Entrepreneur

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For the practice of starting a new organization, see Entrepreneurship. For the magazine, see Entrepreneur (magazine).

An entrepreneur (/ˌɒntrəprəˈnɜː/ ⓘ) is an enterprising individual who builds capital through risk and/or initiative.[1][note 1] The term was originally a loanword from French and was first defined by the Irish-French economist Richard Cantillon.This term first appeared in the French Dictionary "Dictionnaire Universal de Commerce" of Jacques des Bruslons published in 1723. Entrepreneur in English is a term applied to a person who is willing to help launch a new venture or enterprise and accept full responsibility for the outcome.

Over time, scholars have defined the term in different ways. Here are some of their definitions.

1725: Richard Cantillon: An entrepreneur is a person who pays a certain price for a product to resell it at an uncertain price, thereby making decisions about obtaining and using the resources while consequently admitting the risk of enterprise.

1803: J.B. Say: An entrepreneur is an 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 he pays rent of land, wages to labour, interest on capital and what remains is his profit. He shifts economic resources out of an area of lower and into an area of higher productivity and greater yield. 6

1934: Schumpeter: According to him entrepreneurs are innovators who use a process of shattering the status quo of the existing products and services, to set up new products, new services.

1961: David McClleland: An entrepreneur is a person with a high need for achievement [N-Ach]. He is energetic and a moderate risk taker.

1964: Peter Drucker: An entrepreneur searches for change, responds to it and exploits opportunities. Innovation is a specific tool of an entrepreneur hence an effective entrepreneur converts a source into a resource.

1971: Kilby: Emphasizes the role of an imitator entrepreneur who does not innovate but imitates technologies innovated by others. Are very important in developing economies.

1975: Albert Shapero: Entrepreneurs take initiative, accept risk of failure and have an internal locus of control.

1983: G. Pinchot: Intrapreneur is an entrepreneur within an already established organization.[note 2]

Leadership attributes

The entrepreneur leads the firm or organization and also demonstrates leadership qualities by selecting managerial staff. Management skill and strong team building abilities are essential leadership attributes for successful entrepreneurs. Scholar Robert. B. Reich considers leadership, management ability, and team-building as essential qualities of an entrepreneur. This concept has its origins in the work of Richard Cantillon in his Essai sur la Nature du Commerce en (1755) and Jean-Baptiste Say [note 3] in his Treatise on Political Economy.

Entrepreneurs emerge from the population on demand, and become leaders because they perceive opportunities available and are well-positioned to take advantage of them. An entrepreneur may perceive that they are among the few to recognize or be able to solve a problem. Joseph Schumpeter saw the entrepreneur as innovators and popularized the uses of the phrase creative destruction to describe his view of the role of entrepreneurs in changing business norms. Creative destruction encompasses changes entrepreneurial activity makes every time a new process, product or company enters the markets.An Entrepreneur should have a dynamic attitude and a wolf like awareness towards the changing external environments.

Influences, personality traits, and characteristics

The most significant influence on an individual's decision to become an entrepreneur is workplace peers and the social composition of the workplace.[citation needed] The ability of entrepreneurs to innovate relates to innate traits such as extroversion and a proclivity for risk-taking. According to Schumpeter (1934), the capabilities of innovating, introducing new technologies, increasing efficiency and productivity, or generating new products or services, are characteristics of entrepreneurs. Entrepreneurs are catalysts for economic change. Research has found entrepreneurs to be highly creative with a tendency to imagine new solutions by finding opportunities for profit or reward.[2]

There is a complexity and lack of cohesion between research studies that explore the characteristics and personality traits of, and influences on, the entrepreneur. Most studies, however, agree that there are certain entrepreneurial traits and environmental influences that tend to be consistent. Although certain entrepreneurial traits are required, entrepreneurial behaviours are dynamic and influenced by environmental factors. Shane and Venkataraman (2000) argue the entrepreneur is solely concerned with opportunity recognition and exploitation; although, the opportunity that is recognised depends on the type of entrepreneur which Ucbasaran et al. (2001) argue there are many different types dependent on their business and personal circumstances. However, it should also be noted that there are approaches that appear highly critical against valorized conceptions of entrepreneurs. For example, there are views that attribute pertinent conceptions to scholarly prejudices, such as unrealistically voluntaristic preconceptions on how a "normal" economic agent ought to behave (Ramoglou, 2011; Gartner, 2001).

