An Overview of the Definitions of Entrepreneurship and Intrapreneurship


An Overview of the Definitions of Entrepreneurship and Intrapreneurship

Entrepreneurship Entrepreneurship has no universal definition like other disciplines as many scholars have defined it differently according to their own perspective. But the word entrepreneurship stems from the French word ‘entreprendre‘, which indicates an act in which the individual attempt, or undertake an act of some sort. In fact there are many definitions of the concept ‘entrepreneurship’. Entrepreneurship is as “selfemployment of any sort”.

In 1934, Joseph Schumpeter equated entrepreneurship with the concept of innovation and applied it to a business context, while emphasizing the combination of resources. Entrepreneurship is like the activity that involves identifying opportunities within the economic system. Entrepreneurship as involving "activities necessary to create or carry on an enterprise where not all markets are well established or clearly defined and/or in which relevant parts of the production function are not completely known”. Entrepreneurship as the creation of new organizations.

It also defines entrepreneurship as the willingness and ability of an individual to seek out investment opportunities in an environment and be able to establish and run an enterprise successfully based on the identifiable opportunities.

In addition, entrepreneurship is a process of seeing and evaluating business opportunities, gathering the necessary resources to take advantage of them and initiate appropriate action to ensure success. After critically studying the above definitions, it can be summarized by concluding that entrepreneurship is a function which involves the exploitation of opportunities which exist within a market. Thus, from the definitions above it could be said that while defining the concept ‘entrepreneurship’, emphasis was laid on a wide spectrum of activities such as:

• Self-employment of any sort.

• Creation of organizations.

• Innovation applied to a business context.

• The combination of resources.

• Identification and exploitation of opportunities within the economic system or market.

• The bringing together of factors of production under uncertainty.

It can be concluded that whatever activity that involves any or all of the above activities can be regarded as Entrepreneurship. Entrepreneurship refers to all the processes and activities involved in establishing, nurturing, and sustaining a business enterprise. Entrepreneur Scholars have also given several definitions of the concept ‘entrepreneur’. For instance in 1816, Putari (2006) quoted Say, who asserts that the entrepreneur is the agent "who unites all means of production and who finds in the value of the products ... the reestablishment of the entire capital he employs, and the value of the wages, the interest, and rent which he pays, as well as profits belonging to himself." He views entrepreneurs as change agents (Say, 1816). Knight (1921) views entrepreneurs as individuals who attempt to predict and act upon change within markets. Schumpeter (1934) conceives the entrepreneur as the innovator who implements change within markets through the carrying out of new combinations such as introduction of new techniques of production, reorganization of an industry and innovation. He further argues that the entrepreneur is an innovator, one that introduces new technologies into the workplace or market, increasing efficiency, productivity or generating new products or services (Deakins and Freel, 2009). Cantillon (circa 1730) conceptualized the entrepreneur as: the "agent who buys means of production at certain prices in order to combine them" into a new product (Schumpeter, 1951).

In Quick MBA (2010), the entrepreneur is defined as one who combines various input factors in an innovative manner to generate value to the customer with the hope that this value will exceed the cost of the input factors, thus generating superior returns that result in the creation of wealth.


Views of Entrepreneurship

Economist’s View

Entrepreneur and Entrepreneurship have been a point of interest to economics as early as 1755. The term Entrepreneur seems to have been introduced into Economics by Cantillon, but the Entrepreneur was first accorded prominence by Say. It was variously translated into English as:

• Merchant,

• Adventurer and

• Employer

Though the precise meaning is the ‘undertaker of a project,’ James Stuart Mill popularized the term in England. The concept was vague, and not clear. Entrepreneurs were looked as adventurer. Entrepreneurship was looked as speculative activity. The economist sees an entrepreneur as someone who combines resources such as labour, materials and other assets, introduces changes, innovations and new orders for profitable and rewarding ends.

According to economists, entrepreneurship and economic growth will take place in those situations where particular economic conditions are most favourable. Economic incentives are the major drive for the entrepreneurial activities. They firmly believe that a well-developed market and efficient economic policies foster entrepreneurship. G.F. Papanek and J.R. Harris are the main advocates of this theory. According to them, economic incentives are the main drive for the entrepreneurial activities. In some cases, it is not so evident, but the persons inner drives have always been associated with economic gains. Therefore, these incentives and gains are regards as the sufficient conditions for the emergence of industrial entrepreneurship. When an individual recognizes that the market for a product or service is out of equilibrium, he may purchase or produce at the prevailing price and sell to those who are prepared to but at the highest price. Lack of entrepreneurship is due to various kinds of market imperfections and inefficient economic policies.


