ENTREPRENEURIAL DEVELOPMENT
ENTREPRENEURIAL DEVELOPMENT
Evolution of Concept
The word ‘entrepreneurs’ is derived from the French
verb ‘entreprendre’. It means to ‘undertake’ it originally means
that to designate an organize of musical or other
entertainments. Oxford dictionary in 18 “the director or a
manager of a public musical institution, one who ‘gets up’
entertainment, especially musical performance”. In it the early
16th century entrepreneur was applied to those who were
engaged in military expeditions. In the 17 th century it was
considered as to cover civil engineering activities such as
construction and notification. It was only in 18th century the
word entrepreneur was used to cover economic aspects. The
term entrepreneur is used in various ways and terms. The views
are broadly classified in three ways.
 Risk bearer
 Organizer and
 Innovator
Risk Bearer:
In 18th century Richard Cantillon an Irish man living in
France, was first used entrepreneur and defined as An agent
who buys factors of production at certain prices in order to
combine them in to a product with a view entrepreneurs are
risk bearing agents of product.
Knight also described entrepreneur to be a specialized
group of persons who bear uncertainty. Uncertainty can be
defined as a risk which cannot be in insured against and is
incalculable.
As an Organizer:
Jean Baptiste says “One who combines the land of one
the labour of another and capital of yet another and thus
produces a product. By selling the product in the market he
pays interest on capital, rent on land wages to laborers and
what remains is his/her profit. Thus he made a clear distinction
between the role of capitalist as a financed and entrepreneurs as
a organizer.
As an Innovator:
Joseph A Schumpeter in 1934 in his book “theory of
economic development” he says economic development as a
discrete dynamic change brought entrepreneur by instituting
new combination of production i.e, .innovations. According to
him introduction of new product may occur in any of following
five norms:
1. Introduction of new product in the market
2. The instituting of new production technology which is
not yet tested by experience in the branch of
manufacture.
3. Opening of new market into which the specific product
has not previously entered.
4. The discovery of new source of supply raw material
5. The carrying out of the new form of organization of any
industry b creating of monopoly position or the
breaking of it.
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An individual who, rather than working as an 8. Recruitment of men.

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

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eh cost of severely reduced returns relative to other like

producers. 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. 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, organizing, 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, employ a few employees. In the beginning
most of entrepreneurs start their enterprise like them. and principles.
Active partners: Both managers and entrepreneurs are answerable for
Active partners are those entrepreneurs who start/carry
on an enterprise as a joint venture. It is important that all of producing results. Both have to produce results through people
them actively participate in the operations of the business. working with them though they deal with different sets of
Inventors:
Such entrepreneurs with their competence and people. Both are decision makers but the decisions are different
inventiveness invent new products. Their basic interest lies in as their tasks vary. Both have to operate under constraints
research and innovative activities.
Buyers: which are understandably different. To be effective in their
These are those entrepreneurs who do not like to bear respective roles, both have to follow sound principles of
much risk. Hence, in order to reduce risk involved in setting up
a new enterprise, they like to buy the ongoing one. management like planning, staffing, delegation and control.
Lifetime:
These entrepreneurs take business as an integral part of
their life. Usually, the family enterprise and businesses which
mainly depend on exercise of personal skill fall in this
type/category of entrepreneurs.

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Points Entrepreneur Manager

Motive The main motive of an entrepreneur is to start a venture Here, the motive of manager is to render his services in
by setting up of an enterprise. He standards the venture an enterprise already set up by entrepreneur.
for his personal gratification.
functions The major functions of an entrepreneur are risk The major functions of a manager are planning,
bearing, organizing and innovation. organizing, staffing, directing, controlling and other
such managerial functions.
Status An entrepreneur is the owner of the enterprise A manager is the servant in the enterprise owned by the
entrepreneur.
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.
running the enterprise.
Rewards The reward of the entrepreneur is profit which is highly A manager gets salary as reward for the services
uncertain. rendered by him in the enterprise. The salary is certain
and fixed.
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. Thus, a manager simply translates the
customers. Hence, he acts as an innovator also called a entrepreneur’s ideas into practice.
change agent.
Qualification An entrepreneur needs to possess qualities and A manager needs to posses distinct qualifications in
qualifications like high achievement motive, originality terms of sound knowledge in management theory and
in thinking, foresight, and risk bearing ability and so practice.
on.
Decision making All policy and strategic decisions such as expansion, All the managerial and operational decisions relating to
diversification, take-overs, amalgamations, mergers, day to day activities of he business of the firm are taken
reorganization, capital budgeting, pricing, credit by the manager.
granting etc. are taken by the entrepreneur.

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Entrepreneur and Entrepreneurship 2. Decision making

The entrepreneurship is the elusive concept. Many 3. Risk-taking
others defined it in many ways such as risk bearing, innovating, 4. Innovation
and thrill-seeking. Let’s see some definitions. 5. Organization
In the opinion of A. H Cole: 6. Skilful management
Entrepreneurship is the purposeful activity of an 7. Making the enterprise a succes
individual or a group of associated individuals, undertaken to
initiate, maintain or aggrandize profit by production or Relationship between Entrepreneur and the
distribution of economic goods and services. Entrepreneurship
Entrepreneurship is the process undertaken by an Entrepreneur Entrepreneurship
entrepreneur to augment his business interests. It is an exercise • Person • Process
• organizer • Organization
involving and creativity that will go towards establishing hi/her
• Risk-bearer • Risk bearing
enterprise. • 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. • Imitator • Imitation

Characteristics of Entrepreneurship
1. Accepting challenges

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INTRAPRENEUR
A new breed of entrepreneurs is coming to the fore in large industrial organizations. They are called ‘intrapreneurs’. They
emerge from within the confines of an existing enterprise. In big organizations, 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. The
concept of Intrapreneurship has become very popular in developed countries like America.
It was Gifford Pinchot III, an American Management expert, who used the term ‘intrapreneur’ for the first time in 1983. 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.
"Intrapreneurship refers to employee initiatives in organizations to undertake something new, without being asked to do so".
This Intrapreneur focuses on innovation and creativity and who transforms a dream or an idea into a profitable venture, by operating
within the organizational environment. Thus, Intrapreneurs are inside entrepreneurs who follow the goal of the organization.

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. 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.
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. cannot convert them on his own account.

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