Entrepreneurship is the act of creating an enterprise or business and at the same time, constructing and scaling it to generate a profit. Entrepreneurship is what people do to take their profession and goals into their hands. In this article, we discuss the difference between entrepreneurs and management. You can not compare these two principles without understanding the Functions of human resource management systems, the advantages of the system approach in management, and most importantly the 7 functions of management proposed by Henry Fayol. They will also help you understand just how different these two concepts are and the difference between entrepreneur and management.
It is building one’s life on his or her terms without having someone over them telling them what to do when to do it and eventually, how to do it. It is all about deciding to take charge of destiny on your own without bosses. Managers can act as stumbling blocks to success as you will have to stick to their schedule and ideas. Following the four principles of scientific management, it becomes clearer the difference between management and administration. Even though it’s a different subject, in today’s world 14 Principles Of Management includes the application of some skills in entrepreneurship. Business administration which is a part of management consists of entrepreneurship management.
What is the difference between entrepreneur and management?
Hisrich (1990) defines an entrepreneur as “someone who demonstrates initiative and creative thinking, is able to organize social and economic mechanisms to turn resources and situations to practical account, and accepts risk and failure.” An entrepreneur is someone who sets up a commercial enterprise with the intention to make a profit.
An entrepreneur is a person who starts a side business that may in the end create a full-time, sustainable business with employees. An entrepreneur is similar to a freelancer in some ways. If your entrepreneurial mindset is targeted at creating a profitable business, you match this definition.
Entrepreneurship involves an entrepreneur who takes action to make a change where they are, and sometimes, the change they make impacts the whole world, such as in the cases of the world’s most renowned entrepreneurs such as Elon Musk, Bill Gates, the late Steve Jobs, and Jeff Bezos. The aforementioned entrepreneurs and many others have one component in common: action. They see a problem as an opportunity for them to make money. They are good at figuring out solutions. Entrepreneurship entails the execution of ideas.
Management, by definition, is “the art of getting things done through others and with formally organized groups” (Koontz and Weihrich, 1988). Another scholar, Terry (1972) defines management as “a distinct process consisting of planning, organizing, actuating and controlling; utilizing in each both science and art, and followed in order to accomplish the pre-determined objective.” Terry (1972).
A manager, according to George () is “one who accomplishes the objectives by directing the efforts of others.” Therefore, management is nothing more than the process of managing an organization through the use of available resources to achieve the goals or objectives set by the entrepreneur. Thus, management is an employee of the company. Some of the main functions of management are:
- Coordinating and controlling
Simply put, management means a particular procedure of making plans, organizing, staffing, directing, and controlling the efforts of the people who are engaged in business enterprise which enables the predetermined goal of such organizations to be achieved.
Management and entrepreneurs are often misunderstood due to the fact they are the vital individuals of a company engaged in management, administration, and control of the enterprise or business. Nevertheless, there is a great distinction between the two concepts. The primary characteristic that distinguishes these two terms is the entrepreneur is the proprietor of the business and bears both profit and loss. The management works on operating and running the business enterprise with the help of numerous administrative capabilities.
Differences between entrepreneurship and management:
- Entrepreneurship is the process of starting a business by taking on financial risks in order to generate profit, while management is the art of achieving a goal through proper planning, organization, direction, and control.
- Entrepreneurs focus on new business ventures. The management works on current operations.
- The ownership of the organization also belongs to the entrepreneur. Meanwhile, management is an employee who runs things on the behalf of the organization.
- These entrepreneurs receive profits as a reward for their work whilst management receives a salary for their work.
- They take risks whereas management is unwilling to take risks. Also, entrepreneurs have full business and financial freedom, but management does not have full business and financial freedom.
- They are innovators while management implements innovative ideas.
In conclusion, though similar, this article has acknowledged that there are key differences between entrepreneurship and management. Entrepreneurship also includes the act of creating an enterprise with the view of making a profit. Contrarily, management is running a business on behalf of an owner.
Hisrich, R. D. (1990) Entrepreneurship/Intrapreneurship
Koontz, H and Weihrich, H. (1988) Management
Terry, G. R. (1972). Principles of Management
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