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    Lecture - 1 Chapter - 1: Entrepreneurship Development (BUS-304)

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    Maruf Hossain
    This document provides an introduction to entrepreneurship and entrepreneurs. It defines key terms like entrepreneur and entrepreneurship from various economists, social scientists, psychologists, sociologists, and anthropologists. Common themes in the definitions are noted, such as the entrepreneur playing an important economic role, involving innovation and organization creation, and being a process of creating value. The pros and cons of entrepreneurship are outlined, including the potential for excitement and independence but also less predictable work schedules and lack of benefits. Finally, some common myths about entrepreneurs are debunked, such as the idea that they are born rather than made or that they are gamblers rather than moderate risk takers.

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    Lecture - 1 Chapter - 1: Entrepreneurship Development (BUS-304)

    Uploaded by

    Maruf Hossain
    25 views18 pages
    This document provides an introduction to entrepreneurship and entrepreneurs. It defines key terms like entrepreneur and entrepreneurship from various economists, social scientists, psychologists, sociologists, and anthropologists. Common themes in the definitions are noted, such as the entrepreneur playing an important economic role, involving innovation and organization creation, and being a process of creating value. The pros and cons of entrepreneurship are outlined, including the potential for excitement and independence but also less predictable work schedules and lack of benefits. Finally, some common myths about entrepreneurs are debunked, such as the idea that they are born rather than made or that they are gamblers rather than moderate risk takers.

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    ED lecture 1,2,3,4

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    This document provides an introduction to entrepreneurship and entrepreneurs. It defines key terms like entrepreneur and entrepreneurship from various economists, social scientists, psychologists, sociologists, and anthropologists. Common themes in the definitions are noted, such as the entrepreneur playing an important economic role, involving innovation and organization creation, and being a process of creating value. The pros and cons of entrepreneurship are outlined, including the potential for excitement and independence but also less predictable work schedules and lack of benefits. Finally, some common myths about entrepreneurs are debunked, such as the idea that they are born rather than made or that they are gamblers rather than moderate risk takers.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    25 views18 pages

    Lecture - 1 Chapter - 1: Entrepreneurship Development (BUS-304)

    Uploaded by

    Maruf Hossain
    This document provides an introduction to entrepreneurship and entrepreneurs. It defines key terms like entrepreneur and entrepreneurship from various economists, social scientists, psychologists, sociologists, and anthropologists. Common themes in the definitions are noted, such as the entrepreneur playing an important economic role, involving innovation and organization creation, and being a process of creating value. The pros and cons of entrepreneurship are outlined, including the potential for excitement and independence but also less predictable work schedules and lack of benefits. Finally, some common myths about entrepreneurs are debunked, such as the idea that they are born rather than made or that they are gamblers rather than moderate risk takers.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 18

    Entrepreneurship Development (BUS-304)

    Lecture – 1

    Chapter – 1
    Introduction
    1.1 Origin and Development of the term Entrepreneur:

    • The term “Entrepreneur” is derived from the French word “Entreprendre” which
    literally meant “enterprise” or “to undertake”. It appears that the term
    ‘entrepreneur’ has been used for over 200 years. The origin of term can, however,
    be traced from the writings of ‘Fritz Redlich’, a 20 th century German scholar. Redlich
    (1949) traced that the term was one of the first time appeared in Savary’s
    Dictionary in 1723 where notes can be found on the words like ‘entreprendre’ and
    ‘entrepreneur’.
     
    • However, Redlich mentioned that by 1725 the word first assumed the role of
    technical term in the work of Richard Cantilon. The next economist using the word
    ‘entrepreneur’ in a technical sense was Jean Baptiste Say in 1803.
     
    • Redlich also traced words like ‘undertaker’ or ‘adventurer’ in Malachy
    Postlethwayst’s Dictionary published in English in London in 1751-1755 where the
    word was used to refer to a person who has built a house and may sell or rent.
    1.2 Definition of the term Entrepreneur and Entrepreneurship:

    It is of course, not the intention here to catalogue each and every definition of entrepreneur and
    entrepreneurship, even though, it is tempting to explore the abundant literature on this
    subject, yet it is essential to mention some of them in order to have sufficient understanding
    about the subject.

