What is the difference between entrepreneurial management and traditional management?

The main difference between entrepreneur and manager lies in their standing, i.e. while an entrepreneur is the owner of the organization and so he is the one who bears all the risks and uncertainities in the business, the manager is an employee of the company.

Content: Entrepreneur Vs Manager

1. Comparison Chart
2. Definition
3. Key Differences
4. Conclusion

Comparison Chart

Definition of Entrepreneur

The term ‘entrepreneur’ is a French origin which means ‘go between’ or ‘between-takers’. An entrepreneur is a person who creates a new enterprise by assembling inputs (i.e. land, labour and capital) for production purposes. He assumes all risk and uncertainty, in order to achieve profit and growth of the business venture by identifying new opportunities and combining resources for the purpose of capitalising them. He innovates new ideas and business processes.

They are classified as an innovative entrepreneur, imitating entrepreneur, fabian entrepreneur, drone entrepreneur. Further, they can be classified on the basis of business, technology, motivation, area, stages of development, etc. The characteristics of a successful entrepreneur are given below:
Risk taker

• Commitment and Conviction
• Capacity to analyse
• Initiative and Independence
• High personal efficiency
• High need for achievement

Definition of Manager

By the term ‘manager’ we mean a person who gets the things done through his subordinates, with the aim of accomplishing business objectives efficiently and effectively. The five primary functions of a manager are planning, organising, directing and motivating, coordination and control.

The manager is in charge of the particular division, unit or department of the company. He may directly command to workers, or he may direct the supervisors, who will command workers. Therefore, he is the one under whose supervision, his subordinates work and report to him. Managers can be top level managers, middle-level managers, low-level managers.

The difference between entrepreneur and manager can be drawn clearly on the following grounds:

1. A person who creates an enterprise, by taking a financial risk in order to get profit, is called an entrepreneur. An individual who takes the responsibility of controlling and administering the organisation is known as a manager.
2. An entrepreneur focuses on business startup whereas the main focus of a manager is to manage ongoing operations.
3. Achievements work as a motivation for entrepreneurs. On the other hand, the primary motivation is the power.
4. The manager’s approach to the task is formal which is just opposite of an entrepreneur.
5. An entrepreneur is the owner of the enterprise while a manager is just an employee of the company.
6. A manager gets salary as remuneration for the work performed by him. Conversely, profit is the reward for the entrepreneur.
7. An entrepreneur’s decisions are driven by inductive logic, courage, and determination; that is why the decision making is intuitive. On the contrary, the decision making of a manager is calculative, as they are driven by deductive logic, the collection of information and advice.
8. The major driving force of an entrepreneur is creativity and innovation. As against this, a manager maintains the existing state of affairs.
9. While entrepreneur is a risk taker, the manager is risk averse.

Conclusion

After reviewing the above points, it is quite clear that entrepreneur and manager are two different persons in an organisation. So they cannot be juxtaposed. While managers concerned with managing available resources, entrepreneur focuses on spotting and capitalising opportunities.