiences may drive many to set their own businesses in the first place, motivation grows with the
enterprise; those who run small businesses generally do so because their work is also their passion.

2) Self-Confidence: Every entrepreneur needs to be confident in themselves, their product and their business.
One needs to know that his product can truly help people and he is charging prices that are both fair to him and
his clients.
3) Ethics and Morals: Ethics and morals are the foundation of every good entrepreneur. Early on one must decide
what he and his business will stand for and what lines he will refuse to cross. Many entrepreneurs close their
doors because the dollar outshines their morals. If one stray too far from his morals he will give himself and his
business a bad name. No one wants to do business with someone who will not stand up for his own morals.

4) Time Management: One should schedule his day and stick to that schedule. This cannot be emphasized
enough. New entrepreneurs need to realize that every minute is valuable. When first starting out, most likely one
will not have enough “work” to fill an eight hour day. This does not mean that he has time to take a three hour
lunch with friends. He should utilize this time to learn more skills related to his business, find ways to advertise
and contact potential clients.

5) Sales: No matter how much you do not like the idea of it, every business has to work with sales. Each industry
and business has a unique way of handling its sales. As an entrepreneur, it is his job to figure out what type of
sales he will prefer and what type is best for his services or products. If he had ever worked in retail sales or
advertising he already have an edge on most other hopeful business people. All entrepreneurs will benefit from
sales seminars, books and motivational programs.

6) Financial Knowhow: When in business, knowledge of finance is a must. Knowing how to balance a check-book
and keep track of numbered invoices is all most small businesses need to start out. The most important aspect of
small business finance is scheduling time specifically for the finance management. Granted it helps to have an
accounting degree or extensive Quick Books knowledge but these skills are not mandatory.

7) Communication Skills: Businesspeople communicate by writing letters and memos, talking on the telephone,
and meeting with customers, suppliers, bankers, employees, and others. To succeed as an entrepreneur, he will
need to develop his writing, speaking and listening skills because he will use them everyday:

i) Writing Skills: As an entrepreneur, a person will have to frequently communicate in writing with customers,
suppliers and employees, among others. To do so effectively, he will need to develop his business writing skills.
Good business writing communicates ideas clearly. It also gets results by being positive and persuasive and by
convincing readers that they should accept what the writer is communicating.
ii) Speaking Skills: Much of our communication as a business owner will be conducted verbally either over the
telephone or face-to –face. How we yourself will have a big impact on the people with whom we deal.
iii) Listening Skills: Problems in business often occur because people fail to listen to each other.

As a business owner, we need to listen carefully to our employees. We also need to listen to bankers, suppliers,
customers and anyone else who may impact our business. What can we do to improve our listening skills?

8) Problem-Solving Skills: Many entrepreneurs make decisions casually or base them on intuition. As a result,
their decisions are based on faulty assumptions or illogical thinking. The best entrepreneurs use formal problem-
solving mechanisms to gather information and evaluate different options.

For many kinds of problems, a person will need to make decisions alone. For other kinds of decisions, however,
involving other people in the company in brainstorming and consensus- building techniques can make the most
of group decision- making.
 Classification of Entrepreneurs

According to the type of Business

Entrepreneurs are found in various types of business occupations of varying size.

1) Business Entrepreneurs: Business entrepreneurs are individuals who conceive an idea for a new product or
service and then create a business to materialize their idea into reality. They tap both production and marketing
resources in their search to develop a new business opportunity.

2) Trading Entrepreneur: Trading entrepreneur is one who undertakes trading activities and is not concerned
with the manufacturing work. He identifies potential markets, stimulates demand for his product line and creates
a desire and interest among buyers to go in for his engaged in both domestic and overseas trade.

3) Industrial Entrepreneur: Industrial entrepreneur is essentially a manufacturer who identifies the potential

needs of customers and tailors product or service to meet the marketing needs. He is product- oriented man who
starts in an industrial unit because of the possibility of making some new product. The entrepreneur has the
ability to convert economic resources and technology into a considerably profitable venture.

4) Corporate Entrepreneur: Corporate entrepreneur is a person who demonstrates his innovative skill in

organizing and managing a corporate undertaking. A corporate undertaking is a form of business organization,
which is registered under some statute or Act which gives it a separate legal entity.

5) Agricultural Entrepreneur: Agricultural entrepreneurs are those entrepreneurs who undertake such

agricultural activities as raising and marketing of corps, fertilizers and other inputs of agriculture. They are
motivated to raise the productivity of agriculture through mechanization, irrigation and application of
technologies for dry land agriculture.

