The word entrepreneurship has been derived from a French root which means " to undertake". It is also called by various names, e.g. adventurism, risk taking, thrill seeking, innovating, etc.
Jaffrey A. Timmons has defined entrepreneurship as "the ability to create and build something from practically nothing. Fundamentally, a human creative activity, it is finding personal energy by initiating, building and achieving an enterprise or organization rather than by watching, analyzing or describing one. It requires the ability to take calculated risk and to reduce the chance of failure….."
According to A.H.Cole "entrepreneurship is the purposeful activity of an individual or a group of associated individuals, undertaken to initiate, maintain or aggrandize profit by production or distribution of economic goods and services."
Characteristics and Significance
A Function of High Achievement: People having high need for achievement are more likely to succeed as entrepreneurs, according to McClelland. Motive is high achievement and profit is merely a measure of success and competency.
Innovation: According to Schumpeter, entrepreneurship is a creative activity. An entrepreneur is basically an innovator who introduces something new into the economy.
Organization Building Function: According to Harbison, Organization Building skill means the ability to " multiply oneself" by effectively delegating responsibility to others.
A Function of Managerial Skills and Leadership: Managerial skills and leadership qualities are more important than financial skills
A Function of Status Withdrawal: According to Hagen," Creative innovation or change is the fundamental feature of economic growth. He describes an entrepreneur as a creative problem solver interested in things in the practical and technological realm.
Types of an Entrepreneur
Innovating Entrepreneur:
Aggressive in experimentation and clever in putting attractive possibilities into practice.
Adoptive or Imitative Entrepreneurs:
They adopt best practices. Imitative entrepreneurs are revolutionary and important.
Fabian Entrepreneurs:
Drone Entrepreneurs:
Against any change in production method even at the cost of losses.
Forced Entrepreneurs:
They become entrepreneurs on account of circumstances
Functions of an Entrepreneur
Perceiving market opportunities
Gaining command over scarce resources
Managing human relations within firms
Marketing of the products
Responding to the competition
Dealing with bureaucracy
Managing finance
Upgrading process and product quality
Managing costumer and supplier relations
Introducing new production techniques and products
Risk Taking
Organization and management
Qualities of a good entrepreneur
According to McClelland:
An unusual creativeness
A propensity of risk taking
A strong need for achievement
According to Prof. Tandon :
1. Capacity to assume risks
2. Technical Knowledge and willingness to change
3. Ability to marshal resources
4. Ability of organization and administration
According to more than fifty research studies:
- Total commitment, determination and perseverance
- Drive to achieve and grow
- Opportunity and goal orientation
- Taking initiative and personal responsibility
- Persistent problem solving
- Realism and sense of humor
- Seeking and using feedback
- Calculated risk taking and risk seeking
- 9. Low need for status and power
11. Capacity to work hard
12. Self Motivation
13. Vision and foresight
14. Sound Judgment
15. Flexibility and sociability
16. Persistence in the face of adversity
17. Will to conquer and impulse to fight
Entrepreneurial Motivation Factor
Educational background
Occupational Experience
Desire to work independently
Desire to branch out to manufacturing
Family background
Assistance from Government
Assistance from financial institution
Availability of technology/raw material
Profit margin
Desire for taking personal responsibility
Anticipation of future possibilities
Success stories of entrepreneurs
To gain social prestige
Heavy Demand
Technical knowledge
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