    Economist’s definition of Entrepreneurship:

    • ‘Cantillon’ (1755) defined the entrepreneur as “one who buys things at a certain price and
    sells at an uncertain price.” Examples: farmers, craftsmen, wholesalers, retailers, tavern
    (saloon) keepers etc. It appears that Cantillon stressed ‘risk taking’ as an important feature of
    entrepreneurship.
     
    • ‘Jean Baptiste Say’ defined the term in his work which first appeared in French in 1815 and in
    English in 1816, has made further modifications to the term. To Say, “the capitalist and the
    entrepreneur is not the same person” and according to him “the entrepreneur is one who
    hires the labor, capital & land of others and combines these means of productions for profits.”
    ‘Schumpeter’ defined the term entrepreneur as “the carrying out of
    new combinations we call ‘enterprise‘, the individuals whose
    function is to carry it out we call ‘entrepreneurs’.

    Schumpeter’s innovative entrepreneurship is not limited to only


    independent ownership of business but also extends up to
    employees of a company like manager, members of board of
    directors, and so forth. Therefore, he described the entrepreneur
    as the ‘agent of change’ and the ‘innovator’.

    Schumpeter was the first economists to emphasize the “non-


    economic” motivations behind the emergence of the entrepreneur.
    It appears that he did not consider profit making to be the
    significant motivation for persons’ becoming entrepreneur.
    Behavioralists & Social Scientists Definition of Entrepreneurship:
     
    • The renowned sociologist Max Webber defined the term Entrepreneur as “the ideal
    type of capitalistic Entrepreneur… avoids ostentation (display/ showingness) and
    unnecessary expenditure, as well as conscious enjoyment of his power, and is
    embarrassed by the outward signs of social recognition which he receives. His manner
    of life… distinguished by a certain ascetic (Frugal/ economical) tendency… He gets
    nothing out of his wealth for himself, except the irrational sense of having done his job
    well.”
     
    • According to Psychologist McClelland “an Entrepreneur is someone who exercises some
    control over the means of production and produces more than he can consume in order
    to sell (or exchange) it for individual ( or household) income.” McClelland defines the
    Entrepreneur as one who organizes a firm and increases its productive capacity.
     
    • Hisrich (1985) defined Entrepreneurship as “the process of creating something different
    with value by devoting the necessary time and effort; assuming the accompanying
    financial, psychological and social risks; and receiving the resulting rewards of monetary
    and personal satisfaction.”
    Sociologist and Anthropologist’s Definition of Entrepreneurship:
     
    • It is to note that sociologists and anthropologists also came forward to fill this gap and
    have tried to explain the phenomena by social and cultural factors. The word profit has
    been interpreted in a different manner by anthropologists, as saying that the profit of an
    entrepreneur should not be limited to only pecuniary gains and an entrepreneur is
    described as an ‘agent of cultural change.’ The psychologists perhaps ultimately touched
    the nerve of the problem and tried to see an entrepreneur as a human being with
    motives and attitudes. They really initiated for doing what Schumpeter and others
    emphasized for.
     
    • From the definition or descriptions given by economists, sociologists and
    anthropologists as well as by psychologists it can be observed that there is much more
    consensus among the writers on some points such as risk taking, organizing and
    managing the factors of production and distribution & making ultimate decision of
    business.

    • Undoubtedly, an entrepreneur is risk taker as he invests money and/or is involved in


    making decisions, the success of which bring rewards, and the failure of which can lead
    to the loss of the rewards as well as even the loss of the principal i.e. invested money.
    Therefore, it is very logical to place risk taking at the centre of entrepreneurship.
    Common themes found in the definition of
    Entrepreneurship:
    • The entrepreneur plays important role in the societies
    economic and other spheres of life.
    • Entrepreneurship involves with innovation.
    • The third common theme seems to be organization creation.
    • Entrepreneurship is the process of creating value.
    • Entrepreneurship can be there in both profit and non-profit
    environment.
    • It is considered as the point of growth.
    • The last but not the least is the recognition that the
    Entrepreneurship is a process.
    Pros and Cons of Entrepreneurship
    (advantages and disadvantages/ challenges):

    To everything in life there are advantages and


    disadvantages; entrepreneurship is no exception. As a
    matter of fact, entrepreneurship involves a lot of risk
    taking. Yet, it can pay off very nicely as well, with
    rewards such as profits and the opportunity to be your
    own boss and make your own decisions.