According to the Use of Technology

The application of new technology in various sectors of the national economy is essential for the future growth of
business.

1) Technical Entrepreneur: “A technical entrepreneur is essentially an entrepreneur of “craftsman type.” He

develops new and improved quality because of his craftsmanship. He concentrates more on production than
marketing. The greatest strength, which the technical entrepreneur has is his skill in production techniques. 2)
Non-technical Entrepreneur: They are concerned only with developing alternative marketing and distributions
strategies to promote their business. 3) Professional Entrepreneur: Professional entrepreneur is a person who is
interested in establishing a business but dos not have interest in managing or operating it once it is established. A
professional entrepreneur sells out the running business and starts another venture with the sales proceeds. Such
an entrepreneur is dynamic and he conceives no ideas to develop alternative projects.

According to Motivation

Motivation is the force that influences the efforts of the entrepreneur to achieve his objectives. An entrepreneur
is motivated to achieve or prove his excellence in job performance. He is also motivated to influence others by
demonstrating his power thus satisfying his ego.
1) Pure entrepreneur: A pure entrepreneur is an individual who is motivated by psychological and economic
rewards. He undertakes an entrepreneurial activity for his personal satisfaction in work, ego or status.

2) Induces Entrepreneur: Induced entrepreneur is one who is induced to take up an entrepreneurial task due to
the policy measures of the government that provides assistance, incentives, concessions and necessary overhead
facilities to start a venture. Most of the entrepreneurs are induced entrepreneurs who enter business due to
financial, technical and several other facilities provided to them by the state agencies to promote
entrepreneurship.

3) Motivated Entrepreneur: New entrepreneurs are motivated by the desire for self-fulfillment. They come into
being because of the possibility of making and marketing some new product for the use of consumers. If the
product is developed to a saleable stage, the entrepreneur is further motivated by reward in terms of profit.

4) Spontaneous Entrepreneur: These entrepreneurs start their business out of their natural talents. They are
persons with initiative, boldness and confidence in their ability, which motivate them to undertake
entrepreneurial activity. Such entrepreneurs have a strong conviction and confidence in their ability.

According to Growth

The development of a new venture has a greater chance of success. The entrepreneur enters a new and open
field of business. The customer approval to the new product gives the psychological satisfactions and enormous
profit. The industrial units are identified as high growth, medium growth and low growth and low growth
industries and as such we have “Growth Entrepreneur” and “Super Growth Entrepreneur.”

1. Growth Entrepreneur: Growth entrepreneurs are those who necessarily take up a high growth industry. These
entrepreneurs choose an industry which has sustained growth prospects.

2. Super- Growth Entrepreneur: Super- growth entrepreneurs are those who have shown enormous growth of
performance in their venture. The growth performance is identified by liquidity of funds, profitability and gearing.

According to Stages of Development

i) First- Generation Entrepreneur: A first – generation entrepreneur is one who starts an industrial unit by means
of an innovative skill. He is essentially an innovator, combining different technologies to produce a marketable
product or service.

ii) Modern Entrepreneur: A modern entrepreneur is one who undertakes those venture which go well along with
the changing demand in the market. They undertake those ventures which suit the current marketing needs.

iii) Classical entrepreneur: A classical entrepreneur is one who concerned with the customers and marketing
needs through the development of a self- supporting ventures. He is stereotype entrepreneur whose aim is to
maximize his economic returns at a level consistent with the survival of the firm with or without an element of
growth.
According to Gender

i) Men Entrepreneur: Generally men are found as an entrepreneur in the society. When a male member of the
society performs the entrepreneurial functions, it is called men entrepreneur.

ii) Women Entrepreneur: In 1988, for first time, the definition of Women Entrepreneurs’ Enterprise was evolved
that termed an SSI unit? Industry- related service or business enterprise, managed by one or more women
entrepreneurs in proprietary concerns, or in which she/thy individually or jointly have a share capital or not less
than 1 percent as partners/shareholders/ directors of private limited company/ members of a cooperative
society, as a men Enterprise.

Women entrepreneurs have been on the Indian business scene for quite some time now and have achieved
remarkable success. Moreover, like any other entrepreneur, any first generation woman entrepreneur has to
compete in the business against those already will established.

Realizing the great untapped potential, the Government has been making concerned efforts to channelize the
skills and talent if women towards economic and business generating activities.

