Entrepreneurship vs Management Differences
Entrepreneurship originates from having an idea and activities to make those ideas into a reality bearing the risk of business and ownership whereas management is an ongoing process of getting things done given the circumstances and challenges while making dynamic changes in the organization while not bearing the risk of ownership in a more decentralized environments as opposed to entrepreneurship.
An entrepreneur starts a new business with his innovative concepts whereas management runs that business with their various administrative functions. In this article, we look at the differences between entrepreneurship and management.
What is Entrepreneurship?
Entrepreneurship is a process of starting a new business that is innovated, designed, and planned by the entrepreneurs. An entrepreneur who is an originator of new business comes with an innovative idea of making a particular product or rendering the unique services to the society in order to serve them better or to create ease in their lifestyle.
- Now a day these new businesses are also known as start-ups like in information technology sector many entrepreneurs built the start-up companies to serve a better technology to the users.
- Entrepreneurs are very passionate about their ideas and they work hard to make their company successful and earn profits from it. They try to mitigate the risk and develop the business model which is ultimately the desire of the society.
- For example, Flipkart was a small start-up company that comes up with its unique e-commerce services in India. Their entrepreneurs struggle a lot at their beginning but afterward, their company became the biggest online shopping platform in India. It was acquired by Walmart in $16 Billion, the biggest deal in the e-commerce market and their e-entrepreneurs have made huge profits from it.
What is Management?
Management is a continues and never-ending process of planning, managing, organizing, controlling and coordinating the efforts of the people in order to achieve the defined goal of an organization with the help of available resources.
- Some economist also defines management as an art of getting things done through people. It is more an administrative job as a group of people in the management do not work themselves instead they create a team of people who work for them.
- There are many hierarchies in management like a board of directors, head of departments, supervisors, team leaders, etc in big an organization and all of them are keeps directing and managing the work of their subordinates. Management is both dynamic and result-oriented, and their policies are flexible enough to adjust their resources in accordance with the best opportunities available in the market.
- Management is responsible to run the business of an organization in a smooth and effective manner and for that, they have to play various functions like operations, sales, human resources, and support functions, financial functions, and many others. They should have to ensure that all candidates are placed at suitable places according to their professional qualifications, experiences, skills, and abilities in order to bring the utmost efficiency in their assigned tasks.
Entrepreneurship vs Management Infographics
Key Differences Between Entrepreneurship and Management
The key differences are as follows –
- An entrepreneur is an owner of the business as he is the originator of the business idea and a key person behind the formation of an enterprise. Whereas management is employees of an organization as they have to perform their duties in the interest of an organization and owners thereof.
- Being the owner of the business an entrepreneur bears all the risk of success and failure of the business and he is also responsible for not working its new business idea up to the satisfaction of the consumers. Management is not concern about the risk of business failure as they are just employees of an organization and mostly don’t hold any beneficiary interest in that organization except a few key managerial personal’s who might hold shares in the company.
- An entrepreneur gets remuneration in the form of profits out of the business, only after netting all the direct and indirect expensesIndirect ExpensesIndirect expenses are the general costs incurred for running business operations and management in any enterprise. In simple terms, when you want to buy grocery from a supermarket, the transportation cost to get you to the supermarket and back is the indirect expenses.. They certainly have to keep money aside for future expansion and future business opportunities and also for downturns in business cycles and that may result in not gaining any money in the starting years. However, they may earn abnormal profits when their company starts growing in the market. And if any acquisition of the business is made then he will get huge returns on their entire investment made in that innovative business idea since the beginning of the project. Whereas management gets remuneration in the form of salary or any incentive or commission based on their performances.
- Entrepreneurs are motivated to a start new venture with their unique business ideas whereas management is motivated to manage an existing business of the entrepreneurs in a more effective and timely manner.
- Being the originator of the business entrepreneurs have all the decision making authorities in respect of that business whereas management doesn’t have such decision making authorities instead they have to follow the decisions made by the owners except few key managerial personal’s who are involved in the decision-making body of the organization.
- Sustainable growth of the business is the primary motive of entrepreneur whereas management is motivated towards the accomplishment of define organizational goals with the optimum utilization of available resources.
- The overall process of entrepreneurship is centralized whereas the process of management is decentralized due to many hierarchies available in an organization.
|Meaning||A new business started by an entrepreneur||A team of people managing the business|
|Ownership||An entrepreneur is an owner||The team of Management is employees|
|Risk||Entrepreneur bear the risk of business||Management doesn’t bear any risk of business|
|Remuneration||In the kind of profits||In-kind of salary|
|Motivation||To start a new business||To manage the existing business|
|Decision Making||In the hands of the entrepreneur||In the hands of owners, Key Managerial Personnel’s|
|Mission||Sustainable growth of the business||To accomplish define an organisational goal|
It is good to have new businesses with an innovative business idea in a country that will create more employment and improves the living standards of people of the country. It will also help to grow the financial and economic conditions of the country and hence government promotes and supports the start-ups in all its possible ways.
However, entrepreneurship is the risk-takers cup of tea as many start-up companies closed every day due to poor planning, inadequate funds, high competition, lower demands, non-performing business ideas, and many more rational grounds. People leave their existing jobs to start a new business and if that business won’t survive they will come in the financial crunch. Hence it is suggested to ensure the risk involved in forming new businesses and make provisions in advance to mitigate those risks. Finally one can say entrepreneurs are born and they built the management.
This has been a guide to Entrepreneurship vs Management. Here we discuss the top difference between entrepreneurship and management along with infographics and comparison table. You may also have a look at the following articles –