INTRODUCTION

A businessman is a person who starts a business on an old concept or

idea and makes his place in the market with his efforts and dedication.
Whereas a person who brings his unique idea, creates the market for
his own business to run a startup company is known as an
entrepreneur.
Concept of Entrepreneurship
An enterprise is created by an entrepreneur. The process of creation
such an enterprise is called “entrepreneurship”. Entrepreneurship is a
process of actions of an entrepreneur who is a person always in search
of something new and exploits such ideas into gainful opportunities
by accepting the risk and uncertainty with the enterprise.
The capacity and willingness to develop, organize and manage a
business venture along with any of its risks in order to make a profit.
It is an act of seeking investment and production opportunity,
developing and managing a business venture, so as to undertake
production function, arranging inputs like land, 5 labour, material and
capital, introducing new techniques and products, identifying new
sources for the enterprise.
Meaning of Entrepreneur The word “entrepreneur” is derived from
the French verb enterprendre, which means ‘to undertake’. This refers
to those who “undertake” the risk of new enterprises.
Definition of Entrepreneur According to economist Joseph Alois
Schumpeter (1883-1950), “Entrepreneurs are not necessarily
motivated by profit but regard it as a standard for measuring
achievement or success”. According to Merriam Webster,
Entrepreneur is a person “one who organizes, manages and assumes
the risks of a business or enterprise”
  An Entrepreneur is an initiator, a challenger and a driver who
creates new product/ service or does normal things in a different
way in the market which includes his Innovations or Creativity.
 Entrepreneur in order to carry out his business/ project will start
up and organize a venture/ enterprise to take benefit of an
opportunity and, as the decision maker, decides what, where,
when and how much of goods or service to be produced/
distributed.
 Entrepreneur combines capital, land, and labor to manufacture
goods or provide services through the formation of a firm. In a
market full of uncertainty, it is the entrepreneur who can actually
help clear up uncertainty, as he makes judgments or assumes the
risk.
 Entrepreneurship is high-risk, but also can be high-reward as it
serves to generate economic wealth, growth, and innovation.

CONCEPT OF ENTREPRENEUR
The word “Entrepreneur” is derived from the French verb
‘entrepredre’. It means ‘to undertake’.
In the early 16th century the Frenchmen who organized and led
military expeditions were referred as ‘Entrepreneurs’. In the early
18th century French economist Richard Cantillon used the term
entrepreneur to business. Since that time the word entrepreneur means
one who takes the risk of starting a new organization or introducing a
new idea, product or service to society.
According to J.B. Say, “ An Entrepreneur is the economic agent who
unites all means of production, land of one, the labour of another and
the capital of yet another and thus produces a product. By selling the
product in the market the pays rent of land, wages to labour, interest
on capital and what remains is his profit”. Thus an Entrepreneur is an
organizer who combines various factors of production to produce a
socially viable product.
An entrepreneur can be regarded as a person who has the initiative
skill and motivation to set up a business or enterprise of his own and
who always looks for high achievements. He is the catalyst for social
change and works for the common good. They looks for
opportunities, identifies them and seizes them mainly for economic
gains.
An action oriented entrepreneur is a highly calculative individual who
is always willing to undertake risks in order to achieve their goals.
According to Joseph Schumepeter, “An entrepreneur in an advanced
economy is an individual who introduces something new in the
economy, a method of production not yet tested by experience in the
branch of manufacture concerned, a product with which consumers
are not yet familiar, a new source of raw material or of new market
and the like”.
According to Cantillon “An entrepreneur is the agent who buys
factors of production at certain prices in order to combine them into a
product with a view to selling it at uncertain prices in future”. To
conclude an entrepreneur is the person who bears risk, unites various
factors of production, to exploit the perceived opportunities in order
to evoke demand, create wealth and employment.
The term ‘entrepreneurship’ is often used synonymously with the
term ’Entrepreneur’ though, they are two sides of the same coin,
conceptually they are different. Entrepreneurship is the indivisible
process flourishes, when the interlinked dimensions of individual
psychological entrepreneurship, entrepreneur traits, social
encouragement, business opportunities, Government policies,
availability of plenty of resources and opportunities coverage towards
the common good, development of the society and economy.
Entrepreneurship is the process of identifying opportunities in the
market place, arranging the resources required to pursue these
opportunities and investing the resources to exploit the opportunities
for long term gains. It involves creating wealth by bringing together
resources in new ways to start and operate an enterprise.
According to Cole “Entrepreneurship is the purposeful activity of an
individual or a group of associated individuals undertaken to initiate,
maintain and aggrandize profit by production or distribution of
economic goods and services”.
According to Higgins “Entrepreneurship is meant the function of
foreseeing investment and production opportunities, organizing an
enterprise to undertake a new production process, raising capital,
hiring labour, arranging the supply of raw materials, finding site,
introducing a new technique, discovering new resources or raw
materials and selecting top managers for day to day operations of the
enterprise”.
The above definitions highlights risk bearing, innovating and resource
organizing aspects and an individual or group of people achieve goal
through production or distribution of products or services. To
conclude entrepreneurship is set of activities performed by an
entrepreneur thus, entrepreneur proceeds entrepreneurship.
Evolution of the Concept ‘Entrepreneur’
The term entrepreneur is as old as civilization. It has been in use for
the last five centuries. In early 16th Century it was referred to persons
engaged in military expeditions, during 17th Century it was extended
to persons engaged in engineering activities like construction etc and
in the beginning of 18th Century it was used to refer to persons
engaged in economic aspects of human activities.
Renowned economists David Ricardo and Adam Smith in the „Wealth
of Nations‟ during 1776 ignored the role of entrepreneur in economic
development. They hardly distinguished between the entrepreneurial
function from that of pure entrepreneurship of capital. The economic
development to them seemed to be automatic and self-regulated. The
concept of entrepreneurship has been shady during the period of
English Classical Economists.