B. Sociologist’s View

Entrepreneurship is inhibited by the social system, which denies opportunities for creative facilities: The forces of custom, value system, the rigidity of status, district of new ideas and the exercise of intellectual curiosity, combined together creates an atmosphere inimical to experiment and innovation. Sociologists argue that Entrepreneurship is most likely to emerge under a specific social culture. The sociologist sees the Entrepreneur as goal-oriented and has the capacity to adapt to changing environment. According to the sociologist, social sanctions, cultural values and role expectations are responsible for the emergence of entrepreneurship. Social-cultural values channel economic action that gives birth to entrepreneurship.


C. Psychologist’s View

The psychologist sees an entrepreneur as someone who is being driven by certain forces that are mainly internal, personal attributes and traits. The phenomenon of entrepreneurship development has been viewed, explained and interpreted differently. Among those who stressed the psychological aspects as contributing to entrepreneurial success are Joseph Schumpeter, McClelland, Hagen and Kunkal. The main centre of attention of these theories includes: Schumpeter believes that entrepreneurs are primarily motivated by an atavistic will to power, will to find a private kingdom or will to conquer. According to McClelland, it is the high need for achievement which drives people towards entrepreneurial activities. This achievement motive is inculcated through child rearing practices, which stress standards of excellence, material warmth, self-reliance training and low father dominance. Individuals with high achievement motive tend to take keen interest in situations of high rest, desire for responsibility and a desire for a concrete measure of task performance.  Hagen considers withdrawal of status respect as the trigger mechanism for changes in personality formation. Status withdrawal is the perception on the part of the members of some social group that their purposes and values on life are not respected by groups in the society whom they respect. Hagen identifies four types of events that cover produce status withdrawal:

(a) Displacement by force,

(b) Denigration of valued symbols;

(c) Inconsistency of status symbols with a changing distribution of economic power, and

(d) Non acceptance of expected status on migration to a new society. According to Psychologists, entrepreneurship is most likely to emerge when a society has sufficient supply of individuals possessing particular psychological characteristics.

The main characteristics are:

• An institutional capacity to see things in a new way (vision),

• Energy of will and mind to overcome fixed habits of thought,

• An urge to do something,

• To fulfil a dream,

• The capacity to withstand social opposition; and

• The high need for achievement.


Who is an Entrepreneur?

The word "Entrepreneur" is derived from the French verb 'entrepredre'. It means 'to undertake'. In the early 16th century the Frenchmen who organized and led military expeditions were referred to as 'Entrepreneurs'. In the early 18th century French economist Richard Cantillon used the term entrepreneur to business. Since that time the word entrepreneur means one who takes the risk of starting a new organization or introducing a new idea, product or service to society.

• Having a vision you want to pursue.

• Creation of venture.

• Innovation

• The combination of resources.

• Identification and exploitation of opportunities within the economic system.

• The bringing together the factors of production

• Taking risk for profit purposes.

According to J.B. Say, An entrepreneur is the economic agent who unites all means of production; land of one, the labour of another and the capital of yet another and thus produces a product. By selling the product in the market the pays rent of land, wages to labour, interest on capital and what remains is his profit. Thus an Entrepreneur is an organizer who combines various factors of production to produce a socially viable product. An entrepreneur can be regarded as a person who has the initiative skill and motivation to set up a business or enterprise of his own and who always looks for high achievements. He is the catalyst for social change and works for the common good. They look for opportunities, identify them and seize them mainly for economic gains. An action oriented entrepreneur is a highly calculative individual who is always willing to undertake risks in order to achieve their goals. According to Joseph Schumpeter, An entrepreneur in an advanced economy is an individual who introduces something new in the economy, a method of production not yet tested by experience in the branch of manufacturing concerned, a product with which consumers are not yet familiar, a new source of raw material or of new market and the likes.

According to Cantillon, An entrepreneur is the agent who buys factors of production at certain prices in order to combine them into a product with a view to selling it at uncertain prices in future. An entrepreneur is the person who bears risk, unites various factors of production; to exploit the perceived opportunities in order to evoke demand, create wealth and employment. Pinson (2010) visualized the entrepreneur as a person who starts a business to follow a vision, to make money, to be the master of his/her own soul (both financially and spiritually) and is an "educated" risk taker. Pickle and Abrahamson (1990) sees an entrepreneur as someone who organizes and manages a business, undertakes and assumes the risks for the sake of profit making.