    Here are some pros and cons to consider:


    Pros / advantages:

    • Excitement: Due to its high capacity for risk, there is a lot of adventure.

    • Rules and regulations: Work in a current job is difficult to do because of


    all the "red tape" and consistent administration approval needed.

    • Originality: Some people feel that they can offer a new service/product
    that no one else has offered before.

    • Competition: Employees feel they can offer their current company's


    product/service at a lesser expense to the public.

    • Independence: Some people wish to be their own boss and make all the
    important decisions him/herself.
    • Salary potential: Generally, people want to be paid for the amount
    of work they do in full; they do not want to be "short-changed."

    • Flexibility: Entrepreneurs can schedule their work hours to spend


    quality time with family or any other reason.

    • Rational salary: They are not being paid what they're worth and
    would rather work on their own and earn the money they should be
    earning for their efforts.

    • Freedom: Entrepreneurs can work whenever they want, wherever


    they want, and however they want.
    Cons / disadvantages/ challenges
     

    • Salary: Starting your own business means that you must be willing to give up the
    security of a regular paycheck.

    • Benefits: There will undoubtedly be fewer benefits, especially when considering that
    your business will be just starting off.

    • Work schedule: The work schedule of an entrepreneur is never predictable; an


    emergency can come up in a matter of a second and late hours will have to be put in.

    • Administration: All the decisions of the business must be made on your own; there is
    no one ranked higher than you on the chain of command in YOUR business.

    • Incompetent staff: Often times, you will find yourself working with an employee who
    "doesn't know the ropes" as well as you do due to lack of experience.

    • Procedures: Many times during your entrepreneurial life, you will find that many
    policies do not make sense, nor will they ever make sense.
    Common Myths about Entrepreneurs

    Myth 1: Entrepreneurs Are Born Not Made.


    – This myth is based on the mistaken belief that some
    people are genetically predisposed to be
    entrepreneurs.
    – The consensus of many studies is that no one is
    “born” to be an entrepreneur; everyone has the
    potential to become one.
    – Whether someone does or doesn’t become an
    entrepreneur, is a function of the environment, life
    experiences, and personal choices.
    Although no one is “born” to be an
    entrepreneur, there are common traits and
    characteristics of successful entrepreneurs:
    •Achievement motivated •Self-confident
    •Optimistic disposition •Has a strong work ethic
    •Alert to opportunities •Self-starter
    •Persuasive •Is a moderate risk taker
    •Creative •Tenacious
    •Promoter •Is a networker
    •Decisive •Tolerant of ambiguity
    •Resource assembler/leverager •Lengthy attention span
    •Energetic •Visionary
    Myth 2: Entrepreneurs Are
    Gamblers.
    Most entrepreneurs are moderate risk takers.
    The idea that entrepreneurs are gamblers
    originates from two sources:
    – Entrepreneurs typically have jobs that are less
    structured, and so they face a more uncertain set
    of possibilities than people in traditional jobs.
    – Many entrepreneurs have a strong need to
    achieve and set challenging goals, a behavior that
    is often equated with risk taking.
    Myth 3: Entrepreneurs Are
    Motivated Only by Money.
    – While it is naive to think that entrepreneurs don’t
    seek financial rewards, money is rarely the reason
    entrepreneurs start new firms.
    – In fact, some entrepreneurs warn that the pursuit
    of money can be distracting.
    Myth 4: Entrepreneurs Should Be Young and
    Energetic.
    – The most active age for business ownership is 35 to
    45 years old.
    – While it is important to be energetic, investors often
    cite the strength of the entrepreneur as their most
    important criteria in making investment decisions.
    • What make an entrepreneur “strong” in the eyes of an
    investor are experience, maturity, a solid reputation, and
    a track record of success.
    • These criteria favor older rather than younger
    entrepreneurs.
    Importance of Entrepreneurship in
    Developing Country

    • Employment Generation
    • Promotes Capital Formation
    • Small Business Plan Dynamism
    • Balanced Economic Development
    • Innovations in Enterprises
    • Better standards of living
    • Self-Reliance
    (cond...)
    • Backward and Forward Industries Linkage
    • Growth of Infrastructure
    • Mobilization of Local Resources
    • Increase of Per Capita Income
    • Growth of Capital Market
    • Facilitates Overall Development
    • Promotes Country’s Export Trade

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