Entrepreneur, enterpriser; one who ventures on or undertakes an enterprise; sometimes applied to a firm or more generally to entrepreneurship as decision-taking. How far business men are individual entrepreneurs in the sense that they risk their capital and own their businesses is not known. Whether the present-day top executive should be called an entrepreneur is debatable. Individual entrepreneurs founded and developed many business enterprises in the nineteenth century. Some present-day units are also run by energetic men who bear risks and co-ordinate resources. In the large public company, however, the board of directors and the senior executives who take the major decisions are not risk-bearers: they do not venture their capital in their own business. The ownership by shareholders is largely separated from executive control.
The entrepreneurial function is nevertheless a central concept in economics since uncertainty implies risks in organizing production. It consists in the task of co-ordinating the flow of resources to produce and sell an output, and it is essentially concerned therefore with decisions which establish and change the direction of the firm. These decisions concern borrowing, investment, price policy, markets, appointment of senior staff. The single entrepreneur would have to assess likely markets and demand structures, forecast the trend of costs, and, in competition, raise capital in the market at the prevailing rates. In the large firm many of these functions are undertaken by executives; decisions about distribution of profits to shareholders or retention within the business are made by the board. This division of decision illustrates the separation of ownership and control. Since the executives are not wedded to the firm in the same sense as an individual owner, it is sometimes argued that they are administrators rather than entrepreneurs, and that there may be a distinction between their personal interests as executives and the interests of the firm as a whole.
These relationships are studied in the economics of the firm as an organization. From the point of view of entrepreneurship there are two main points. First, although the function is located in an executive board rather than an owner/controller/risk-bearer, it revolves around essentially the same kind of decisions. Secondly, the board does not face risks identical with those of the 'entrepreneur', but its future is intimately associated with the survival of the firm. It is not entirely free from shareholders' pressure, or from the possibility of a take-over.
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