The word „entrepreneur‟ is derived from the French word

“entreprendre‟ which means „to undertake‟. The term entrepreneur
was first coined by Richard Cantillon, a French baker in 18th Century
to mean, “A person who is uncertainty bearer”. Richard Cantillon, an
Irishman living in France was the first person who used the term
entrepreneur for economic activities. [Link] another Frenchman,
expanded Cantillon‟s ideas and said that entrepreneur is “an
organizer who combines various factors of production to produce a
socially viable product”.
The word „entrepreneur‟ has an interesting history starting
from French language to till date which can be understood with the
help of following definitions given by eminent entrepreneurs and
economists:

An entrepreneur is the agent who buys means of production at certain

prices in order to combine into a product that he is going to sell at
prices that are uncertain at the moment at which he commits himself
to his costs.
-Richard Cantillon

An entrepreneur is the economic agent who unites all means of

production, the labour, the capital or land and who finds the value of
product which results from their employment, the reconstruction of
the entire capital that he utilises and the value of wages, the interest
and the rent that he pays as well as profit belonging to himself.
-[Link]

Entrepreneur is one who seeks to reform or revolutionise the pattern

of production by exploiting an innovation or more generally, an
untried technological possibility for producing a new commodity or
producing an old one in a new way, by opening up a new source of
supply of material or a new outlet of products.
-Joseph Schumpeter

Entrepreneurs are a specialised group of persons who undertake the

risk and deal with uncertainty. Entrepreneur is the economic
functionary who undertakes responsibility which cannot be insured.
–[Link]

Entrepreneur is one who endowed with more than average capacities

in the task of organising and co-ordinating the factors of production
i.e, land, labour, capital and enterprise. Entrepreneur is a pioneer, a
leader and captain of the firm. Hence, profit, the entrepreneur gets
depends upon his efficiency and superior talent.
-F.A. Walker

An entrepreneur is one who always searches for change, responds to it

and exploits it as an opportunity. Innovation is considered as an
instrument of entrepreneurship. An entrepreneur innovates and creates
resources because there is no such thing as resource until somebody
finds a use for something and endows economic value to it.
Innovation is being presented as a discipline, capable of
being learnt and capable of being practised.
-Peter [Link]

