Entrepreneurship Vs Management - Introduction, Entrepreneurship & Small Businesses | Entrepreneurship & Small Businesses - B Com PDF Download

Entrepreneurship vs. Management

Quite often an entrepreneur and a manager are considered similar because of some overlapping in their roles. In a small firm, the owner himself acts as the manager. But there are some important differences between a entrepreneur and a manager which are discussed below:

1. Venture Creation: An entrepreneur often sets up a new venture while a manager only runs an existing venture.
2. Innovation: An entrepreneur introduces new ideas to increase profits and is, therefore, an innovator. On the other hand, a manager runs the business on established lines and often maintains the status quo. An entrepreneur is a ‘change agent’ whereas a manager is the ‘product of change’. Entrepreneurship involves combining to initiate changes in production whereas management involves combining to produce.
3. Status: An entrepreneur is his own boss and enjoys an independent status. In contrast, a manager is an employee and dependent on the owner.
4. Reward: For bearing risk, an entrepreneur earns profits which may fluctuate widely from one time period to another. But the reward of a manager is the salary which is relatively fixed and regular.
5. Continuity: Management refers to the ongoing coordination of the production process whereas entrepreneurship is a discontinuous phenomenon appearing to initiate change in the production process and then disappears until it reappears to initiate another change.

Overlapping Roles of Entrepreneur and Manager 

Joseph Schumpeter made a distinction between entrepreneur and manager. According to him, a manager is one who deals with day-to-day affairs of a going concern. But an entrepreneur attempts to change the factor combinations and thus increases productivity and profits. An entrepreneur launches a new enterprise whereas a manager operates an existing enterprise. The roles of entrepreneur and manager may, however, overlap in many situations. Entrepreneurs who start enterprises must use managerial skills to implement their innovative ideas successfully. Similarly, managers must use entrepreneurial skills in order to manager change and innovation to effectively deal with uncertain external environment of business.

Table: Entrepreneur vs. Manager