Others:

1) Innovating Entrepreneurs: Innovating entrepreneurship is characterized by aggressive assemblage of

information and analysis of results, deriving from a novel combination of factors. Men/ Women in this group are
generally aggressive in experimentation who exhibit cleverness in putting attractive possibilities into practice.
One need not invent but convert even old established products or services, by changing their utility, their value,
their economic characteristics, into something new, attractive and utilitarian.

2) Initiative Entrepreneurs: Imitative entrepreneurship is characterized by readiness to adopt successful

innovations by innovating entrepreneurs. They first imitate techniques and technology innovated by others.

Entrepreneurship Development

Entrepreneurship Development is defined as a process of enhancing the skillset and knowledge of entrepreneurs
regarding the development, management and organization of a business venture while keeping in mind the risks
associated with it. This is carried out through training programs and sessions which are aimed at accentuating
entrepreneurial acumen. Pursuing this field as a career, you will be working towards facilitating skill
development amongst budding entrepreneurs and assisting them to tackle their struggles with building their
businesses.

Process of Entrepreneurship Development Programme

Setting an Objective of the Program

Before starting the entrepreneurship development program, it is imperative to set a clear objective and draft a
plan as to what the program is aiming to accomplish. As someone who is organising this program, having a clear
direction and objectives play an important role in making it a success. The absence of both will result in loss of
time, money, effort and most of all, valuable potential of the individual.
Finding the Right Mentors/Training Professionals
The entrepreneurship development program’s main purpose is to help aspiring entrepreneurs furnish their
talents and learn the intricacies of operating a business. For, this you will require trained professionals who are
experienced in this domain and can impart their own life lessons to those who are just starting or facing
difficulties. Seek help from established entrepreneurs around you and ask them if they can conduct a session or
find those who have pursued a professional qualification in this field and enrol them for the session.

Identify Potential Local Talents and Markets

The entrepreneurship development process has been efficient and effective in the local markets and on the local
entrepreneurs who know about it. If you have planning to conduct sessions and programs related to this, the best
way to begin is to reach out to local markets. These localities can understand and absorb the knowledge more
quickly and can apply it in the current scenario, the effects of the program can easily and quickly be seen within
the community.

Choosing the right location to conduct the program

For any successful event, the choice of location and resources plays an imperative role. These developmental
programs must be launched in the areas where the program can attract a large number of people, who want to
take advantage of the program.

Tie Up with Institutions

In order to give a real-world experience to the aspirants and cater to people in various different fields, many a
time these entrepreneurship development programmes involve tie-ups with several NGOs, private institutions
and universities. This will help you organise better set-ups for the entrepreneurs to meet, communicate and
exchange their ideas.

Assess Effectiveness & Seek Feedback

At the conclusion of your entrepreneurship development session, ensure that you ask people for their honest
feedback and how it could have been better. Analyse how effective it has been to help budding entrepreneurs
find solutions to their issues. Be open to constructive criticism and try to incorporate important pointers into the
next program.

Entrepreneurial Environment

Introduction

 Entrepreneurship environment refers to the various facets within which enterprises- big, medium, small
and other have to operate. The environment therefore, influences the enterprise. By and large, an
environment created by political, social, economic, national, legal forces, etc influences entrepreneurship.
 Entrepreneurial environment is broadly classified into six important segments, namely, (1) Political
environment, (2) Economic environment, (3) Social environment, (4) Technological environment, (5) Legal
environment, and (6) Cultural environment