Thus, the fact remains that the term „entrepreneur‟ has been defined
differently by different writers and thinkers.
These views expressed above are broadly classified into three groups,
namely:
 Risk-bearer
 Organizer, and
 Innovator
Entrepreneur as Risk-Bearer: In 18th Century Richard Cantillon
defined entrepreneur as a capitalist. According to him
entrepreneurship is a matter of foresight and willingness to
assume risk. He defined entrepreneur as an agent who buys factors of
production at certain prices in order to combine them into a to selling
it at uncertain prices in future.
He illustrated it with the help of an example. A farmer has to pay
contractual incomes, which are certain, to the landlords
and labourers and sells at prices that are „uncertain‟. He also explains
that so with the merchants who make certain payments in expectation
of uncertain receipts. So a farmer or merchant both are considered as
„risk bearing‟ agent of production.
[Link] also described entrepreneur as specialized group of
persons who bear risk and ready to face uncertainty. Uncertainty
cannot be insured against future contingencies and is incalculable.
Knight differentiates ordinary risk with uncertainty. According
to him a risk can be reduced by taking the insurance policy where the
occurrence of something is known. On the other side, uncertainty is
the risk which cannot be calculated. Thus, Knight describes
entrepreneur as the economic functionary who undertakes such
responsibility of uncertainty which cannot be insured.
Entrepreneur as Organizer:
J.B. Say, a French economist, also developed further the concept
of entrepreneur, which survived for almost two centuries. He
associates entrepreneur with the functions of coordination,
organization and supervision. Say was the first economist to
differentiate the function and remuneration of the entrepreneur from
those of the capitalist. He emphasized coordination and supervision
and recognized entrepreneur as the most important agent of
production as he brings together other productive factors and provides
continuity of management.
According to Say, entrepreneurship is the combination of three
factors;
i) Moral qualities for the work consisting of judgment,
perseverance and knowledge of business environment,
ii) command over capital resources and
iii) effective utilisation and administration to
overcome uncertainty of profits. Thus, Say‟s entrepreneur shifts
economic resources out of an area of lower productivity into an
area of higher productivity and greater yield.
Marshall during 1936 also focused the relevance
of organisation among the various services of special class of business
undertakers.
Entrepreneur as Innovator: During 1934 Schumpeter in his
magnum opus „Theory of Economic Development‟ highlighted the
role of entrepreneur as “Innovator”. According to him entrepreneur is
basically an innovator who carries out new combinations of factors of
production to initiate and accelerate the process of economic
development. Innovations may be occurred in any of the following
forms:

i) Introducing new product in the market

ii) Introducing new methods of production
iii) Opening of a new market
iv) Discovering new sources of raw material
v) Carrying of new organisation of any industry

Schumpeter differentiates between inventor and an innovator.

According to him an inventor is one who discovers new factors of
production like men, material, machine and methods and an innovator
utilizes these inventions and discoveries to make new combination of
factors of production. He argued on the fact that the entrepreneur may
or may not be the inventor and therefore, he may or may not
be supplier of capital. Major different between the inventor and
innovator is that the former creates idea and the latter gets it
converted into reality.

However, Schumpeter‟s theory is based on certain assumptions

like prevalence of capitalist society with private property, private
initiative, money and banking system etc. The applicability of his
theory is doubtful in under developed countries where the poor
infrastructure and lack of capital may block the innovativeness.

The most recent definition of entrepreneurship is given

by Knowledge Commission of India with special reference to India.
According to NKC “entrepreneurship is defined as the profession
application of knowledge, skills and competencies and/or of
monetizing a new idea, by an individual or a set of people by
launching an enterprise de novo or diversifying from an existing one
(distinct from seeking self-employment as in a profession or trade),
thus, to pursue growth while generating wealth, employment and
social good”.