Murphy (2010) conceives an entrepreneur as a person who is dynamic and continues to seek opportunities and/or different methods of operation and will do whatever it takes to be successful in business.

Reiss (2010), views the entrepreneur as the person that recognizes and pursues opportunities without regard to the resources he/she is currently controlling, with confidence that he/she can succeed, with the flexibility to change course as necessary, and with the will to rebound from setbacks.

Envick and Langford (2000) define an entrepreneur as someone who owns and operates his/her own business. Bagby (1998) sees an entrepreneur as a person that utilizes the opportunity of instability, turbulence, lack to produce something new or modifies an existing one for profit motive.

In other words, Entrepreneur perceives the market opportunity and then has the motivation, drive and ability to mobilize resources to meet it. An entrepreneur has possession of a new enterprise, venture or idea and assumes significant accountability for the inherent risks and the outcome (Wikipedia, 2010).

He or she has the capacity and willingness to undertake conception, organization, and management of a productive venture with all attendant risks, while seeking profit as a reward (Business Dictionary, 2010). Interestingly, small business experts also have their definitions of the concept ‘entrepreneur’ (Thinking like, 2010) for instance: Reiss (2010), views the entrepreneur as the person that recognizes and pursues opportunities without regard to the resources he/she is currently controlling, with confidence that he/she can succeed, with the flexibility to change course as necessary, and with the will to rebound from setbacks.

Murphy (2010) conceives an entrepreneur as a person who is dynamic and continues to seek opportunities and/or different methods of operation and will do whatever it takes to be successful in business. Given the above wide range of factors and behaviour which are used to define the concept ‘entrepreneur’, we can see the difficulty and impossibility of finding a unified definition of the ‘entrepreneur’.

Hence, to Di-Masi (2010), the concept ‘entrepreneur’ can be best used in the past tense to describe a successful business person. Thus, Entrepreneurs are business persons who identify the existence of business opportunities and based on this they create businesses thereby creating new products, new production methods, new markets and new forms of organization to satisfy human needs and wants mostly at a profit. It should also be noted that though most entrepreneurial businesses start small, entrepreneurs are not only small business owners; they can also be big business owners. This is because successful entrepreneurs, unlike small business owners, are innovative and, when operating in an enabling business environment, can rapidly create a large amount of wealth while bearing very high risk. In fact, innovation is considered to be the strategic tool of entrepreneurs; this is one of the tools that enable them gain strategic advantage over competitors (Quick MBA, 2010).

Entrepreneurs are individuals or group of individuals who carryout entrepreneurship activities to build business empires.


Who is an Intrapreneur?

There are given situations where an Entrepreneur is not able to establish his or her own business and as such has to work in an organization. In this case they are referred to as ‘Intrepreneurs’ i.e. Entrepreneurs within an organization. These individuals are entrepreneurs in their own right because they pursue the exploitation of business opportunities as they emerge and are also visionaries within a given organization. Thus, once identified, these individuals should be encouraged to manifest their entrepreneurial abilities to the benefit of the organization otherwise they will be frustrated and may leave the organization or start their own businesses. Entrepreneurship is the processes and activities by which corporate organization behave entrepreneurially.

According to Jones, George and Hill (2000), an intrapreneur is a manager, scientist, or researcher who works inside an existing organization and notices opportunities for product improvements and is responsible for managing the product development process. The above definition was corroborated by Pinchot (1985), when he coined the term intrapreneur to represent an innovative individual (employee) in an existing business organization who perceives new 17 market opportunities, secures resources and initiates the realization of the opportunity. Rather than perform the roles of an entrepreneur as an independent unit and for private economic gains, the intrapreneur performs the same roles within an existing large organization to enhance the competitiveness and profitability of the organization.



Stoner et al., (2009) opined that in today’s faced-paced economy, companies that do not keep up may go the way of the dinosaur. According to them, a large number of companies have lost their entrepreneurial spirit that they started with. As they have grown larger, their ability to be innovative and flexible may have been stifled by the very size and success of the organization. Many concepts have been used to describe how managers can keep organizations from stagnating, make organizations adaptive, and promote organizational climates that support creative learning. Perhaps, the most widely used term for this process is intrapreneurship. Intrapreneurship or corporate entrepreneurship is the process whereby an organization seeks to expand by exploring new opportunities through new combinations of its existing resources. Intrapreneurship requires special attention from managers, because by design it cuts against the grain of established organizational activities.

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