ENTREPRENEUR AND INTRAPRENEUR - Dr. V. THANIKACHALAM
ENTREPRENEUR • Risk-bearer • Organiser • Innovator
RICHARD CANTILLON, AN IRISHMAN LIVED IN FRANCE COINED THE TERM • Entrepreneur • His unique risk-bearing
function in economics in the early 18th Century.
RICHARD’S DEFINITION OF ENTREPRENUER • 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 uncertain prices in future.
KNIGHT’S DESCRIPTION • Knight described entrepreneur
to be a specialised group of persons who bear uncertainty.
UNCERTAINTY • Uncertainty as a risk which can not be
insured against and is incalculable. • Entrepreneur according to Knight “The Entrepreneur is the economic functionary who undertakes such responsibility of uncertainty which by its very nature cannot be insured nor capitalised nor salaried too”.
ENTREPRENEUR AS AN ORGANISER • Jean-Baptiste Say (an
aristocratic industrialist)
JEAN’S DEFINITION ASSOCIATES ENTREPRENEUR WITH THE FUNCTIONS OF COORDINATION, ORGANISATION, AND SUPERVISION.
AN ENTREPRENEUR IS ONE WHO COMBINES THE LAND OF ONE, THE LABOUR OF ANOTHER AND THE CAPITAL OF YET ANOTHER, AND THUS, PRODUCES A PRODUCT.
IMPLICIT FACTORS ARE DEEMED TO BE ESSENTIAL TO AN ENTREPRENEUR • Moral qualities for work judgement,
perseverance and acknowledge about the business world. • Command over sufficient capital, and • Uncertainty of profits.
ENTREPRENEUR AS AN INNOVATOR • Introduction of a new product in the market. • Instituting of a new production technology which
is not yet tested by experience in the branch of manufacture concerned. • Opening of a new market into which the specific product has not previously entered. • Discovery of a new source of supply of raw material. • Carrying out of the new form of organization of any industry by creating of a monopoly position or the breaking up of it.
DISTINCTION BETWEEN AN ENTREPRENEUR AND A MANAGER.
MOTIVE • Entrepreneur: To start a venture by
setting up an enterprise. He understands the venture for his personal gratification. • Manager: To render his services in an enterprise already set up by someone else.
STATUS • Entrepreneur: the owner of the
enterprise. • Manager: the servant in the enterprise owned by the entrepreneur.
RISK TAKING • Entrepreneur: Assumes all risks
and uncertainty involved in running the enterprise. • Manager: Does not bear any risk involved in the enterprise.
REWARDS • Entrepreneur: Gets for bearing risks
involved in the enterprise is profit which is highly uncertain. • Manager: Gets salary as reward for the services rendered by him in the enterprise.
INNOVATION • Entrepreneur: Himself thinks over
what and how to produce goods to meet the changing demands of the customers (Innovator / Change agent).
QUALIFICATIONS • Entrepreneur: Needs to possess qualities
and qualifications like achievement motive, originality in thinking, foresight, risk bearing ability and so on. • Manager: Needs to possess distinct qualifications in terms of sound knowledge in management theory and practice.
FUNCTIONS OF AN ENTREPRENEUR 1. 2. 3. 4. 5. 6. 7. 8. 9.
Idea generation and scanning of the best suitable idea Determination of the business objectives Product analysis and market research Determination of form of ownership / organization Completion of promotional formalities Raising necessary funds Procuring machine and material Recruitment of men Undertaking the business operations
TYPES OF ENTREPRENEURS 1. 2. 3. 4.
Innovating Entrepreneurs Imitative Entrepreneurs Fabian Entrepreneurs Drone Entrepreneurs
INNOVATING ENTREPRENEURS • Introduces new goods, inaugurates
new method of production, discovers new market and reorganises the enterprise.
IMITATIVE ENTREPRENEURS • Characterised by readiness to
adopt successful innovations inaugurated by innovating entrepreneurs.
FABIAN ENTREPRENEURS • Characterised by very great
caution and skepticism in experimenting any change in their enterprises.
DRONE ENTREPRENEURS • Characterised by a refusal to adopt
opportunities to make changes in production formulae even at the cost if severely reduced returns relative to other like producers.
INTRAPRENEUR • Emerges from within the
confines of an existing enterprise.
DEPENDENCY • Entrepreneur: Independent in
his operations. • Intrapreneur: Dependent on the expertice.
RAISING FUNDS • Entrepreneur: Raises funds
required for the enterprise. • Intrapreneur: Funds are not raised by intrapreneur immediately. Expertise is the prime resource.
RISK • Entrepreneur: Bears the risk. • Intrapreneur: Mostly risk free
since he has all the expertise.
OPERATION • Entrepreneur: Operates through
Intrapreneurs. • Intrapreneur: Due to the expertise he chooses new products and process.
INTRAPRENEURS • May become Entrepreneurs.
THANKING YOU!