DEFINE ENTREPRENEUR AND EXPLAIN THE CHARACTERISTICS
Ans. Industrial development of any region is the outcome of the purposeful human activity and entrepreneurial thrust. Entrepreneur is presently at the crest of popularity. In India, a large number of people are seeking entrepreneurship as a career option. In creasing number of unemployed youth are getting attracted to entrepreneurship and are planning to setup their own business ventures. Entrepreneurial development is considered as a vital factor for the development of the country. The problems of growth social justice and diffusion of economic power can be solved only by developing entrepreneurs. However, it is evident from the past that there has been a lacuna in the plans and policies of the State, due to which proper infrastructural facilities could not be developed and the new generation of entrepreneurs have not been able to come up After the liberalization of economy and resultant increase in competition, the emphasis is shifted from efficient utilisation of resources to being innovative and opportunity seeker. Hence, it is felt that the industrial activity can be generated by promoting good entrepreneurs and a positive attitude towards entrepreneurship. It is in this direction, the planners in India have been putting efforts and stressing on the development of entrepreneurs and entrepreneurship. The development of entrepreneurs will optimise the use of unexploited natural resources, generate self-employment and self-sufficiency of economy.
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Definitions of Entrepreneur
The word 'entrepreneur' is derived from the French word entre prendre which refers to 'undertake' i.e., individual who undertake the risk of new enterprise. Today we take it for granted the meaning of the word entrepreneur. It suggests spirit, zeal, ideas, diversity etc. But we tend to apply the word loosely to describe it as any one who runs the business-for example the person who presides over a multinational company or owns a corner fruit stand, or who owns a tea stall. In the past the word entrepreneur enjoyed purer and more precise meaning. It described only those who created their own business.
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.
i) Richard Cantillon: According to him entrepreneur is a person who pays certain price for a product to resell it at uncertain price thereby making decision about attaining and using resources while assuming 'the risk of enterprise'. Hence, he is conceived as bearer of non-insurable risk.
ii) J.B. Say: According to him, an entrepreneur "is an 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 reconstitution of the entire capital that he utilizes and the value of wages, the interest and the rent that he pays as well as profit belonging to himself
iii) Adam Smith: Adam Smith, the father of political economy, in his popular book, the 'Wealth of Nations', explained the entrepreneur as an individual who forms an organisation for commercial purpose. He is a proprietary capitalist, a supplier of capital and at the same time a manager who co-ordinates labour and consumer. He also treated the entrepreneur as an employer, master, merchant and more explicitly considered him as a capitalist. Entrepreneur is considered as one who has unusual foresight to recognise potential demand of goods and services. He transforms potential demand into supply. He possesses certain arts and skills of creating new economic enterprises. He is a person with exceptional insight into the society's needs and possess the abilities to fulfil them satisfactorily. Thus, he is perceived as 'Economic Risk Taker' of Cantillon and 'Industrial Manager' of Adam Smith.
iv) Bernard F. De Boli Dar: Bernard F. De Boli Dar defined entrepreneur as a person who performs the task of bringing labour and material at certain price and selling the resultant product at a contracted price. This definition of F De Boli Dar resembles the definition of J.B. Say wherein he laid emphasis on bringing together of the factors of production. The contract price depends on the demand, supply position of the market and bargaining capacities of the parties concerned.
On the basis of the above definitions, it can be concluded that an entrepreneur is one who evaluates the new situations in his environment and directs the making of such adjustments in the economic systems as he deems necessary. He conceives an enterprise for the purpose, displays required initiative, grit and determination to bring the project into action. In the process of bringing the new project into the market, the entrepreneur undertakes number of responsibilities such as perceiving opportunities for profitable investments, explores the prospects of starting a enterprise, obtains the licence, arranges the required initial capital, provides personal guarantees to the financial restitutions, supplies the required technical knowhow etc. Thus, entrepreneur is an economic agent who unites all means of production to maximize his profits by innovations.
