Introduction to Entrepreneurship Notes, Definition of Entrepreneurship, Meaning of Entrepreneurship, Distinguish Between Entrepreneur and Entrepreneurship, Entrepreneurial Skills, Factors Affecting Entrepreneurial Growth, Types of Entrepreneurs.
Introduction to Entrepreneurship
Definition: One who undertakes an enterprise, especially a contractor - acting as an intermediary between capital and labour.
Entrepreneurship involves not only the process that leaf's to the setting up of a business entity but also the expansion and development of an ongoing concern. The study of entrepreneurship is concerned with entrepreneurial behaviour, the dynamics of business set up and expansion and development.
The Evolution of Entrepreneurship Theory
Adam smith (1776): An entrepreneur is a person who acts as an agent in transforming demand into supply.
JB Says (1803): An entrepreneur is a person who shifts resources from an area of low productivity to high productivity.
John Stuart Mill (1871): An entrepreneur is a prime mover in the private enterprise. The entrepreneur is the fourth factor of production after land, labour and capital.
Car Menger (1871): The entrepreneur act as an economic agent who transforms resources into products and services. The entrepreneur transforms and gives added value.
Alfred Marshall (1936): The process of entrepreneurship or business development is incremental or evolutionary. It evolves from a sole proprietorship to a public company.
Distinguish Between Entrepreneur and Entrepreneurship
Classification of Entrepreneurs
Innovating Entrepreneurs: One who introduces a new well, inaugurates a new method of production, and discovers a new market.
Imitating Entrepreneurs: These are characterized by readings to adopt successful innovations inaugurated by innovating entrepreneurs.
Fabian Entrepreneurs: These are characterized by great caution and scepticism in experimenting with any changes in their enterprises.
Drone Entrepreneurs: These are characterized by a refusal to adopt opportunities to make changes in the production formulae even at the cost of severely reduced returns relative to the other like producers.
Functions and Scope of Entrepreneurship
- Risk Taking and Uncertainity Bearing
- Taking business decision
- Managerial Functions
- A Risk Taker
- An Organization Builder
- Resource Assembler
- An Innovator
Factors Affecting Entrepreneurial Growth
- Economic Factor
- Social Factor Cultural Factor
- Personality Factor
Traits mean distinguishing qualities or characteristics belonging to a person. Some of the entrepreneurial traits are:
- Self Discipline
Sole Proprietorship: Business Owned and operated by one individual.
Partnership: A legal relationship formed by the agreement between two or more individuals to carry on a business as co-owners.
Joint Stock Company: A voluntary association of persons to carry on business. Members of the joint stock company are known as shareholders and capital is share capital.
Corporative Society: Any ten persons can form a cooperative society. It functions under the cooperative societies Act, of 1912 and other state co-operative societies Acts.
An Intrapreneur is defined as "any of the dreamers who do" and those who take a hand in the responsibility for creating innovation of any kind within the organization.
The intrapreneur may be a creator or inventor but he is always a dreamer who finds out how to turn an idea into a profitable reality.
- Encourage Teamwor
- Open to Discussion and Idea
Social Responsibility of an Entrepreneur Towards:
Customers - sell quality products at a fair price.
Society/community - job creation and environmental observation.
Suppliers - Be fair with his suppliers by paying them on time as agreed upon.
Staff - Promote the welfare of his employees.
Competitors - Observe business ethics with his competitors.
Country - Must pay the correct amount of taxes to the government.
Problems Faced by Entrepreneurs:
- Barriers of Infrastructure
- Professional Barriers
- Education and Training Barriers
- Social and Cultural Barriers
- Legal Barriers