Entrepreneurship
Similarities and differences between a manager, a business owner and an entrepreneur
Date: 12/8/2011 Version: 1.0 Student Number: 110369257 Module: BUS1004
Similarities and differences between a manager, a business owner and an entrepreneur By Henry Amm
Introduction
The public perception of entrepreneurs today is almost legendary. They seem to seamlessly start up small businesses and make them grow and develop themselves almost overnight to big successes. (Beaver, 2005) This essay will briefly cover the differences and similarities between managers, business owners and entrepreneurs.
Differences and similarities between managers, owners and entrepreneurs
Back in the 19th century being a businessman, in other words being an owner-manager, was not regarded a profession. These people were coordinators, arbitrators, innovators, interpreters of the market and risk-takers at the same time. The purpose of their activity ranged from interest from capital to profits for bearing the risk of operation. (Zaratiegui & Rabade, 2005) However they required ownership of over 50 per cent of the shared capital to have control over the business. (Burns, 2007) From that early stage the traditional management as mentioned first in Henri Fayol’s General and Industrial Management in 1949 (in French, 1916) evolved which dominates our public perception still today. Here we notice a distinct separation between the owner, or the proprietor, of a business and the people those owners hire to get their business managed and administrated. (Fraja, 1996) Those managers are required to have certain capabilities, i.e. leading people and administrating operations, finance and resources. They are the ultimate authority in the organization and therefore responsible for the social, legal, environmental and ethical aspects of the company.
An entrepreneur is not exactly the latest form of performing business activities as Joseph A. Schumpeter identified entrepreneurial entities already in
Date: 12/8/2011 Version: 1.0 Student Number: 110369257 Module: BUS1004
Similarities and differences between a manager, a business owner and an entrepreneur By Henry Amm
Introduction
The public perception of entrepreneurs today is almost legendary. They seem to seamlessly start up small businesses and make them grow and develop themselves almost overnight to big successes. (Beaver, 2005) This essay will briefly cover the differences and similarities between managers, business owners and entrepreneurs.
Differences and similarities between managers, owners and entrepreneurs
Back in the 19th century being a businessman, in other words being an owner-manager, was not regarded a profession. These people were coordinators, arbitrators, innovators, interpreters of the market and risk-takers at the same time. The purpose of their activity ranged from interest from capital to profits for bearing the risk of operation. (Zaratiegui & Rabade, 2005) However they required ownership of over 50 per cent of the shared capital to have control over the business. (Burns, 2007) From that early stage the traditional management as mentioned first in Henri Fayol’s General and Industrial Management in 1949 (in French, 1916) evolved which dominates our public perception still today. Here we notice a distinct separation between the owner, or the proprietor, of a business and the people those owners hire to get their business managed and administrated. (Fraja, 1996) Those managers are required to have certain capabilities, i.e. leading people and administrating operations, finance and resources. They are the ultimate authority in the organization and therefore responsible for the social, legal, environmental and ethical aspects of the company.
An entrepreneur is not exactly the latest form of performing business activities as Joseph A. Schumpeter identified entrepreneurial entities already in
References: Beaver, G., 2005. Competitive advantage and entrepreneurial power: The dark side of entrepreneurship. Journal of Small Business and Enterprise Development, 12(1), pp. 9-23. Burgelmann, A., 1983. Corporate Entrepreneurship and Strategic Management: Insights from a Process Study. Management Science, 29(12), p. 1349. Burns, P., 2007. Entrepreneurship and Small Business. 2nd ed. Hampshire: Palgrave Macmillan. Fayol, H., 1949. General and Industrial Management. London: Pitman. Fraja, G. d., 1996. Entrepreneur or Manager: Who Runs the Firm?. The Journal of Industrial Economics, 44(1), pp. 89-98. Gartner, W. B., Bird, B. & Starr, J., 1992. Acting as if: Differentiating entrepreneurial from organizational. Entrepreneurship Theory and Practice, 16(3), pp. 13-31. Piperopoulos, P. G., 2011. Business Emergence and Growth. 1st ed. Hampshire: Palgrace Macmillan. Schumpeter, J. A., 1934. The Theory of Economic Development. Cambridge, MA: Harvard University Press. Stewart, W. H., Watson, W. E., Carland, J. C. & Carland, J. W., 1999. A proclivity for entrepreneurship: A comparison of entrepreneurs, small business owners, and corporate managers. Journal of Business Venturing, 14(2), pp. 189-214 . Zaratiegui, J. M. & Rabade, L. A., 2005. Capital owners, entrepreneurs and managers: a Marshallian scheme. Management Decision, 43(5), pp. 772-785. Page 4 of 4