Psychological studies show that the psychological propensities for male and female entrepreneurs are more similar than different. Perceived gender differences may be due more to gender stereotyping. There is a growing body of work that shows that entrepreneurial behavior is dependent on social and economic factors. For example, countries which have healthy and diversified labor markets or stronger safety nets show a more favorable ratio of opportunity-driven rather than necessity-driven women entrepreneurs. Empirical studies suggest that men entrepreneurs possess strong negotiating skills and consensus-forming abilities.

Types of entrepreneurs

The literature has distinguished among a number of different types of entrepreneurs, for instance:

Social entrepreneur

A social entrepreneur is motivated by a desire to help, improve and transform social, environmental, educational and economic conditions. Key traits and characteristics of highly effective social entrepreneurs include ambition and a lack of acceptance of the status quo or accepting the world "as it is". The social entrepreneur is driven by an emotional desire to address some of the big social and economic conditions in the world, for example, poverty and educational deprivation, rather than by the desire for profit. Social entrepreneurs seek to develop innovative solutions to global problems that can be copied by others to enact change. [3]

Social entrepreneurs act within a market aiming to create social value through the improvement of goods and services offered to the community. Their main aim is to help offer a better service improving the community as a whole and are predominately run as non profit schemes. Zahra et al. (2009: 519) said that “social entrepreneurs make significant and diverse contributions to their communities and societies, adopting business models to offer creative solutions to complex and persistent social problems”.

Serial entrepreneur

A serial entrepreneur is one who continuously comes up with new ideas and starts new businesses.[4] In the media, the serial entrepreneur is represented as possessing a higher propensity for risk, innovation and achievement.[5]

Lifestyle entrepreneur

A lifestyle entrepreneur places passion before profit when launching a business in order to combine personal interests and talent with the ability to earn a living. Many entrepreneurs may be primarily motivated by the intention to make their business profitable in order to sell to shareholders.[example needed] In contrast, a lifestyle entrepreneur intentionally chooses a business model intended to develop and grow their business in order to make a long-term, sustainable and viable living working in a field where they have a particular interest, passion, talent, knowledge or high degree of expertise.[6] A lifestyle entrepreneur may decide to become self-employed in order to achieve greater personal freedom, more family time and more time working on projects or business goals that inspire them. A lifestyle entrepreneur may combine a hobby with a profession or they may specifically decide not to expand their business in order to remain in control of their venture. Common goals held by the lifestyle entrepreneur include earning a living doing something that they love, earning a living in a way that facilitates self-employment, achieving a good work/life balance and owning a business without shareholders.[further explanation needed] Many lifestyle entrepreneurs are very dedicated to their business and may work within the creative industries or tourism industry,[7] where a passion before profit approach to entrepreneurship often prevails. While many entrepreneurs may launch their business with a clear exit strategy, a lifestyle entrepreneur may deliberately and consciously choose to keep their venture fully within their own control. Lifestyle entrepreneurship is becoming increasing popular as technology provides small business owners with the digital platforms needed to reach a large global market.[8] Younger lifestyle entrepreneurs, typically those between 25 and 40 years old, are sometimes referred to as Treps.[9]

Cooperative entrepreneur

A cooperative entrepreneur doesn't just work alone, but rather collaborates with other cooperative entrepreneurs to develop projects, particularly cooperative projects. Each cooperative entrepreneur might bring different skill sets to the table, but collectively they share in the risk and success of the venture.

Theory-based Typologies

Recent advances in entrepreneurship research indicate that the differences in entrepreneurs and heterogeneity in their behaviors and actions can be traced back to their the founder's identity. For instance, Fauchart and Gruber (2011, Academy of Management Journal) have recently shown that -based on social identity theory - three main types of entrepreneurs can be distinguished: Darwinians, Communitarians and Missionaries. These types of founders not only diverge in fundamental ways in terms of their self-views and their social motivations in entrepreneurship, but also engage fairly differently in new firm creation.