Environment

 Political-Political Atmosphere, Quality of Leadership

 Economic-Economic Policies, Labour, Trade, Tariffs, Incentives, Subsidies
 Social-Consumer, Labour, Attitudes, Opinions, Motives
 Technological-Competition And Risk, Efficiency, Productivity, Profitability
 Legal-Rules, Regulations
 Cultural-Structure, Aspirations And Values
Private Enterprise and Development
The existence of uncertainty in the economic call for the attention of entrepreneurs to play a leading role in the
growth process.
Individual entrepreneurs such as farmers and small businessmen and individual enterprises such as
manufacturing, construction, transport, and wholesale enterprises and collective farms continually face risks.
Whether they are privately or publicly owned, they must take account of uncertainty. Private entrepreneurs and
the managers of private enterprises take risk, despite the heavy costs of failure because of the possibility of high
profits or large bonuses. In any case, they must run their business efficiently if they are to make a profit and
survive.
The problem usually arises because major industrial decisions, which will affect the lives of thousands of ordinary
people, are taken without proper planning and without public consultation. The result is that environmental
activists have no choice but to fight a rear-guard action. This often gives the impression that environmental
activists are against all growth and industry. In fact, they are more than conscious of the need for a balanced
approach to growth and industry. All they say is that industrial decisions ought to be taken after considering the
impact on environment and also that the public has a right to know all details.
Environmental activists have repeatedly pointed out the havoc caused by some of our petrochemical, heavy
chemical, dyestuff and other polluting industries, as also the environmental damage caused by large-scale open
mining, quarrying and deforestation, which will take decades to reverse. For their dogged determination, these
environments deserve our gratitude.
At the same time, it is now clear that technology has advanced significantly to allow efficient use of resources.
Worldwide, industry has become conscious of the need to use renewable resources as far as possible and utilize
non-renewable resources within planned limits. With potential development taking place in the industry, we
should learn from past incidences of industrial disasters leading environmental disaster and ensure further
growth, consistent with environmental protection.
In contrast, the managers of public enterprises (whether directly or indirectly state-owned or collectively-owned)
tend to be risk averters. Indeed, risk-aversion is usually, and perhaps inevitably, the emphasis of public service
training.
Entrepreneurs and managers of these enterprises must be offered incentives to boost their efficiency and take
risks. In this case, devising appropriate incentives become imperative. A variety of possible measures- some
positive, such as bonuses for managers, and some negative, such as budget and operational controls- can be used
in the public sector; even so, the problem often remain intractable.
If an economy is made up of a large number of entrepreneurial units, risks can be spread among them. Even
though some enterprises may fail, others will be successful and the economy as a whole can grow rapidly. When
inefficient units do not have access to subsidies or to other public assistance, they must improve their
competitive position or disappear.
Such failures need not be excessively costly because the economy’s expansion creates job and income earning
opportunity for entrepreneurs and employees of falling enterprises. Some of these may be in “informal” or small-
scale activities and may not be counted in the formal employment sector. Nonetheless, they provide gainful
employment.
Unfortunately, experience shows that private enterprises have to compete to survive. In most countries public
enterprises are protected from failure by implicit or explicit subsidies. Public enterprises are often expected to
create employment opportunities for political reasons. But allowing public enterprises to operate inefficiently will
mean very heavy costs in the long run. It affects not only a country’s ability to produce efficiently but also its
capacity to save and invest for future production.
Significance of Entrepreneurial Environment
A study of socio-political and economic environment has a great social and economic significance to the growth
of entrepreneurship. Modern business is treated as a social and economic institution and is affected by the
political, social and economic forces. The political environment, industrial policy, licensing policy, foreign
exchange regulations, backing policy, technological development and social change form the framework within
which an enterprise has to work. It is for these reasons that all business plans must be based on the immediate
environment. An entrepreneurial plan cannot be framed and finalized for its implementation without its
relevance to the political, social, economical and technological requirements. In fact, it is environment, which
regulates entrepreneurial activities. Business environment has a positive relationship with the development of
entrepreneurship.

Environmental Analysis

This integrated approach, which is the key to the development of backward areas, implies a very careful
environment analysis or research study of the target groups of beneficiaries; their activities can be linked with the
covering enterprise. Unless these studies are made meticulously, the entire planning will only give unproductive
results. Most of the development schemes fail to benefit the target clientele because elaborate linkages are not
identified and built up. An imaginative study should

 Identify the beneficiaries or target group

 Analyze the environment for immediate feasible enterprises in an integrated manner;
 Delineate the linkage and institutional arrangement;
 Recommend appropriate organizational structures to provide necessary promotional support.

Unfortunately, in most of the studies on backward areas, there is a tendency to make generalization and ignore
the details of really feasible project. As a result, immediate perception of concrete opportunities by interested
entrepreneurs is left in confusion. Sometimes “Area Studies” make a general statement of demand and resources
and recommend certain enterprises, which are not immediately feasible due to important reasons unaccounted
for in such studies. It is also not seriously contemplated whether the recommended enterprises are feasible
within the capabilities and investment capacity of the target-group. In short, most of the studies fail to discern
the real issues of growth in the target area and fail to identify the concrete and specific needs of these
endowments like resource, skill etc. to flourish enunciation of general objectives and generic beneficiaries tend to
blur the distinct contours of one homogeneous group from the other.
Also, the extension of certain standard facilities or services does not serve their actual needs. All this possibly
happens because in such basic studies, we fail to identify clearly the target-group and their specific problems, and
make theoretical studies on resources and demand in an impersonal manner, as a result of which even the
schemes devised on the basic of such studies tend to become too impersonal and rigid.
Sometimes, the chemise become so inflexible on account of a standardized petrified approach that in some most
genuine cases demanding a certain departure from the fixed framework, the scheme is incapable of giving
requisite help. It is, therefore, absolutely necessary that any action plan for a backward area must first identify
the target-group, identify the specific services they need for monitoring their enterprises and devise an appropri-
ate, structural support for comprehensive coverage of their needs.
COMPARISON BETWEEN ENTREPRENEUR VS MANAGER

