Types, Importance and Roles of Entrepreneurship and Entrepreneur


Types, importance and roles of Entrepreneurship and Entrepreneur

Based on the interaction with the business environment, various types of entrepreneurs can emerge. To this effect, we identify the four types of entrepreneurs as:





1. Innovative: This type of entrepreneur is preoccupied with introducing something new into the market, organization or nation. They are interested in innovations and invest substantially in research and development.

2. Imitating: These are also referred to as ‘copy cats’. They observe an existing system and replicate it in a better manner. They could improve on an existing product, production process, technology and through their vision create something similar but better. This is the case of the student becoming better than the master!

3. Fabian: These are entrepreneurs that are very careful and cautious in adopting any changes. Apart from this, they are lazy and shy away from innovations.

4. Drone: These are entrepreneurs that are resistant to change. They are considered as ‘old school’. They prefer to stick to their traditional or orthodox methods of production and systems.

Entrepreneurs occupy three roles, namely as agent of

(1) Economic Change

(2) Social Change  

(3) Technological Change.

These are referred to as behavioral roles. The types and roles of entrepreneur notwithstanding, all entrepreneurs possess certain characteristics and are motivated to become entrepreneur due to certain factors or circumstances which we shall discuss.


Characteristics of Entrepreneurship and Entrepreneurs

Scholars do not agree on the characteristics possessed by entrepreneurs.

Hence, several scholars through various studies identified several characteristics or traits possessed by entrepreneurs some of which are discussed as follows.

Creative Activity: Entrepreneurship entails innovations. It deals with product innovation, production techniques innovation while bearing in mind the market.

Dynamic Process: Entrepreneurship is a dynamic process that has to bear in mind the dynamic business environment.

Purposeful Activity: Entrepreneurship is an activity embarked upon for a specific purpose. This could be for profit making purposes, for humanitarian purposes or to bring a difference to the market.

Involves Risk: Entrepreneurship is a very risky venture; entrepreneurial decisions can have far-reaching impact on the organization, people in the organization and even the economy. These decisions are critical, enormous and cannot be easily reverted.

The following are characteristics of entrepreneurs as:

·Risk bearing ability

·Technical knowledge

·Ability to gather financial

·Motivational resources.

On the other hand, we regards the major characteristics of entrepreneurs as: self- confidence and being multi-skilled, confidence in the face of difficulties and discouraging circumstances, risk-taking, innovative skills, results-oriented, total commitment. Stephenson (2010) believes that entrepreneurial characteristics are: seriousness, planning ability, prudence, and team work. Hadzima and Pilla (2010) conclude that the characteristics of highly effective entrepreneurs include: ability to deal with risk, being results oriented, enthusiasm and energy, growth potential, team work, multitasking ability and improvement orientation.

Driessen and Zwart (2010), after carefully studying various researches conducted into the characteristics of successful entrepreneurs, identified three main characteristics and five secondary characteristics of successful entrepreneurs. According to them, the main characteristics are: need for achievement (n Ach), internal locus of control (ILOC) and risk taking propensity (RTP), while they also stated the five secondary characteristics as: need for autonomy (n Aut), need for power (n Pow), tolerance of ambiguity (ToA), need for affiliation (n Aff), and endurance (End). They then concluded that in these studies, successful entrepreneurs score significantly higher on these characteristics than less successful entrepreneurs, small business managers, and non-entrepreneurs

Other characteristics identified are:

discipline, vision or creativity, calmness, risk tolerance: Focused, balance, commitment, perseverance, initiative, versatility, dynamic, knowledgeable/skilled, emotional or mental strength, and resilience. A careful look at the characteristics listed above reveals that some of them overlap while most of them are divergent thereby further fuelling the debate. Some of these characteristics are briefly discussed below

Risk Bearing Ability: The entrepreneur must have the capacity to bear risk. This is because the new venture is created in an uncertain and risky environment. Di-Masi (2010, however, noted that although risk bearing is an important element of entrepreneurial behavior, many entrepreneurs have succeeded by avoiding risk where possible and seeking others to bear the risk. Basically, what he is saying here is that entrepreneurs bear calculated risks and are more than glad to let others bear their risk when it is convenient for them.

Technical Knowledge: Depending on the kind of venture created, the entrepreneur must have technical expertise about production techniques and marketing.

Ability to Gather Financial and Motivational Resources: Financial and motivational resources are needed for the creation of the new business. Sometimes the entrepreneur, as an individual may not have these resources but he/she/they should have the ability to gather it from those who have it.

Self Confidence and Multi-Skilled: The entrepreneur must have self -confidence and believe in him/herself. Self-confidence is an important characteristic that enables individuals to handle any situation without having inferiority or any other type of complex. The entrepreneur also has to be a jack of all trade and master of all. He/she must possess different skills unlike other individuals. For instance, assuming an entrepreneur is a marketer, the entrepreneur should not only possess marketing skills and interpersonal skills but also language skills i.e. ability to speak more than one language. This definitely will be an added advantage!

Confidence in the Face of Difficulties and Discouraging Circumstances: The entrepreneur must be steadfast and resolute and be ready to move on even in the face of adversity. He/she should be a ‘never say never’ kind of person; everything is possible for the entrepreneur.

