Entrepreneurs vs. Professional Managers

 

Entrepreneur

The term ‘entrepreneur’ is of French origin which means ‘go between’ or ‘between-takers’. An entrepreneur is a person who creates a new enterprise by assembling inputs (i.e. land, labour and capital) for production purposes. He assumes all risk and uncertainty, to achieve profit and growth of the business venture by identifying new opportunities and combining resources to capitalise on them. He innovates new ideas and business processes.

They are classified as an innovative entrepreneur, imitating entrepreneurs, fabian entrepreneurs, and drone entrepreneurs. Further, they can be classified based on business, technology, motivation, area, stages of development, etc. The characteristics of a successful entrepreneur are given below:

• Risk taker

• Commitment and Conviction

• Capacity to analyse

• Initiative and Independence

• High personal efficiency

• High need for achievement

Professional Manager

By the term ‘manager’ we mean a person who gets things done through his subordinates, to accomplish business objectives efficiently and effectively. The five primary functions of a manager are planning, organizing, directing and motivating, coordination and control.

The Professional manager is in charge of the particular division, unit or department of the company. He may directly command workers, or he may direct the supervisors, who will command workers. Therefore, he is the one under whose supervision, his subordinates work and report to him. Professional Managers can be top-level managers, middle-level managers, and low-level managers.

Comparison

COMPARISON	ENTREPRENEUR	PROFESSIONAL MANAGER
Meaning	Entrepreneur refers to a person who creates an enterprise, by taking a financial risk to get a profit.	The manager is an individual who takes the responsibility of controlling and administering the organization.
Focus	Business startup	Ongoing operations
Primary motivation	Achievement	Power
Approach to task	Informal	Formal
Status	Owner	Employee
Reward	Profit	Salary
Decision making	Intuitive	Calculative
Driving force	Creativity and Innovation	Preserving status quo
Risk orientation	Risk taker	Risk-averse

 

The difference between entrepreneur and manager can be drawn clearly on the following grounds:

1. A person who creates an enterprise, by taking a financial risk to get a profit, is called an entrepreneur. An individual who takes the responsibility of controlling and administering the organization is known as a manager.

2. An entrepreneur focuses on business startups whereas the main focus of a manager is to manage ongoing operations.

3. Achievements work as a motivation for entrepreneurs. On the other hand, the primary motivation is power.

4. The manager’s approach to the task is formal which is just the opposite of an entrepreneur's's.

5. An entrepreneur is the owner of the enterprise while a manager is just an employee of the company.

6. A manager gets a salary as remuneration for the work performed by him. Conversely, profit is the reward for the entrepreneur.

7. An entrepreneur’s decisions are driven by inductive logic, courage, and determination; that is why decision-making is intuitive. On the contrary, the decision-making of a manager is calculative, as they are driven by deductive logic, the collection of information and advice.

8. The major driving force of an entrepreneur is creativity and innovation. As against this, a manager maintains the existing state of affairs.

9. While an entrepreneur is a risk taker, the manager is risk averse.

After reviewing the above points, it is quite clear that the entrepreneur and a manager are two different persons in an organisation. So they cannot be juxtaposed. While managers are concerned with managing available resources, entrepreneur focuses on spotting and capitalising on opportunities.