Characteristics of Entrepreneur
1. Creativity. 2. Professionalism. 3. Risk-taking. 4. Passion. 5.
Planning. 6. Knowledge. 7. Social Skills. 8. Open-mindedness
towards learning, people, and even failure. 9. Empathy 10. Customer
is Everything
1. Creativity: Entrepreneurs usually have the knack to pin down a lot
of ideas and act on them. Not necessarily every idea might be a hit.
But the experience obtained is gold. Creativity helps in coming up
with new solutions for the problems at hand and allows one to think
of solutions that are out of the box. It also gives an entrepreneur the
ability to devise new products for similar markets to the ones he’s
currently playing in.
2) Professionalism: Professionalism is a quality which all good
entrepreneurs must possess. An entrepreneurs mannerisms and
behavior with their employees and clientele goes a long way in 7 and
discipline. Self-discipline enables an entrepreneur to achieve their
targets, be organized and set an example for everyone. Reliability
results in trust and for most ventures, trust in the entrepreneur is what
keeps the people in the organization motivated and willing to put in
their best. Professionalism is one of the most important characteristics
of an entrepreneur.
3) Risk-taking: Risk-taking ability is essential for an entrepreneur to
discover something unique which makes all the difference.
entrepreneurs are always ready to invest their time and money. But,
they always have a backup for every risk they take. Also, evaluation
of the risk to be undertaken is also essential. Without knowing the
consequences, a good entrepreneur wouldn’t risk it all.
4) Passion: Passion acts as a driving force, with which, entrepreneurs
are motivated to strive for better. At the beginning of every
entrepreneurial venture or any venture, there are hurdles but passion
ensures that entrepreneurs are able to overcome these roadblocks and
helps in attaining their goal. With passion they are willing to put in
those extra hours to make the business succeed because there is a joy
their business gives which goes beyond the money. Hence Passion is
the most important trait of the successful entrepreneur.
5) Planning: Planning is the most important of all steps required to
run a business with which every action would be effective to attain
goals. Planning is strategizing the whole game ahead of time. It
basically sums up all the resources at hand and enables to come up
with a structure and a thought process for how to reach the goal.
6) Knowledge: Knowledge is the key to success. An entrepreneur
should possess complete knowledge of his niche or industry. It
enables him to keep track of the developments and the constantly
changing requirements of the market that he is in. May it is a new
trend in the market or advancement in 8 technology or even a new
advertiser’s entry, an entrepreneur should keep himself abreast of it.
He should know what his strengths & weaknesses are so that they can
be worked on and can result in a healthier organization.
7) Social Skills: Social Skills are also needed to be a good
entrepreneur. Overall, these make up the qualities required for an
entrepreneur to function. Social Skills involve the following
Relationship Building, Hiring and Talent Sourcing, Team Strategy
Formulation.
8)Open-mindedness towards learning, people, and even failure: An
entrepreneur must be accepting the true scenario or event happening
that can be a useful opportunity. To recognize such opportunities, an
open-minded attitude is required. An entrepreneur should be
determined. He should face his losses with a positive attitude and his
wins, humbly. A good entrepreneur takes the experience of this
setback and works even hard with the next goal in line. This
experience is inculcated through the process of accepted learning.
Good entrepreneurs know they can learn from every situation and
person around them. Learning with an open mind makes to look at
faults humbly. Open-mindedness also enables you to know and learn
from your competition.
9)Empathy: Perhaps the least discussed value in the world today is
empathy or having high emotional intelligence. Empathy is the
understanding of what goes on in someone’s mind. A good
entrepreneur should know the strengths and weaknesses of every
employee who works under him. He must understand that it is the
people who make the business tick. For with empathy, an entrepreneur
can definitely reach the hearts of employees and the success he
desires. Hence empathy is one of the most important characteristics of
an entrepreneur.
10)And lastly, the customer is everything: A good entrepreneur will
always know that a business is all about the customer. Grabbing a
customer’s attention is the first step for which it is important to sense
and know the needs of the customers. Personalizing a business for
consumers will also boost the sales. The ability to sell in front of a
potential investment when it comes in the form of a customer is also
required. Being ready with the knowledge to please a customer, is a
way to have a successful business.
 Reasons why Do People Become Entrepreneurs?

a. Be Their Own Boss. Many entrepreneurs want to be their own

boss because either they have had a long-term ambition to own
their own business or they have become frustrated working in
traditional jobs. The desire to make one's own decisions, set
schedules, and be in control of their destiny is the leading
motivator.
b. Pursue Their Own Ideas. Some people are naturally alert, and
when they recognize ideas for new products or services, they have
a desire to see those ideas realized.
c. Pursue Financial Rewards. People start their own firms to pursue
financial rewards. The opportunity for higher income, unlimited
earning potential, This motivation, however, is typically secondary
to the first two and often fails to live up to its hype.
d. Flexibility and Work-Life Balance: Entrepreneurs set their own
hours, allowing them to fit work around their lifestyle rather than
vice versa.

e. Pursuing Passion and Creativity: Turning a personal hobby,

passion, or innovative idea into a business, often to escape
mundane, rigid corporate jobs.
f. Problem Solving and Impact: A desire to fix inefficiencies, fill an
unmet market need, or create positive change in the world.
g. Personal Growth and Challenge: The desire for self-
improvement, learning new skills, and tackling the challenges of
building something from scratch.