Innovative skills: The entrepreneur may not necessarily be an 'inventor' but the one that can make a difference; he/she should be able to see what others cannot see and be able to carve out a new niche in the market place.

Results-Orientated: The entrepreneur is one who knows how to get results under any circumstances either with others or through others. The entrepreneur does this by setting goals and ensuring that such goals are doggedly pursued by all concerned willingly and with joy.

Risk-Taker: The business environment is dynamic and filled with uncertainties and risk. In order to succeed the entrepreneur has to take risk. Successful entrepreneurs take calculated risks and in some cases shift the risks to others.

Total Commitment: Starting /creating a new business is a serious exercise that requires a lot of commitment and hard work. It is like bringing a child into the world and nurturing the child to adulthood. This requires commitment, dedication, hard work, energy and single mindedness otherwise the ‘child’ (i.e. business) may die prematurely (Di-Masi, 2010).

Calm: Entrepreneurs need to be cool, calm and collected. They have to remain calm even when exposed to stress, emergency or crisis situations.

Focused: In getting things done and starting and maintaining a business attention has to be paid to a lot of details. Small things when not handled properly or noticed on time may lead to disastrous outcomes.

Tolerance: The entrepreneur has to relate with people. People vary in terms of their perceptions, personality, motivations and attitudes amongst other things. The entrepreneur needs to be tolerant while not being weak, in order to get things done.

Balance: Though, the entrepreneur is a human being, he/she has to be like a super human being in order for him to succeed. To this effect, he/she has to be able to balance all emotions and characteristics and remain focused and objective while having emotional or mental strength and resilience. Balance is important because too much of everything is bad.

Versatility: The entrepreneur has to be versatile and be ready to learn and use information technology and other technology to the best advantage.

Seriousness: The entrepreneur has to believe in him/her and the business and get things done with total seriousness. As mentioned earlier, starting a new business is like giving birth to a child; it is indeed a very serious business.

Planning Ability: The entrepreneur must be a planner; he/she must formulate goals and develop action plans to achieve them. Planning is important for he/she who fails to plan, plans to fail!

Prudence: The entrepreneur must be versatile in financial management. This is because finance is the life-wire of the business. Also, to achieve the profit objective, the entrepreneur must engage in efficient and effective financial management, and have sound financial policies and practices.

Customer-Centric: Businesses are created to satisfy unmet needs. A successful entrepreneur must be able to anticipate customers’ needs and satisfy them through his/her product offerings. To do this effectively, the entrepreneur has to adopt a customer-centric or customer-focused approach.

Team Player: Creating a successful business is a one man business but maintaining and sustaining the business cannot be done by one person. The entrepreneur needs others to work with him hence he has to have a formidable or winning team. To this effect, the entrepreneur has to be an effective team manager and recruit the right team members but the entrepreneur’s most important team members are the customers for without customers a business cannot survive (LifeHack, 2008; Rockstar, 2008; Di-Masi, 2010; Driessen & Zwart, 2010; Hadzima & Pilla, 2010 Stephenson, 2010).

Roles of Entrepreneurs

In order to perform their functions effectively and operate a successful business, entrepreneurs have to perform certain roles. These roles are the same as the basic managerial roles which are identified by Henry Mintzberg in 1973.

They are as follows:

Figure Head Role: The entrepreneur has to act as figure head in the organization, as such; he/she has to perform ceremonial duties. This is done by representing the organization in formal and informal functions.

Leader Role: The entrepreneur has to act as a leader because the entrepreneur is the one who brings other people together in order to create the business. Thus, he/she has to lead the people in the organization by hiring, firing, training and motivating them.

Liaison Role: The entrepreneur has to act as the link between the business and the parties outside the business.

Monitor Role: The entrepreneur acts as a monitor; he monitors both the internal and the external environment of the business constantly.

Information Disseminator Role: The entrepreneur has to act as the organizational representative and transmit information both within and outside the business. Spokesman Role: The manager has to act as the spokesman of the business; he/she is the person for the business both inside and outside.

Entrepreneurial Role: This is the basic role of the entrepreneur; he/she launches new ideas for the business and bears the risk.

Disturbance Handler: The entrepreneur also acts as arbitrator in situations of conflict so as to maintain organizational harmony.

Resource Allocator: The entrepreneur decides on how the scarce resources of the business are allocated among its competing ends so as to achieve organizational goals and objectives.

Negotiator Role: The entrepreneur has to negotiate on behalf of the business both with the other categories of labour and other outside sources. The specific entrepreneurial roles noted earlier on have a number of activities in each role.

They are specified below:

Social Roles of Entrepreneur

· Transformation of traditional indigenous industry into a modern enterprise.

· Stimulation of indigenous entrepreneurship.

· Job or employment creation in the community.

· Provision of social welfare service of redistributing wealth and income.

Economic Roles of Entrepreneur

· Bearing the ultimate risk of uncertainty.

· Mobilizing savings necessary for the enterprise.

· Providing channel for the disposal of economic activities.

· Utilizing local raw materials and human resources.

Technological Roles of Entrepreneur

· Stimulation of indigenous technology in the production process.

· Adapting traditional technology to modern system.

· Adapting imported technology to local environment.

· Developing technological competence in self and the workforce through innovation (Ogundele, 2007).

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