The study of the aforesaid definitions makes it clear that different Scholars or authors and economists have tried to explain the entrepreneurship in the different and broad sense in their own ways.
Definition of Entrepreneurship by Different Scholars
These views may be classified as follows:
- Entrepreneurship as risk-taking capacity.
- Entrepreneurship as an organization building ability.
- Entrepreneurship as group level reactiveness.
- Entrepreneurship as functions of organizations and coordination.
- Entrepreneurship as managerial skills.
- Entrepreneurship as the capacity for high achievements.
- Entrepreneurship as innovative functions and innovative ability, and
- Entrepreneurship as leadership functions.
The aforesaid views are explained as follows:
1. Entrepreneurship A Risk Bearing Capacity
Scholars like Richard Kentilam, Knight, Musselman and Jackson, Gaikwad and Spenek, etc. have regarded risk-bearing capacity as an important function of entrepreneurship. According to them, entrepreneurship is:
- Investment of time, money and efforts for starting and making any venture successful and taking risk in entrepreneurship.
- The person purchasing and selling products at an uncertain price is an entrepreneur.
- The group of specific persons, who were the uncertainties is entrepreneurs.
- The ability to take risks and the power to provide the guarantee against the desire and uncertainties is entrepreneurship.
- This is the institution of desire to take risks to face the uncertainties.
- The capacity to bear risks for any enterprise, ability to organize, carrying out diversifications and the desire for making innovations, is entrepreneurship.
Hence, this view is related to the capacity to bear risks and promotion of the business.
But, the ancient Scholars had not accepted entrepreneurship as an important component of the economic society and they had also not made a clear difference between entrepreneurship and management.
Besides, these views are related to the underdeveloped economy.
2. Entrepreneurship An Organisation Building Ability Views
Regarding organization building in the context of entrepreneurship are of Frederick Harbison, Higgins, Frantz, Richman, and Copen, etc.
They have regarded the following basis for their views:
- Entrepreneurship is the quality of developing the resources for the enterprise, developing human capabilities and the leadership ability to coordinate new ideas.
- Leadership and ability to develop creativity are more important for entrepreneurship, because such ideas may be put to more uses. Hence, an entrepreneur should not be only an innovator, he should also be a good leader and an efficient administrator.
- The entrepreneurs perform various organizational and managerial functions, like searching for production opportunities, arranging raw materials and their new sources.
- Entrepreneurship is the ability of organization and planning of various sources of production, in the form of a production unit.
- Entrepreneurship indicates some creative, as well as external and open systems. It performs the functions of innovations, reducing risk burdens, and providing dynamic leadership.
Thus, it is not essential that an entrepreneur should be an innovator, rather he should be a good leader and an efficient administrator.
He may build organizations with his leadership qualities, administrative skills, and creativity.
3. Entrepreneurship A Group-Level Reactiveness
F.W. Young, Copen, and Kaul, etc. are the major components of this view. In this regard, their views are as follows:
- Entrepreneurship is not individualistic, but reactiveness emerging at the group level.
- It is caused by reactive groups in society.
- Changes in social and cultural values cause thoughts at the collective level and by reactive groups.
- It indicates some creative, external and open systems.
- Entrepreneurship is the objective activity of an individual or group of individuals. It includes an integrated range of decisions.
- Reactiveness expressed by minority consumers, Women, Social reformists, and environmentalists, in view of social transformation, reveals diversification.
Thus, Entrepreneurship is not an individual quality, but if the reactive capacity expressed for social uniformity.
4. Entrepreneurship A Function of Organisation and Coordination
Noted economists J.B. Say and Alfred Marshal have Expressed their views, by regarding organization and coordination of various sources of production as an important function of entrepreneurship.
Besides, these two economists, Kilwad, Frantz, and Lindsay are also those Scholars, who are of the view that:
- Entrepreneurship is a combination of various activities, which includes combining resources of production, management adapting of techniques and commodity, etc.
- Entrepreneurship is an organization and combination of various resources of production, in the form of the production unit.
- It is a function of estimating future requirements of the society and to fulfill successfully these requirements by a new, creative and imaginative combination of the resources.
- The entrepreneur is an economic factor which produces socially useful commodities by organizing and coordinating various sources of production, like land, labour, and capital in proper operation.
- There are many criteria of the difference between an entrepreneur and a capitalist.
5. Entrepreneurship As Managerial Skills
They have following views to express entrepreneurship.
- Financial ability is not the man’s ability as an entrepreneur.
- Managerial skill is an important aspect of entrepreneurship.
- Inspection, control, and direction are the important functions of entrepreneurship.
- Entrepreneurship also includes the ability to direct, along with the capacity of bearing risks in the business.
- Entrepreneurship includes bearing risks in the business, arranging labour and capital, formulating general plans, establishing new Enterprises, investing various resources, selecting high-quality managers for the day to day operation of the business and ability to take various decisions for the efficient and gainfull operation of the business and keeping supervision on various business-related activities.
- According to Marshall, “An entrepreneur plays the role of a manager, after the establishment of the enterprise.”
Thus, entrepreneurship is Managerial skills, which facilitates easy achievements of the determined objectives of the Institution.
6. Entrepreneurship A Capacity of High Achievements
According to Macleod, obtaining high achievements in entrepreneurship.
However, for that the capacity to bear risks and taking decisions for innovations is essential.
He has accepted entrepreneurship as a physiological motivation also, which exists in all individuals.
Besides, H.N. Pathak has said that entrepreneurship includes those broad areas, for which various decisions are to be taken.
These decisions may be broadly divided into three categories, 1. knowing the opportunities, 2. organizing industrial units and 3. operating the industrial unit as a profitable dynamic and progressive Institution.
7. Entrepreneurship As Innovating Functions and Innovative
Ability: according to Schumpeter, “Entrepreneurship works for making any new invention and implementing it, improving the method of production or bringing revolution in that.”
For the first time, Schumpeter defined entrepreneurship as Innovative ability.
He was of the view that production of any new product, use of any new method of production, development of New Market, the search of new sources of raw materials and semi-finished products, the operation of new Organisation in any industrial, all such activities are included in entrepreneurship.
8. Entrepreneurship as Leadership Functions
Entrepreneurship is a leadership function. Such views have been expressed by Scholars, like Harbinson and Schumpeter.
They are of the opinion that for entrepreneurship, leadership and creativity is more important, since new ideas may be put to economic uses.
Hence, it is not essential that an entrepreneur has to be an innovator. He should be rather a good leader and an efficient administrator.
He may build the organization only by leadership, administrative abilities, and creativity.
Hence, the definitions given by Schumpeter present a completely new perspective, as the pace of development depends only upon various new changes, improvements and their application in the business.
Thus, now you know the definition of entrepreneurship by different scholars.