Characteristics of Successful Entrepreneurs

A. Passion for Business. The number one characteristic shared

by successful entrepreneurs is passion for the business. This
 passion typically stems from the entrepreneur’s belief that the
business will positively influence people’s lives.
B. Product/Customer Focus. An entrepreneur’s keen focus on
products and customers typically stems from the fact that
most entrepreneurs are, at heart, craftspeople.
C. Tenacity Despite Failure. Because entrepreneurs are typically
trying something new, the failure rate associated with their
efforts is naturally high. Developing a new business may
require a certain degree of experimentation before a success
is attained. Setbacks and failures inevitably occur during the
process. The litmus test of entrepreneurs is their ability to
persevere through setbacks and failures.
D. Execution Intelligence. The ability to effectively execute a
business idea means developing a business model, putting
together a new-venture team, raising money, managing
finances, leading employees, and so on.

Common Mths About Entrepreneurs

Myth 1: Entrepreneurs Are Born, Not Made. This myth is based on the
mistaken belief that some people are genetically predisposed to be an
entrepreneur.

Myth 2: Entrepreneurs Are Gamblers. Entrepreneurs are usually

moderate risk takers, as are most people.

Myth 3: Entrepreneurs Are Motivated Primarily by Money. It is naïve

to think that entrepreneurs don’t seek financial rewards. As discussed
 previously, however, money is rarely the primary reason entrepreneurs
start new firms.

Myth 4: Entrepreneurs Should Be Young and Energetic. Although it is

important to be energetic, investors often site the strength of the
entrepreneurs (in terms of business experience, skill, and talent) as
their most important criterion in the decision to fund a new venture.
Myth 5: Entrepreneurs Love the Spotlight. While some entrepreneurs
are flamboyant, the vast majority of them do not seek or
attract public tention. Typically those that are working on
proprietary products or services avoid public notice.

THE TYPE OF Entrepreneurs

1. Business entrepreneurs Business

entrepreneurs we those who conceive an idea
to for a new product or service and then create
a business to convert their ideas into reality.
These entrepreneurs may be found in small
business units or big enterprises. They
concentrate both on production and marketing
activities. Example: A Printing Press, bakery or
a textile unit.
2. Trading entrepreneurs Trading Entrepreneurs
are those who undertake trading activities.
These entrepreneurs do not concentrate on
manufacturing activities. They give more
emphasis on distribution and marketing of
goods. They identify potential markets, create
demand for the product and influence people to
 buy the product. Example: Agents and
Wholesalers.
3. Industrial entrepreneurs Industrial
Entrepreneurs are those who concentrate in
industrial and production activities. They
identify the needs of the customers and
manufacture a product according to their
needs. They are generally a product-Oriented
entrepreneur. Example: A manufacturer of
Automobile spare parts, computer accessories.
4. Corporate entrepreneur Corporate
entrepreneurs are those who exhibit innovative
skills in organizing and managing corporate
undertaking. Example: A Trust registered
under the Trust Act.
5. Agricultural entrepreneur An agricultural
entrepreneur is one who concentrates on
agricultural activities. These entrepreneurs
concentrate on activities like raising
agricultural production, marketing of fertilizers
etc.
6. Retail entrepreneurs Retail entrepreneurs are
those who undertake trading activities. They
have direct contact with customers and hence
they are customer oriented. Example: An
entrepreneur running a departmental store.
7. Service entrepreneur A service entrepreneur
is one who provides services to customers.
They make profit by rendering services.
Example: An entrepreneur running a hotel or
dry cleaning unit.
 8. Social entrepreneur A social entrepreneur is
one who provides importance to the society by
serving them. He concentrates on social issues
and does not aim to make profit. Example: A
person running an orphanage.
9. Fabian entrepreneurs:The dictionary
meaning of the term ‘fabian’ is ‘a person
seeking victory by delay rather than by a
decisive battle’. Fabian entrepreneurs are
those individuals who do not show initiative
in visualising and implementing new ideas
and innovations wait for some development
which would motivate them to initiate unless
there is an imminent threat to their very
[Link] -rapido
10. Drone entrepreneurs:
The dictionary meaning of the term ‘drone’ is ‘a person
who lives on the labor of others’. Drone entrepreneurs are
those individuals who are satisfied with the existing mode
and speed of business activity and show no inclination in
gaining market leadership. In other words, drone
entrepreneurs are die-hard conservatives and even ready to
suffer the loss of business.
Example -kodak