Characteristics of an Entrepreneur:
An entrepreneur plays an important role in the development of an economy. He must possess some important qualities which are of great importance to the country's rate of economic growth. So two entrepreneurs are alike. In the words of Peter F
Drucker noted author-lecturer-consultant. "Some are eccentric, others painfully corre conformists, some are fat, some are lean; some are worriers, some relaxed, some drink heavily, others are total abstainers, some are men of great charm and warmth.
Entrepreneurial qualities are in-born. However, some of the qualities can be enhanced training and experience. Robert D. Hisrich identified adequate commitment motivation and to start and build some of the important qualities of an entrepreneur
An entrepreneur should be one who bears, innovates or initiates and organises the business. He is expected to combine all factors of production in a manner as to maximize output at minimum cost of production. Whether he performs the various functions effectively is determined by the nature of quality control, cost reduction, improved labour relations, profit earning etc. All this possible if the entrepreneur is especially a talented person and he possess qualities like capacity to assume risk, technological knowledge, alertness to new opportunities, willingness to accept change and ability to initiate, ability to marshall resources and ability of organisation and administration.
Professor David C. Mc Clelland of Harvard University found that entrepreneurs are likely to do well if they have the following traits;
1) Innovation: Entrepreneurs tend to tackle the unknown. Entrepreneur is more than an inventor because, inventor only originates the invention, whereas, entrepreneur goes much further by exploiting the invention commercially. Entrepreneurs deal with the changes. He does not continue with the old ideas.
2) Risk Taking: Any new business poses risk for entrepreneurs. They may succeed or fail. They cannot foresee the way it will be. Entrepreneur takes risks. Successful entrepreneur tend to launch ventures that fall between these two extremes, a middle ground in which risk is neither too high nor too low. Moreover and contrary to popular belief entrepreneurs generally avoid ventures that are pure gambles. They would rather depend on themselve than on luck.
3) Self Confidence: Entrepreneurs believe in themselves. They firmly believe that they can beat any one in the field. They have the confidence that they can change the existing position.
4) Hard Work: Entrepreneurs are hard workers. Few people in our society work harder than entrepreneurs. Driven by their desire to excel entrepreneurs they put in longer hour of work.
5) Goal Setting: Entrepreneurs get happiness by setting and striving for goals. They may not always achieve those goals. What is more important for an entrepreneur is that of setting a meaningful goal. To entrepreneurs merely choosing a new meaningful goal is self-renewing planning and carrying out the steps needed to reach their goal are stimulating. Reaching one goal set by entrepreneur will lead to the setting up of another goal.
6) Accountability: Entrepreneurs take success or failure to their stride. Credit for success blame for the failure will go to entrepreneurs. It is the profit that best tell entrepreneurs how well they are doing in the market. However, profits really serve only as yard-stick of performance, not as a goal
7) Leadership: Leadership represents an abstract quality of a man. According to Koonz and O'Donnell, leadership is the ability of a manager to induce subordinates (followers) to work with confidence and zeal. It is the process of directing, guiding and influencing the people to do their best for the attainment of a specified goal. The entrepreneur's leadership acts like a motive power to group efforts. It is an aid to authority and helps in better utilisation of manpower. An effective leadership is able to attain good two-way communication and elicit co-operation from the working force. Hence, the entrepreneur must possess good leadership qualities to become a successful entrepreneur.
8) Managerial Skills: According to Hoselitz, managerial skills are the most important facets of an entrepreneurship. Financial skills are only of secondary importance. He opined that a person who is to become an industrial entrepreneur must have the drive to earn profits and amass wealth. Hence, the entrepreneur requires the managerial skills for achieving the goals of the enterprises.
The managerial skills of an entrepreneur refer to ability to formulate a clear and well thought out policy, and ensuring proper balance between the duties, responsibilities, rights and authority of different personnel.