Nature of Entrepreneurship
The nature of entrepreneurship can be explained as follows-
(1) Risk Bearing Capacity – The basic element of entrepreneurship is the ability to take risks prevailing in business and industry. Entrepreneurship involves a willingness to take risks and face the future uncertainties of the business and industry. There are many risks involved in any new business which can be taken on the basis of courage.
(2) Planning of Innovation – The entrepreneurial businessman always gives place to new technology, new equipment and new management system in his business. It increases consumer satisfaction and firm’s profits with new goods, new markets and new services. In the words of Peter Drucker, “Renovation is the distinguishing tool of entrepreneurship.”
(3) Creative Activity – Entrepreneurship is creative or creative in nature. Entrepreneurship inspires a person to explore new opportunities, think creatively and implement new ideas. In the words of Schumpeter, “Entrepreneurship is essentially a creative activity.”
(4) Business Oriented Attitude – Entrepreneurship tells about the entrepreneurial power and business attitude of the person. It inspires a person to become an entrepreneur and set up an enterprise. Entrepreneurship inspires a person to plan a business and start an industry, in which new industries and wealth are established in the society.
(5) Knowledge Based Acts – Entrepreneurship is neither a science nor an art, but it is a behavior based on knowledge. Entrepreneur builds his project on the basis of his knowledge and experience.
(6) Necessary in All Fields—Humans need courage in all walks of life. A person can achieve success in any field like education, research, medicine, politics, sports, army etc. through bold behavior and entrepreneurship.
(7) Not an individual trait, but a behavior Therefore, by developing the ability to make decisions, every person can become an entrepreneur and can behave boldly. In the words of Peter Drucker, “Entrepreneurship is not a personality trait but a behavior.”
(8) Creation of Resources – Resources are only in the form of raw materials and materials. Entrepreneurship itself transfers these into resources. A resource is one to which an economic value is attached. Thus entrepreneurship is the process of developing utility, economic value and ability to generate wealth.
(9) Environment Motivated Activity – Entrepreneurship is an external and open system linked to the environment, entrepreneurs always make things keeping in mind the factors of social, economic, political and physical environment and there is a need to change them. take risks.
(10) Entrepreneurship is not a natural but an acquired task (It is an Earned task not a Natural Activity)—It is often believed that courage is naturally present in every organization, but this is a false idea. Every individual and organization has to strive for entrepreneurship by being alert, have to generate courageous spirit and have to bring adventure in every behaviour. Therefore, it is clear that it is an acquired work which is obtained through knowledge, experience and practice.
(11) Result of Changes – Entrepreneurship is not just any economic event or action but it is also the result of economic, social, political, cultural, scientific and technological changes taking place in the society.
(12) Professional Activity – Like medicine, law and engineering in developed countries, courage is also developing as a profession. Along with managerial abilities, courageous abilities are also being developed through education and training.
(13) Necessary in all Business and Economics – Entrepreneurship is necessary in all types of businesses, small or big. In fact, it is essential for every business to survive and grow. The size of the business does not deter the entrepreneurial spirit. Hence entrepreneurship exists in some form or the other in every society and economy.
(14) A Life Style – Entrepreneurship is not a work, business or profession, it is also a way or way of going through life systematically. It is necessary for every person to be creative and imaginative to achieve the goal in life, he should have the ability to plan, take concrete decisions and implement them.
(15) Process for Searching Opportunities – Entrepreneurship is the process under which opportunities are discovered, so that they can be taken advantage of in time.
(16) Result Oriented Behavior – An entrepreneur always gives importance to results, not luck. Entrepreneurial individuals believe in achieving results through their efforts and hard work. They focus on achieving achievements through firm decisions, concrete plans and goal-oriented behavior.
Importance/Significance/Need of Entrepreneurship
Entrepreneurship is the basis of planned, balanced and rapid economic development of every nation. By developing entrepreneurship, a country can get rid of various economic and social problems, such as poverty, unemployment, hunger, inequality of wealth, backwardness, low productivity, standard of living, etc. May go. Entrepreneurship is an important basis of prosperity in developing countries, while in developed countries it is an important method of creative thinking, social innovation and development of ‘adventure society’. In short, the importance of entrepreneurship can be explained by the following points-
(1) Establishment of Viable Units – Business units can be made profitable and efficient by the development of entrepreneurship. Qualified, skilled and trained entrepreneurs increase the chances of success of a business unit. Such entrepreneurs not only reduce the government burden by reviving sick units but also make efficient use of the nation’s endowed resources.
(2) Increase in Employment Opportunities – With the development of entrepreneurship, new industries run in the country and existing units develop and expand, which increases employment opportunities. In the words of Rixon, “In developing countries an entrepreneur is a person providing employment opportunities.”
