Question

Who is an entrepreneur? Explain any three functions of an entrepreneur.

Answer 1

Entrepreneur: He undertakes all risks and organise the activities related to the business. He has all the qualities of leadership and an experienced and skilled person to guide and lead a company. He makes plans and gets it implemented. He is resourceful and tactful in order to run the whole organisation. He is responsible for the success as well as for the loss. This is the fourth factor of production. In simple words, the person who takes up the risk and organizes the business is known as an "entrepreneur". The entrepreneur act as a manager and also takes up the risk of the business, where as the manager or an organiser only manages the work in a predetermined manner, but he is not liable for any risk or loss in business.
Functions of entrepreneur:
(i) Risk Bearing: He has to bear the risks which can be non-insurable (changes in govt policy).
(ii) Innovator: The entrepreneur conceives new ideas, new products and new processes. He also develops new techniques with a view to avail to better opportunities of maximising profitability in the business. Thus, the entrepreneur always looks for changes and modification in business to further improvement.
(iii) Organizing: The success of business depends directly upon properly planned organizations. Organizing means determining and deciding about the entire group of persons who need to be employed to take up different responsibilities and duties to execute the projects and plans off the entrepreneur. This is one of the most important functions, or to say the main functions which has to be performed by the entrepreneur. In modern times, the organization has become very important and a crucial factor due to complicated nature of present productive systems.
(iv) Policy maker: He is the one who makes plans on which the whole organisation runs. He hold regular meetings and makes guidelines and distributes the work.