Chap001
1
The Nature and importance of entrepreneurs Learning Objectives
1
To introduce the concept of entrepreneurship and its historical development.
2
To explain the entrepreneurial decision process.
3
To identify the basic types of start-up ventures.
4
To explain the role of entrepreneurship in economic development.
5
To discuss the ethics and racial responsibility of entrepreneurs.
CHAPTER OUTLINE AND TEACHING NOTES
OPENING PROFILE—Oprah Winfrey I. NATURE AND DEVELOPMENT OF ENTREPRENEURSHIP A. The term entrepreneur comes from the French and translates “between-taker” or “go-between.” B. Earliest Period. 1. Marco Polo, who acted as a go-between and attempted to establish trade routes to the far east, was an early example. 2. The capitalist was a passive risk bearer, and the merchant bore all the physical and emotional risks. 3. The profits were divided between the capitalist and the merchant. C. Middle Ages. 1. The term entrepreneur was used to describe both an actor and a person who managed large production projects. 2. This person did not take any risks, but managed the project with the resources provided. 3. A typical entrepreneur was the cleric who managed architectural projects. D. 17th Century. 1. By the 17th century the entrepreneur was a person who entered into a contract with the government to perform a service. 2. Any profits or losses were the entrepreneur’s, tying risk to the entrepreneur for the first time. 3. John Law, a Frenchman, established a royal bank which evolved into an exclusive franchise trading company in the New World, leading eventually to Law’s downfall. 4. Richard Cantillon, a noted economist of the 1700s, developed early theories of the entrepreneur and is regarded as the founder of the term. 5. He viewed the entrepreneur as a risk taker who “buy[s] at certain price and sell[s] at an uncertain price, therefore operating at a risk.” E. 18th Century. 1. In the 18th century
The Nature and importance of entrepreneurs Learning Objectives
1
To introduce the concept of entrepreneurship and its historical development.
2
To explain the entrepreneurial decision process.
3
To identify the basic types of start-up ventures.
4
To explain the role of entrepreneurship in economic development.
5
To discuss the ethics and racial responsibility of entrepreneurs.
CHAPTER OUTLINE AND TEACHING NOTES
OPENING PROFILE—Oprah Winfrey I. NATURE AND DEVELOPMENT OF ENTREPRENEURSHIP A. The term entrepreneur comes from the French and translates “between-taker” or “go-between.” B. Earliest Period. 1. Marco Polo, who acted as a go-between and attempted to establish trade routes to the far east, was an early example. 2. The capitalist was a passive risk bearer, and the merchant bore all the physical and emotional risks. 3. The profits were divided between the capitalist and the merchant. C. Middle Ages. 1. The term entrepreneur was used to describe both an actor and a person who managed large production projects. 2. This person did not take any risks, but managed the project with the resources provided. 3. A typical entrepreneur was the cleric who managed architectural projects. D. 17th Century. 1. By the 17th century the entrepreneur was a person who entered into a contract with the government to perform a service. 2. Any profits or losses were the entrepreneur’s, tying risk to the entrepreneur for the first time. 3. John Law, a Frenchman, established a royal bank which evolved into an exclusive franchise trading company in the New World, leading eventually to Law’s downfall. 4. Richard Cantillon, a noted economist of the 1700s, developed early theories of the entrepreneur and is regarded as the founder of the term. 5. He viewed the entrepreneur as a risk taker who “buy[s] at certain price and sell[s] at an uncertain price, therefore operating at a risk.” E. 18th Century. 1. In the 18th century