BASIS FOR ENTREPRENEUR MANAGER

COMPARISON
Meaning Entrepreneur refers to a person who Manager is an individual who
creates an enterprise, by taking takes the responsibility of
financial risk in order to get profit. controlling and administering
the organization.
Focus Business start-up On-going operations
Primary Achievement Power
motivation
Approach to task Informal Formal
Status Owner Employee
Reward Profit Salary
Decision making Intuitive Calculative
Driving force Creativity and Innovation Preserving status quo
Risk orientation Risk taker Risk averse
COMPARISON BETWEEN ENTREPRENEUR VS INTRAPRENEUR

BASIS FOR ENTREPRENEUR INTRAPRENEUR

COMPARISON

Meaning Entrepreneur refers to a person Intrapreneur refers to an employee of

who set up his own business the organization who is in charge of
with a new idea or concept. undertaking innovations in product,
service, process etc.

Approach Intuitive Restorative

Resources Uses own resources. Use resources provided by

the company.

Capital Raised by him. Financed by the company.

Enterprise Newly established An existing one

Dependency Independent Dependent

Risk Borne by the Taken by the company.

entrepreneur himself.

Works for Creating a leading position in Change and renew the existing
the market. organizational system and culture.

ROLE OF ENTREPRENEURSHIP IN ECONOMIC DEVELOPMENT

Entrepreneurs initiate and sustain the process of economic development in the following ways:

1. Capital Formation:

Entrepreneurs mobilize the idle savings of the public through the issues of industrial securities. Investment of
public savings in industry results in productive utilization of national resources. Rate of capital formation
increases which is essential for rapid economic growth. Thus, an entrepreneur is the creator of wealth.

2. Improvement in Per Capita Income:

 Entrepreneurs locate and exploit opportunities. They convert the latent and idle resources like land, labour
and capital into national income and wealth in the form of goods and services. They help to increase net
national product and per capita income in the country, which are important yardsticks for measuring
economic growth.

3. Generation of Employment:

Entrepreneurs generate employment both directly and indirectly. Directly, self-employment as an

entrepreneur offers the best way for independent and honorable life. Indirectly, by setting up large and small
scale business units they offer jobs to millions. Thus, entrepreneurship helps to reduce the unemployment
problem in the country.

Balanced Regional Development:

Entrepreneurs in the public and private sectors help to remove regional disparities in economic development.
They set up industries in backward areas to avail various concessions and subsidies offered by the central and
state governments.

Public sector steel plants and private sector industries by Modis, Tatas, Birlas and others have put the hitherto
unknown places on the international map.

4. Improvement in Living Standards:

Entrepreneurs set up industries which remove scarcity of essential commodities and introduce new products.
Production of goods on mass scale and manufacture of handicrafts, etc., in the small scale sector help to
improve the standards of life of a common man. These offer goods at lower costs and increase variety in
consumption.

5. Economic Independence:

Entrepreneurship is essential for national self-reliance. Industrialists help to manufacture indigenous

substitutes of hitherto imported products thereby reducing dependence on foreign countries. Businessmen
also export goods and services on a large scale and thereby earn the scarce foreign exchange for the country.

Such import substitution and export promotion help to ensure the economic independence of the country
without which political independence has little meaning.

6. Backward and Forward Linkages:

An entrepreneur initiates change which has a chain reaction. Setting up of an enterprise has several backward
and forward linkages. For example- the establishment of a steel plant generates several ancillary units and
expands the demand for iron ore, coal, etc.
These are backward linkages. By increasing the supply of steel, the plant facilitates the growth of machine
building, tube making, utensil manufacturing and such other units.

Entrepreneurs create an atmosphere of enthusiasm and convey a sense of purpose. They give an organization
its momentum. Entrepreneurial behavior is critical to the long term vitality of every economy. The practice of
entrepreneurship is as important to established firms as it is to new ones.