[Commerce Class Notes] on Business Management and Entrepreneurship Pdf for Exam

Entrepreneurship refers to the ability to develop and organise a business enterprise. It involves running a business for earning profit. An entrepreneur is a decision-maker person who establishes and administers a startup along with the risks and uncertainties entitled to it. Business management refers to the process of managing the administration of a business organisation. A manager is responsible for overseeing the business operations and reviewing the contracts. He helps the employees in working towards the fulfilment of the organisation’s goals and objectives. More often, the term entrepreneurship and small business management are misunderstood as one. However, there is a difference between these two.

Entrepreneurship can be defined as the desire and ability to establish and administer a startup venture. It involves the will to succeed in the venture and make profits. Generally, an entrepreneur earns profits by combining land, labour, natural resources and capital. 

Who is an Entrepreneur?

An entrepreneur is a person who is willing to take risks to earn profits. He must be a person with great imaginative power, orderliness and professionalism. He must be dedicated and opinionated. 

What is Management?

The management of a business is its foundation which organises and structures its entire ecosystem. Management refers to the overall functioning of the business. It involves planning and creating, managing and governing. It is an executive function which helps in the utilisation of all the resources of a company. 

The number of managers in a company depends upon the size of its management. Generally, the manager of a business is responsible for getting all the jobs done. He directly helps the company in achieving its goals and objectives. 

Difference Between Business Management and Entrepreneurship

Business management and entrepreneurship play a very important role in its success. However, these two are different from each other. The following are the main points of difference between management and entrepreneurship in business:

Meaning

Entrepreneurship is the process of building and creating an enterprise. It involves taking a financial risk to earn profits. An entrepreneur is the owner of the organisation and is directly affected by its working.

Management is a business activity. It involves getting jobs done by other workers in the organisation. A manager is responsible for managing all the business activities.

Function

Business management entrepreneurship involves deciding the production policy of the business organisation. An entrepreneur takes all the decisions such as what is to be produced and in what quantity, the place of production etc. 

The management in a company is responsible for the following activities- planning, organising, controlling and leading. A manager looks after an ongoing venture in the company. He allocates the employee resources and delegates responsibilities between them.

Status 

The status of an entrepreneur is of the owner of the business organisation. He is responsible for its working and success.

The manager is an employee of the organisation. He is hired by the entrepreneur and is given a monthly salary.

Rewards

An entrepreneur is the owner of the organisation earns from its profits and has to bear the losses. He does not earn a specified fixed amount every month.

A manager is a paid employee of an organisation. He gets a fixed salary to carry out his job. His reward is not affected by the profits or losses of the company.

Goals and Objectives

Its owner or entrepreneur sets the goals and objectives of an organisation. The concerned body is responsible for deciding the policies of the company. The job of a manager is to imply the goals and objectives set by the entrepreneur. He cannot decide the objectives or alter any policies on his own.

Decision Making

The decisions made by an entrepreneur are based on his gut feelings and personal perception. He is free to make any decision on his own without considering the advice of others. 

A manager has to make decisions after collecting all the information in detail. He has to analyse every factor before concluding. He has to consider the company’s objectives and policies before making any decision. 

Innovation

An entrepreneur is an innovator. He is responsible for bringing creative and innovative ideas into the business. A manager is an executor. His only responsibility is to execute the ideas and decisions made by entrepreneurial management.

Fraud

An entrepreneur is the owner of the business. He can never get involved in any fraud in the organisation.

A manager is a paid employee of the organisation. He can be involved in fraudulent behaviour or cheating by not giving his best or working inefficiently.

This article highlights the major difference between entrepreneurship and management. Both entrepreneurship & small business management play an important role in the success of a business organisation.