The compilation of these Entrepreneurship Development Notes makes students exam preparation simpler and organised.
Relationship between Entrepreneurship and Management and Need for Entrepreneurship
Asking whether there is a need for entrepreneurship in the country is like asking whether you need air to survive. The answer is you just cannot do without it! Entrepreneurs are an essential cog in the machinery that is the economy, without which the economy will not be able to function as efficiently.
Need for Entrepreneurship
Entrepreneurship does not only imply being able to start and manage your own business but it also helps the economy in a lot of ways. For starters, it contributes greatly to the GDP of the country as entrepreneurship primarily involves production and supply of goods and services with a profit motive in mind. This is one of the most important need for entrepreneurship.
An entrepreneur also generates employment in the economy and helps in reducing unemployment as well as in improving the standard of living of the people. This is because more jobs mean more income from the people and more revenue in the economy.
Moreover, it is because of the entrepreneurs in the economy that realize the need for goods and services of the people that we do not have to depend on western produced goods.
This, in turn, helps the country’s money stay within the country. It also helps the country to earn foreign exchange by exporting the goods that are produced in excess in the country to other countries that have a demand for these goods and services.
Another need for entrepreneurship in the country is that it helps to develop and nurture the latent potential in the country. This is especially important in a country like India which has a huge population. This helps the overall growth of the country. It also improves the standard of living of the people living in the economy.
Management and Entrepreneurship
Management refers to the art of getting things done by other people. Entrepreneurship refers to starting a venture with a profit motive in mind. It also involves the ability to take considerable risks for that venture. Now let us talk about the relationship between a manager and an entrepreneur.
While an entrepreneur is the owner of the business and takes all the risk of the business and procures the resources required to start and run the business, a manager takes care of managing and allocating these resources to various uses and making sure that work is being done with efficiency and effectiveness.
Similarities between an Entrepreneur and Manager
From the above explanation, it can be drawn out that while an entrepreneur can be a manager, a manager is not necessarily an entrepreneur. However, there are certain similarities between the two.
Decision Making: A manager, just like an entrepreneur needs to be a quick and effective decision-maker at their respective levels.
People Person: Both the manager and the owner need to be good at social skills. This is necessary to convince people to work with them. Further, it helps ensure that peace and order are maintained within the company.
Confidence: Just as an entrepreneur, to be effective as a manager, a person needs to conduct himself with confidence. This confidence inspires other people as well and makes them want to work for the company.
Speaking of the need for entrepreneurs with respect to the management, if the entrepreneurs didn’t exist, there would be nothing for the managers to do. In other words, entrepreneurs are concerned with starting a new business, while managers are concerned more with managing the ongoing operations.
The need for entrepreneurship especially arises when there is a particular need arising in the society that is not being met by the existing players in the market. In such situations, an opportunity presents itself in the market for entrepreneurs to find a solution to serve such needs and that becomes their business.
Governments also promote new businesses in the economy since it directly affects their revenue. The government levies taxes in respective states where the business is operational, to be paid by these businesses. Another way the government makes revenues out of these businesses is by charging them for licensing their businesses. All businesses operating in the country need a license to operate. It is a legal formality that is mandatory for all functional businesses.
Example:
Question:
What are the essential qualities of an entrepreneur?
Answer:
There are a lot of qualities that make an entrepreneur successful. But some can be categorized as a few of the ‘must have’ traits. These are mandatory traits if you want to be a successful entrepreneur.
For example, the primary quality of an entrepreneur is that he should be a risk-taker. A very common saying in the world of business is- bigger the risk, bigger the rewards. Other qualities are confidence and a quick decision-maker in the face of economic turbulence.