Entrepreneurship Concept Easy Notes-2022

MDU BBA NOTES

SEMESTER-1

Business Organisation

Entrepreneurship Concept

Entrepreneurship Concept Easy Notes-2022


Definition of Entrepreneurship Concept

Define Entrepreneur 

According to Richard Cantillon- Define Entrepreneur, “An agent who buys factors of production at certain prices in order to combine them into a product with a view to selling it at an uncertain price in future”.

That means the entrepreneur makes a decision about obtaining and using resources while assuming the risk of the enterprise.

There is no single way of defining an Entrepreneur. Different scholars have defined an Entrepreneur differently. A look at various definitions will help me understand the concept in depth.

According to Oxford Dictionary, “An entrepreneur is someone “who sets up a business or businesses, taking on financial risks in the hope of profit”.

Entrepreneurship Concept

Innovation, creativity, and risk-bearing are integral parts of being an entrepreneur. It involves the ability to create and conceptualize something new, which can consist of anything from a new product to a new distribution system to a method for developing a new organizational structure.

Definition of Entrepreneurship

Although there is no official definition of entrepreneurship, the following one has evolved from work done at Harvard Business School and is now generally accepted by authors: “Entrepreneurship is the process of creating or seizing an opportunity and pursuing it regardless of the
resources currently controlled” (Timmons, 1994).

Entrepreneurship Concept- Drucker says “Entrepreneurship is “risky” mainly because so few of the so-called entrepreneurs know what they are doing.” He further proposed that ‘entrepreneurship’ is a practice. What this means is that entrepreneurship is not a state of being nor is it characterized by making plans that are not acted upon. Entrepreneurship begins with action and the creation of a new organization.

Entrepreneurship can be summed up as nothing but the process of creating something new with value, particularly responding to the opportunities available. It involves time, effort, and the assumption of risk, with the expectation of receiving the rewards at the end. The rewards can take any form- monetary or non-monetary (personal contentment).

Nature And Characteristics of Entrepreneurs

The nature And Characteristics of Entrepreneurs are various but some important nature and characteristics there are:-

Nature And Characteristics Entrepreneur

Motivation

Entrepreneurs are passionate, buoyant, and highly self-motivated. They have high energy levels and are always willing to take initiatives. They always keep thinking about their business and how to increase the market share, how to improve their existing processes.

Risk Tolerance

The establishment of any entrepreneurial venture is risky and the entrepreneur has to assume risk. As risk and rewards are inseparable, in order to grow, the entrepreneur should have a large appetite for assuming risk.

Vision

One of the major responsibilities of an entrepreneur, as founder and head of the company, is deciding where the business should go. That requires a strong vision on the part of an entrepreneur.

Mental ability and Creativity

The entrepreneur should anticipate changes and must be able to study the various situations under which decisions have to be made. Successful entrepreneurs have the creative ability to recognize and pursue opportunities. They are always on the lookout for new ways of doing things, launching new products, providing new services, etc.

Clear Objectives

An entrepreneur has clarity about the objectives to be achieved in the business, the nature of goods to be produced and subsidiary activities to be undertaken. This clarity in objectives helps them to translate their business idea into reality.

Good Communication Skills

This basically pertains to communicating effectively. An entrepreneur who can effectively communicate with customers, employees, suppliers, and creditors will be more likely to succeed than an entrepreneur who does not.

Human Skills

The most important personality factors contributing to the success of any entrepreneur include emotional stability, good inter-personal relations, consideration, and tactfulness. An entrepreneur has to maintain good relations with his customers so as to encourage them to continue to patronize his business. He must also maintain good relations with his employees so as to motivate them to perform their jobs with a high level of efficiency.

Functions of an Entrepreneur

The function of an Entrepreneur follows here:-

Functions of an Entrepreneur

Innovation

Innovation and creativity are at the heart of the functions of an entrepreneur. According to Schumpeter (1934), the key ingredient of entrepreneurship is the innovativeness of the individual. Innovation implies doing new things or doing the same things in a new manner. It may be: Introduction of a new product or service, new methods of production, discovering new markets, or finding a new source of material, etc.

Risk measurement and risk taking

the entrepreneurial function primarily involves risk measurement and risk-taking. The risks are not only in relation to the uncertainty to the success of the new business venture but also on the personal and professional front like career opportunities foregone for the sake of starting the new venture family relation and psychic well-being. Though risk-taking is unavoidable, yet entrepreneurs prefer to take moderate risks in those situations, where they have some degree of control. They do not prefer situations that involve either extreme of risk or certainty.

Analyze the opportunities and threats

An entrepreneur has to be a seeker of opportunities. The environment may present a number of opportunities for an entrepreneur. He needs to analyze such opportunities from time to time and choose the most appealing one at the right time for creating a new venture. He should possess the capability and skills to formulate strategies for the new business venture, keeping in mind the threats being posed to the venture

Organization of the Venture

The entrepreneur brings together various factors of production like capital, manpower, machinery, land, building, etc. to start a venture. He needs to have suitable skills to deploy suitable resources in the right activities at the right time in order to avoid wastage and to optimally utilize the resource in starting up the new venture.

Organization of the Venture

The entrepreneur brings together various factors of production like capital, manpower, machinery, land, building, etc. to start a venture. He needs to have suitable skills to deploy suitable resources in the right activities at the right time in order to avoid wastage and to optimally utilize the resource in starting up the new venture.

Development and growth of the venture

Many of the newly established ventures are not able to survive for long. They require the active involvement of the entrepreneur during the development and growth stages as well. During the growth stage of a new venture, when it starts growing in size, an entrepreneur needs to delegate routine activities to other colleagues/subordinates in the organization while providing strategic vision and direction to the firm as a leader.

Supervision and control

When routine matters are delegated to the subordinates, it becomes imperative to have suitable control mechanisms in place so that the entrepreneur may track the overall well-being of the enterprise. Personal observation, reporting, and more sophisticated techniques of control may have to be employed.


Definition of Entrepreneurship Concept, Nature And Characteristics of Entrepreneurs, Functions of an Entrepreneur

 

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