Commerce · Ch 23 — Elements of Entrepreneurship
Entrepreneur vs Manager, and Entrepreneur vs Entrepreneurship
Entrepreneur vs Manager, and Entrepreneur vs Entrepreneurship
Two distinctions frequently confused by students, but frequently tested, are entrepreneur versus manager, and entrepreneur versus entrepreneurship. Both are examined here.
Entrepreneur vs Manager. Although both roles involve running a business, they differ in fundamental ways:
| Basis of difference | Entrepreneur | Manager |
|---|---|---|
| Status | Typically the owner of the enterprise | Typically an employee of the enterprise |
| Risk | Personally bears the risk and uncertainty of the venture | Does not personally bear the enterprise's financial risk |
| Reward | Reward is profit, which is uncertain and can be negative | Reward is a salary, which is fixed and certain |
| Role | Conceives the idea, starts the enterprise, and innovates | Implements plans, policies, and decisions already laid down |
| Orientation | Proactive — creates something new | Reactive/administrative — runs and maintains what already exists |
| Motivation | Driven strongly by achievement and independence | Driven by career growth and security within the organisation |
In short, the entrepreneur is the founder and risk-bearer who brings the enterprise into existence and drives it through innovation, while the manager is the professional who administers the enterprise on a day-to-day basis once it exists, typically without bearing its ownership risk. In a small enterprise the same person may perform both roles; in a larger enterprise the two roles are usually held by different people.
Entrepreneur vs Entrepreneurship. As introduced earlier in this chapter, this distinction is really a distinction between a person and a process:
| Basis of difference | Entrepreneur | Entrepreneurship |
|---|---|---|
| Nature | A person (the doer) | A process or activity (the doing) |
| What it refers to | An individual with certain qualities who takes entrepreneurial action | The ongoing activity of identifying opportunities, mobilising resources, and creating value |
A person, typically an employee, who administers and implements an enterprise's existing plans and policies on a day-to-day basis, in return for a fixed salary, without personally bearing …