The concept of entrepreneurship is multifaceted. There are assorted, diverse and somewhat contradictory units of definitions of the term. As a method out the definitional dilemma, this article aims to elucidate the financial perspective on entrepreneurship.
The economic perspective rests on certain financial variables which embrace innovation, risk bearing, and resource mobilization.
Innovation/Creativity In this approach, entrepreneurs are people who perform new mixture of productive resources. The key ingredient, the carrying out of new combination (or innovation) distinguishes entrepreneurs from non-entrepreneurs. While new venture creation appears as probably the most prevalent form of entrepreneurship, there exist different forms. Entrepreneurship also includes the initiation of adjustments within the form of subsequent expansion within the amount of products produced, and in present form or structure of organisational relationships.
Within the entrepreneurship literature, some scholars have questioned using group creation as criterion for entrepreneurship. It has been argued that organizations reminiscent of political events, associations and social groups are at all times created by people who find themselves not “entrepreneurs.” Interesting as it might sound, the terms entrepreneurship and entrepreneur have been adopted by assorted scholars to satisfy the innovation and spirit of the time. This is evidenced by attempts to apply entrepreneurial thinking to up to date group-oriented workplace strategies. Members of such groups – political events, associations and social teams – therefore, may very well be called entrepreneurial teams. Besides, activities inherent in such groups have flourished lately, and are increasingly being described as social entrepreneurship.
Risk Taking This is one other financial variable upon which the financial perspective revolves. Risk taking distinguishes entrepreneurs from non-entrepreneurs. Generally, entrepreneurs are calculated risk takers. They bear the uncertainty in market dynamics. This notion has its critics and advocates. Entrepreneurs may not necessarily risk her own funds but risk other personal capital similar to repute and the potential of being more gainfully employed elsewhere.
Resource Mobilization right here, entrepreneurship is reflected in alertness to perceived profit opportunities within the economy. This implies the allocation of resources in pursuit of alternatives with the entrepreneur playing the position of an opportunity identifier. This approach, entrepreneurs are distinguished by their ability to determine persistent shocks or challenges (of long run opportunities) to the surroundings, after which to synthesize the information and take decisive actions based upon it.
This article has conceptualized entrepreneurship primarily based on resource mobilization, risk taking, and innovation. Beyond the above-talked about financial variables, entrepreneurship may also be considered based mostly on a set of personal traits, motives and incentives of the actor in the entrepreneurship act. This is the psychological perspective, the topic of a future article. In addition to the psychological perspective, we will also look at the process and small enterprise perspectives.
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