See also

Notes

  1. ^ Sullivan, Arthur (2003). Economics: Principles in action. Upper Saddle River, New Jersey 07458: Pearson Prentice Hall. p. 6. ISBN 0-13-063085-3. {{cite book}}: Unknown parameter |coauthors= ignored (|author= suggested) (help)CS1 maint: location (link)
  2. ^ Guide to Management Ideas and Gurus, Tim Hindle, The Economist, page 77,
  3. ^ See William J. Baumol, Robert E. Litan & Carl J. Schramm. Good capitalism, bad capitalism, and the economics of growth and prosperity 3 (2007), citing generally Peter F. Drucker. Innovation and entrepreneurship (1985) (attributing coining and defining of “entrepreneur” to Jean-Baptiste Say, a treatise on political economy (1834)); but see Robert H. Brockhaus, Sr., The Psychology of the Entrepreneur, in Encyclopedia of Entrepreneurship 40 (Calvin A. Kent, et al. eds. 1982), citing J. S. Mill, Principles of political economy with some of their applications to social philosophy (1848). Note that, despite Baumol et al.'s citation, the Drucker book was published in 1986.

References

  1. ^ http://dictionary.reference.com/browse/entrepreneur
  2. ^ Olakitan, O. (5 November 2011). [cscanada.net/index.php/ihe entrepreneur leads the firm or organization and also demonstrates leadership qualities by selecting managerial staff. Management skill and strong team building abilities are essential leadership attributes for successful entrepreneurs. Scholar Robert. B. Reich considers leadership, management ability, and team-building as essential qualities of an entrepreneur. This concept has its origins in the work of Richard Cantillon in his Essai sur la Nature du Commerce en (1755) and Jean-Baptiste Say [note 3] in his Treatise on Political Economy. Entrepreneurs emerge from the population on demand, and become leaders because they perceive opportunities available and are well-positioned to take advantage of them. An entrepreneur may perceive that they are among the few to recognize or be able to solve a problem. Joseph Schumpeter saw the entrepreneur as innovators and popularized the uses of the phrase creative destruction to describe his view of the role of entrepreneurs in changing business norms. Creative destruction encompasses changes entrepreneurial activity makes every time a new process, product or company enters the markets. [edit]Influencesbm/article/download/j.ibm...075/2066]
  3. ^ "Harvard Business Publishing Presents: An interview with John Elkington - Key Traits of Social Entrepreneurs.". {{cite episode}}: Cite has empty unknown parameters: |began=, |episodelink=, |city=, |serieslink=, |ended=, |transcripturl=, and |seriesno= (help); Missing or empty |series= (help)
  4. ^ Business dictionary definition
  5. ^ Serial Entrepreneur Quotes
  6. ^ Wadhwa, Vivek. "Is entrepreneurship just about the exit?". Retrieved 12 June 2010.
  7. ^ Peters, M, Frehse, J, Buhalis, D, The importance of lifestyle entrepreneurship: A conceptual study of the tourism industry, PASOS Vol. 7, No. 2 p393-405, 2009
  8. ^ Rural Entrepreneurs, Case Studies. "Ecommerce as a business strategy: lessons learned from rural and small town businesses" (PDF). Retrieved 12 June 2010.
  9. ^ Goodman, Vivian. "TREPS: The Young Titans of the New Economy". Retrieved 17 February 2011.

Further Reading

  • Deakins, D.; Freel, M. (2009). Entrepreneurship and Small Firms, 5th Edition. McGraw Hill.
  • Fauchart, E.; Gruber, M. (2011). "Darwinians, Communitarians and Missionaries: The Role of Founder Identity in Entrepreneurship", Academy of Management Journal, Vol. 54, No. 5/2011

External links

Wikibooks has a book on the topic of: Entrepreneurship
Look up entrepreneur in Wiktionary, the free dictionary.

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