entrepreneur and intrapreneur

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 ENTREPRENEUR1. Idea generation and scanning of the best suitable

idea2. Determination of the business objectives3. Product analysis and market research4. Determination of form of ownership / organization5. Completion of promotional formalities6. Raising necessary funds7. Procuring machine and material8. Recruitment of men9. Undertaking the business operations

TYPES OF ENTREPRENEURS

1. Innovating Entrepreneurs2. Imitative Entrepreneurs3. Fabian Entrepreneurs4. 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!