briefly discuss three important features of entrepreneurship
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Answer:
Concept of Entrepreneurship:
The word “entrepreneur” is derived from the French verb enterprendre, which means ‘to undertake’. This refers to those who “undertake” the risk of new enterprises. An enterprise is created by an entrepreneur. The process of creation is called “entrepreneurship”.
Entrepreneurship is a process of actions of an entrepreneur who is a person always in search of something new and exploits such ideas into gainful opportunities by accepting the risk and uncertainty with the enterprise.
Characteristics of Entrepreneurship:
Entrepreneurship is characterized by the following features:
1. Economic and dynamic activity:
Entrepreneurship is an economic activity because it involves the creation and operation of an enterprise with a view to creating value or wealth by ensuring optimum utilisation of scarce resources. Since this value creation activity is performed continuously in the midst of uncertain business environment, therefore, entrepreneurship is regarded as a dynamic force.
2. Related to innovation:
Entrepreneurship involves a continuous search for new ideas. Entrepreneurship compels an individual to continuously evaluate the existing modes of business operations so that more efficient and effective systems can be evolved and adopted. In other words, entrepreneurship is a continuous effort for synergy (optimization of performance) in organizations.
3. Profit potential:
“Profit potential is the likely level of return or compensation to the entrepreneur for taking on the risk of developing an idea into an actual business venture.” Without profit potential, the efforts of entrepreneurs would remain only an abstract and a theoretical leisure activity.
4. Risk bearing:
The essence of entrepreneurship is the ‘willingness to assume risk’ arising out of the creation and implementation of new ideas. New ideas are always tentative and their results may not be instantaneous and positive.
An entrepreneur has to have patience to see his efforts bear fruit. In the intervening period (time gap between the conception and implementation of an idea and its results), an entrepreneur has to assume risk. If an entrepreneur does not have the willingness to assume risk, entrepreneurship would never succeed.
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Answer:
Features of Entrepreneurship
1. Economic Activity: Entrepreneurship is regarded as an economic activity because it is concerned with setting up a business enterprise in pursuit of earning profit.
2. Dynamic: Entrepreneurship is dynamic in nature as the success of an entrepreneur depends upon the ability to innovate constantly in the light of changing situations.
3. Risk: Entrepreneurship involves assuming risks of varied kinds and proportion in order to realise desired goals.
4. People with high competence: Entrepreneurship is suitable for the people who are equipped with the required knowledge and skills to work under challenging innovative situations.
5. Purposeful activity: Entrepreneurship involves identification and implementation of new business ideas with the purpose of benefitting the people at large.