Write short answer for the following question :
Functions of Entrepreneur
Meaning: -An entrepreneur is one who organizes the factors of production and takes necessary actions to run the business.
The new Encyclopaedia of Britannica defines “An entrepreneur is an individual who bears the risk of operating a business in the face of uncertainty about the future conditions”.
Peter F Drucker defines: - “one, who always searches for change, responds to it and exploits it as an opportunity”.
The entrepreneur performs vital functions. The main functions are as briefly stated as follows:
- Initiates Business Enterprises: - The foremost function of an entrepreneur is that he in initiates the business enterprise. For this purpose, he performs the following:
- Generates ideas to set up a business unit.
- Plans for the setting up of business unit.
- Organises the factors of production- land, labour, and capital.
- Risk Bearing: - The entrepreneur assumes the risks of his business. A person who can take risk can become an entrepreneur. Risk taking is the heart of entrepreneurship. Those who are not inclined (of a mind) to take risk cannot become entrepreneurs. It is to be noted that successful businessman take calculated risks.
- Decision Making: - An entrepreneur is required to take several decisions. The decisions in respect of
- Location of the business unit, Selection of employees, Obtaining of funds, Productiondecisions.
- Marketing and distribution decisions.
- Coordination: -An entrepreneur performs the functions of coordination. He coordinates the working of the business enterprise. He has to coordinate the various functional departments such as production, marketing, finance, etc.
- Combines the factors of production: -The entrepreneur has to combine the factors of production in such a way that he gets maximum return on investment. Therefore, there should be a maximum return on investment. Therefore, the should be a proper mix of land, labour and capital to get highest possible returns.
- Innovation: - The entrepreneur should be imaginative and innovative. He should be dynamic in nature. Therefore, a successful entrepreneur is always on the book out for
- New ideas, new products, new processes or methods, etc.
- Maintain Relations: -An entrepreneur has to maintain good relations with several parties such as:
- Government authorities,
- Customers, Suppliers,
- Other relevant section of the society.
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