[Link]
entrepreneurs-innovating-imitative-fabian-and-drone-
entrepreneurs/

Entrepreneurial Mindset and Characteristics ( case examples )

[Link]: The process of commercializing an invention is
innovation In simple words, in business activity, novelty may
take any one or a combination of the following:
a) new products;
b ) new methods of production;
c) new markets;
d) new sources of raw material; or
e) new forms of organization Innovation is a critical aspect of
entrepreneurship.

Entrepreneurs always try to create new and different values

and get satisfaction in doing so. They try to convert a material
into a resource or, combine the existing resources in a new
and more productive manner. The act of innovation thus
provides resources with a new capacity to create wealth.

Example OYO is a start-up is a network of technology –

enabled budget hotels. This Gurgaon-based company, was
founded by him in 2012. It is backed by Light speed
Ventures, Sequoia Capital and Green Oaks Capital and has
more than 700 hotels under its brand. A college dropout
Ritesh Agarwal who founded Oravel when he was 18
received its share of funding and accolades and later, he
rebranded it to OYO Rooms. He completed his higher
schooling at St. Johns Senior Secondary School Raigada
Oddisa

[Link]: Motivation comes from the word ‘motive’ (or

goal). It means the urge in an individual to achieve a
particular goal. In other words, it is the need to achieve that
motivates a person. You may find many people with
sufficient financial resources and. family support who are
interested in independent ventures.
Example Vadilal’ group which is household name today in
Gujarat. ‘Vadilal Ice Cream’ is a premier brand in the
consumer market. You may. be surprised to know that
Ramachandra Gandhi and Laxman Gandhi, the two brothers
who founded the Vadilal empire, could not even complete
their school education. They started in a small way by selling
homemade ice cream in the city of Ahmedabad. Now, Vadilal
is the largest ice cream company in the country How did they
do it? They did not stop thinking big. They had the courage to
do what they wanted to. Entrepreneurial persons seek rewards
or returns earned through their own efforts and do not depend
upon ‘luck’. They do not like to be idle.

[Link] Taking: Risk-taking implies taking decisions under

conditions where the reward on a certain action is known, but
the occurrence of the event is uncertain. While doing so, an
entrepreneur becomes responsible for the result of the
decision. This responsibility however cannot be insured
against failure be aware that businessmen spend considerable
amount of time .
Example Imagine that you are a qualified pharmacist and that
you have got a large sum of money from your parents. Which
of the following options would you choose? a) Invest in a
bank deposit with 8 per cent annual interest; b) Invest in a
company with a possible return of 15 percent; c) Start a
medical shop in your locality (because people there have to
travel along distance to get medicines) with a fairly good
chance of marking an immediate return of around 10 percent.
(You are also aware that the business is sustainable and can
bring in more returns say 20,30 or 50% in future if you put in
your time and effort);

[Link] Building: According to Harbison

entrepreneurship implies the skill to build an organization.
Organization building ability is the most critical skill required
for industrial development. This skill means the ability to
‘multiply oneself by effectively delegating responsibility to
others. Managerial-Skills and Leadership: According to
Hoselitz, • managerial skills and leadership are the most
important facets of • Entrepreneurship. Financial skills are
only of secondary importance. He Maintains that a person
who is to become an industrial entrepreneur must have more
that he drives to earn profits and amass wealth.