(3) Optimum Utilization of Resources – Natural and human resources of the country; For example, the best use of natural resources, raw materials, minerals, human skills, etc. is possible only through the development of entrepreneurship. Entrepreneurs increase national productivity by making efficient use of untapped resources with their managerial skills. C. W. Cook (C. W. Cook) writes that “Entrepreneurship builds a bridge between the productive resources of the nation and the consumers.”
(4) Reduction in economic and social problems (Minimise Socio-economic Problems) – With the development of entrepreneurship, business enterprises will be established in different parts of the country, due to which the economic and social problems prevailing in the cities such as class conflict, polluted environment, slum settlements Construction, social crime etc. will be reduced. Due to the development of business trends in rural areas, problems like dowry system, intoxicant tendencies etc. will be reduced and the attention of the people will be attracted towards saving and capital formation.
(5) Establishment of a self-sufficient society – Entrepreneurship has an important contribution in the creation of a self-reliant society. Along with meeting the national needs, exports can also be increased by the entrepreneurs. Apart from this, growth in capital, wealth, employment, income etc. is also possible only with the development of entrepreneurship.
(6) Tool of Social Changes – Entrepreneurship is also an important tool of social changes. Due to new inventions and scientific approach, there is less confidence in the society. Courage brings about a change in the thinking and attitude of a person. Society enters a new environment of hard work and entrepreneurship. Education and knowledge are spread. As a result, the society is freed from the stereotypes and worn-out traditions and a new ‘conscious culture’ is established in the society.
(7) Promotes Capital Formation – Finance is called the life-blood of all economic activities. Entrepreneurship collects the savings of the country and gives it the form of capital, increases it, invests in product works and provides appropriate return to the investors. Entrepreneur increases the rate of capital formation by increasing business activities. Razor Naskert has rightly written, “In developing countries only the courageous can play an important role in breaking the impenetrable fortress of capital and can give impetus to the economic forces in capital formation.”
(8) Execution of Government Policies and Plans – Entrepreneurship plays an important role in the implementation of state policies and plans. Under the existing Industrial Policy, Import Export Policy, Licensing Policy, Technology Policy, etc. Entrepreneurs do their business. Establishes the enterprise, develops and produces successful production.
(9) Promotion of innovations – Entrepreneurship encourages innovation, thinking and also creativity in business, as a result, new production methods, new raw materials, new machines, new technology and production of new goods are encouraged in business. gets encouragement. Adventurers also develop new management techniques in their business. They discover new markets through market research and adopt new methods of sales and customer satisfaction.
(10) Rapid Economic Growth – Entrepreneurship develops courageous spirit, creative attitudes and achievement attitude in individuals. With this, individuals discover business opportunities and set up new industries to exploit them. In this way industrial activities are encouraged in the country and economic development is possible.
Functions of Entrepreneurship in Business
The entrepreneur has to do different types of work from the establishment of the enterprise to the sale of goods, but the work of the entrepreneur has to do different types of work till the sale of goods, but the work of the entrepreneur is not limited to the production and distribution of goods, he Many things have to be done in relation to the development of our society and nation. He initiates business activities in the society, gives rise to economic dynamics and performs many activities of social transformation. Therefore, the work of an entrepreneur is quite challenging. The functions of an entrepreneur can be divided into the following three parts-
(a) Decision-related work – It includes those tasks which have to be done before starting the business. Following is this task
(1) Selection of business- First of all the entrepreneur decides which industry or business he should start and which goods or services to produce.
(2) Scale of production – After this he decides what should be the scale of production i.e. whether the production should be done on a large scale or on a small scale.
(3) Optimum use of resources – Entrepreneur mobilizes the means of production in an ideal proportion. So that maximum production can be done at minimum cost.
(4) Determination of the place of production – That is also where the production unit should be established. For this, he chooses such a place where raw material is easily available, labor is available in sufficient quantity and there are adequate transport facilities, means of power etc.
(5) Selection of Goods- The entrepreneur also has to decide which items to select. For production that commodity should be selected whose demand is high in the market.
(b) All the means of production related to distribution work together. So they are rewarded out of the joint production. The task of the entrepreneur is to decide how to give the return of their services to different factors out of joint production.
(c) Risk related work – Every business has risks and uncertainties and the onus of taking risks is on the entrepreneur. In today’s era, an entrepreneur who produces production keeping in mind the demand proves to be successful. If the estimate of demand turns out to be wrong, the entrepreneur has to bear the loss. Thus, to bear the risk in the industry is the first act of the entrepreneur.