Entrepreneurship: Attributes of Entrepreneurs and Their Role in Economy - Essay Example

Entrepreneurs Entrepreneurship- attributes of entrepreneurs and their role in economy In common parlance, the term, entrepreneurship means to undertake and was derived from French expression, ‘enteprendere’. Broadly, entrepreneurs are individuals who initiate a new business venture or expand and/or modify existing business, organise and manage resources, arrange fund, add creativity in the operations and activities and undertake risk for the purpose of earning profit. The entrepreneurial function explains that to innovate is to recognise and convert opportunities into demand. The entrepreneurs recognise, assess and exploit opportunities in the shape of a new product, new service, new market and new production method. The basic attributes of an entrepreneur comprise risk taking, opportunity seeking, innovation, high degree of motivation, unconventional, positivism, goal-oriented, leadership skills, team management, problem solving skills and most importantly, ability to take initiatives. The innovative nature and ability to take measured risk differentiate entrepreneurs from other business owners (Cuervo, Ribeiro and Roig, 2007). Entrepreneurs are considered extremely important for social and economic development. The main advantages of entrepreneurial development are effective utilisation of resources, employment generation, creation of human and social capital, development of backward and rural areas, minimisation of power and wealth inequality, reduction in regional imbalance and economic growth. Cantillon’s theory suggests that involvement of risk in entrepreneurship helps in maintaining equilibrium in demand and supply in an economy. Entrepreneurial development for societal progress is supported by a number of theories such as, David McClelland’s theory of needs and Maslow’s hierarchy of needs (Bula, 2012). In addition, Schumpeter and Drucker argued that entrepreneurial innovation is necessary for exploiting unseen opportunities and encouraging changes in the economy (Śledzik, 2013). Entrepreneurs and intrapreneurs There are a number of entrepreneurs presently operating in surrounding business environment. Under broad categories, they can be classified as: social entrepreneurs, women entrepreneurs and intrapreneurs. Social entrepreneurs Social entrepreneurs are by nature innovators, but they are different from business entrepreneurs in terms of purpose. They play distinct role in developing and initiating changes in the society. Social entrepreneur is an individual who recognises problems prevailing in the society and employ principles of entrepreneurship for creating and supporting scope of social ventures. Social entrepreneurs are considered different from non-profit organisations because their goals are long-term and focussed on creating systematic changes in the society. These entrepreneurs play an important role in generating social capital, which is necessary for sustainable human and economic development (Peredo and McLean, 2006). Women entrepreneurs Women entrepreneurship has recently been given high importance from development point of view. Women are being encouraged at national and international levels for undertaking initiatives and are provided with continuous support from different organisations. Women entrepreneurs are operating presently in various sectors such as, telecom, information technology, financial services, marketing management and human resource management. Research by Forbes suggests that about 92% women entrepreneurs are experiencing growth and profit in their respective fields. In addition, it has also been observed that venture capitalists are increasingly taking interest in businesses led by women (Forbes, 2014). Intrapreneurs Intrapreneurship is a concept, which is used very rarely since its coinage. However, it is currently encouraged by organisations, keeping in view radical changes in the business environment. Intrapreneurs are those individuals who act similar to entrepreneurs, but within the framework of an organisation. Intrapreneurship is referred to encouraging creative initiatives by employees in an organisation for undertaking new activities or for determining new ways of doing a particular activity without seeking permission for every step. The role of intrapreneurs is to take risk and facilitate innovation for a given purpose or task without deviating from organisational goals. Intrapreneurs are also considered as corporate social entrepreneurs as they contribute in creation of social capital, along with economic capital, within a corporate framework (Honig, 2001). Reasons for companies to encourage intrapreneurial development Globalised business environment has increased work pressure as well as competition for small and large corporations. The management of these corporations realized that traditional methods of doing business are no more adequate for survival. One of the ways to develop and foster sustainable environment in current situation is by incorporating intrapreneurship. Intrapreneurship unleashes latent talent and creativity of employees, which can be nurtured and channelized for overall development of the organisation. Intrapreneurship is nurtured because it helps an organisation to understand consumer perspective and establish stronger relationship with the customers. Innovation teams of the organisations continuously seek various hidden opportunities and challenges that must be exploited for business development. Furthermore, they take initiatives for better consumer engagement and co-creation of products. Intrapreneurship opens avenues of communication among employees and minimises conflicts as employees share their ideas and utilize their team building and leadership skills (Marcus and Zimmerer, 2003). Factors that affect entrepreneurship positively and negatively There are a number of factors that influence the development of entrepreneurship: Family background and Culture: Many individuals develop their entrepreneurial traits from their family businesses. They learn basic tricks of doing business and later apply them in their own future venture. Family support and positive cultural influence are also important in this regard. Fund: Fund is an important constraint for initiating any venture. The fund can be availed from banks and other financial institutions or can be invested by the entrepreneurs. Financial institutions should have supportive regulations that nurture entrepreneurial initiatives. Education: Knowledge about business and societal issues often motivates individuals to undertake activities that can induce change. Higher education such as, MBA degree, also facilitates development of skills such as, leadership and team building abilities. Government regulations: It is impossible for entrepreneurs to develop an innovative venture under strict regulations. Hence, government regulations should be supportive towards entrepreneurial development. Alongside the positive factors, there are certain negative factors that deter entrepreneurial development: Family: To every individual, family is an important component of motivation. When family disapproves of entrepreneurial initiative, it may the individual to give up on the venture. Risk-aversion: Several people prefer traditional jobs over innovative ventures because they choose to avoid risk. Restricted business environment: It is difficult for an entrepreneur to operate in restricted environment with strict business regulations and limitations on funding (Lee, et al., 2011). Reference list Bula, H. O., 2012. Evolution and Theories of Entrepreneurship: A Critical Review on the Kenyan Perspective. International journal of business and commerce, 1(11), pp. 81-96. Cuervo, A., Ribeiro, D. and Roig, S., 2007. Entrepreneurship: Concepts, Theory and Perspective. Introduction in Entrepreneurship, pp. 1-20. Forbes, 2014. 11 Reasons 2014 Will Be A Breakout Year for Women Entrepreneurs. [online] Available at: [Accessed on 26 June 2014]. Honig, B., 2001. Learning strategies and resources for entrepreneurs and intrapreneurs. Entrepreneurship Theory and Practice, 26(1), pp. 21-35. Lee, L., Wong, P. K., Foo, M. D. and Leung, A., 2011. Entrepreneurial intentions: The influence of organizational and individual factors. Journal of Business Venturing, 26(1), pp. 124-136. Marcus, M. H. and Zimmerer, T. W., 2003. A longitudinal study of the impact of intrapreneurial programs in fortune 500 firms. Journal of Management Research, 3(1), pp. 11-22. Peredo, A. M. and McLean, M., 2006. Social entrepreneurship: A critical review of the concept. Journal of world business, 41(1), pp. 56-65. Śledzik, K., 2013. Schumpeter’s View on Innovation and Entrepreneurship. [online] Available at: [Accessed on 26 June 2014]. Read More