5 Strategic orientation -In traditional definition of the

entrepreneur as ability to grab the opportunity or more
creative or innovative and more favorably. In strategic
orientation, it describes a promoter is truly driven an
opportunity and the factors the derive company formulation
strategy .

[Link] to opportunity, it becomes clear that the

definition of the entrepreneur as creative or innovative is not
sufficient, they should create the opportunity or grab it. The
promoter is willing to act in very short time frame and to
chase an opportunity quickly.

7 Commitment to resource It is multi staged commitment

with a minimum requirement of resources at each crucial
sage or at any decision point the attempts to create the
 maximum value by minimizing the set of resources and
accept the risk in process

8 Resource control The main dimension is controlling

resources. Entrepreneurs must learn to utilize by efficient
manner. Management structure Entrepreneurs must decide the
management hierarchy the promoter need knowledge
progress which is direct with principle characters as follow.
In this system the based on the relationship of resources with
ownership and employment be organized in a hierarchy.

[Link] philosophy At last, entrepreneurial companies are

different administrative management philosophy regarding
compensation and reward every business follows the
philosophy to focus on the creating or gathering of values.
According to startup situation the founders as well as
investors themselves have invested in cash in company and
want returns as soon as possible
I. The Positive Effects of Entrepreneurship and Entrepreneurial
Firms

Economic Impact of Entrepreneurial Firms. / Role of Entrepreneurship in

Economic Development

1. Economic Growth & Stability: Entrepreneurs act as catalysts for

economic development by utilizing resources efficiently, increasing
GDP, and boosting per capita income. They drive industrial
modernization and structural changes, often replacing stagnant, older
firms.
[Link] Creation: Small businesses and start-ups are primary drivers of
employment, reducing unemployment rates and improving job quality
across various sectors.
Read more at:
[Link]
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=cppst[Link]
news/self-employment-is-creating-most-new-jobs-in-india-
what-this-means-for-job-seekers-in-the-years-to-
come/articleshow/[Link]

[Link] & Productivity: Entrepreneurial firms introduce new,

advanced technologies and products (e.g., in biotechnology or digital
services) that enhance productivity and improve daily life.

[Link] Competition & Consumer Choice: Increased competition from

new firms forces existing companies to become more efficient, leading to
lower prices and better products.

5. Creation of organizations: Entrepreneurship results into creation of

organizations when entrepreneurs assemble and coordinate physical,
human and financial resources and direct them towards achievement
of objectives through managerial skills.

6. Improving standards of living: By creating productive

organizations, entrepreneurship helps in making a wide variety of
goods and services available to the society which results into higher
standards of living for the people. Possession of luxury cars,
computers, mobile phones, rapid growth of shopping malls, etc. are
pointers to the rising living standards of people, and all this is due to
the efforts of entrepreneurs.

7. Means of economic development: Entrepreneurship involves

creation and use of innovative ideas, maximization of output from given
resources, development of managerial skills, etc., and all these factors
are so essential for the economic development of a country.

[Link] Development & Social Impact: Entrepreneurs often

contribute to community stability by supporting local infrastructure,
improving sanitation, and financing charities.

[Link] & Personal Development: Entrepreneurship allows

individuals, including marginalized groups, to achieve financial
independence, foster a growth mindset, and gain personal fulfillment.
 10. Development of managerial capabilities: The biggest
significance of entrepreneurship lies in the fact that it helps in
identifying and developing managerial capabilities of entrepreneurs. An
entrepreneur studies a problem, identifies its alternatives, compares
the alternatives in terms of cost and benefits implications, and finally
chooses the best alternative. This exercise helps in sharpening the
decision-making skills of an entrepreneur. Besides, these managerial
capabilities are used by entrepreneurs in creating new technologies
and products in place of older technologies and products resulting in
higher performance.

Difference between Entrepreneur and Manager

The difference between an entrepreneur and a manager are as follows:

Particulars Entrepreneur Manager

They are individuals

It refers to persons
responsible for
who establish a
administering and
Meaning company or enterprise
controlling a group of
and takes a financial
people in the company
risk to get profits.
or enterprise.

They are visionaries

who convert an idea
Position in the They are the employees
into a business. They
company of the company.
are the owners of the
company.

They focus on They focus on ongoing

Focus
business startups. operations.

Risk They bear all financial They do not bear any

 and other risks. risks.

They focus on starting

They focus on the daily
the business and
Focus smooth functioning of
expanding the
the company.
company.

Their motivation comes

Their key motivation
from the power that
Motivation is the achievements of
comes with the
the company.
position.

Their reward is the Their reward is the

Reward profit they earn from salary they draw from
the company. the company.

Their approach to every

They can be casual in
problem is formal, and
Approach their role and have an
they take a scientific
informal approach.
approach.

They are risk-takers. They are risk-averse.

Nature of They take calculated Their job is to maintain
decisions risks to drive the the status quo of the
company. company.

Decision The decisions tend to The decisions are

making be intuitive. calculative.

Specialisation They do not need to be They are trained to

specialised in any perform tasks and are
particular trade. specialists in their
 domain.

Environmental Responsibility
When businesses want to carry out their operations in an
environmentally friendly way, they focus on cutting their carbon
footprint. Companies take the initiative to reduce pollution, plastic
waste and water contamination. They focus on using sustainable
resources like recycled materials, water, paper and digital
communications. Many companies also take initiatives to clean the
environment, like planting trees, recycling waste and funding
environmental research.
Ethical Responsibility & social responsibility of Entrepreneurs
Businesses are ethically responsible for taking good care of the
employees, customers and community. They should provide a safe
and respectable environment to the employees. Transparency in work
and fair wages are important for employees. Businesses should not
make fake promises to their customers. They should deliver accurate
and quality products and services as promised. Companies should not
negatively affect the surrounding community by using their resources
unethically.
Ethical responsibility
[Link] Responsibility
Some companies have core values of improving the world around
them. They allocate some of their profits to charitable purposes. Some
companies donate to organisations working toward those social causes
to which they want to contribute and strongly support. Others
contribute by donating their own goods, such as a tech company
donating old laptops and computers to schools.
[Link] Local Community
Every entrepreneurial business should make an effort to improve the
condition of the surrounding areas and people. These are their
responsibilities towards the local community:
 Employment opportunity: Entrepreneurs should create job
possibilities in the communities where their businesses are
located and running. Employment possibilities will improve the
lives of the people in the area. The local community will benefit
as a result of this.
.Towards environment: Entrepreneurs should ensure that if
they have a manufacturing unit, then it should be far away from
residential areas. Water treatment plants should be installed to
clean the water that is discharged from the manufacturing. Make
plans to reduce solid waste and smoke as well.
 Improve public utilities: Entrepreneurs can contribute towards
the betterment of the local community by providing public
utilities. They can help in opening a school, hospitals, or
libraries for the local people and their children.
 Improve standards of living: Entrepreneurs should make an
effort to raise people’s living conditions. They can provide
scholarships to employees’ children or jobs to disabled people.
 Infrastructural development: Entrepreneurial activities provide
the way for local infrastructure development. Roads,
transportation, and communication networks emerge because of
the business’s demand for infrastructure.

Responsibility Of Entrepreneurs Towards World Society/Global

Globalisation has turned the world into one society. The impact of
entrepreneurial endeavours on international society is gradually
becoming apparent. These are some of the responsibilities towards
world society.
 Following rules: Entrepreneurs are responsible for following the
international trade rules of the countries they are doing business
with. They should not engage in any illicit commercial
operations.
 Avoid unfair competition: Businesses should try to avoid unfair
competition with the markets of other countries. They should
not do any such thing that can affect the local businessman or
the market.
 Honest business: Entrepreneurs should be honest when dealing
with foreign businesses. They should provide standardised
commodities at fair prices. Any type of cheating should be
avoided. It tarnishes the image of the company. The payment
process should be timely and transparent.
 Development of countries: Entrepreneurs can establish their
businesses in underdeveloped countries. It not only helps them
to get cheap labour but also helps in the economic development
of that country.
 Increase cooperation and peace: Trade between two countries
leads to mutual cooperation and decreases tensions.
Entrepreneurs are accountable for expanding their business with
diverse countries in order for world peace to flourish.