This document provides an in depth and thorough summary of chapter 2 of Introduction to Business Management 11th edition (Erasmus et. al.). It is ready for exam and tests. Everything is laid out as it is in the textbook. All needed information is provided in short. It is written in an easy to study...
Chapter 2
Introduction
Entrepreneurs, someone who starts a business with the intention of making a profit, they take the necessary risks
should the new venture fail.
The entrepreneur’s reward for taking initiative and risks is profit, and punishment for making wrong decisions are loss.
Different concepts of what an entrepreneur is
Scientists have different views on whom or what an entrepreneur exactly is:
Economists: entrepreneurs combine resources to make products and services to make profit. Focus on what they
do (people driven by profit)
Behaviourists: (psychologists and sociologists) describe entrepreneurs according to their characteristics
Marxists: (people who want equality) see entrepreneurs as exploiters
Corporate managers: see entrepreneurs as small operators who lack potential to manage large enterprises
Proponents of market economy: see entrepreneurs as economic force responsible for (success) of a country
Anthropologists: see entrepreneurship as development of civilisation
Entrepreneurship in South Africa
The role of entrepreneurs and small businesses in society
The source of economic growth and social development
Brings other factors of production into motion
Mobilise natural, human and financial resources
Creation of employment opportunities
Not all small business owners are entrepreneurs:
Satisfied with autonomy and earning a reasonable income
No intention of growing & developing business entrepreneurially
Merely alternative to working as employee
Satisfy owner’s need for independence or lifestyle needs
Small business are still vital and accounts for 75% of employment, they create markets
They initiate change, create wealth, and develop new enterprises
Strategic role of small businesses revolve around production, innovation, aiding big businesses
Entrepreneur’s traits and characteristics
Achievement motivation -
Refers to a person’s higher-than-average need to achieve (attracted to jobs that challenge their skills)
Actions of intense, prolonged and repeated effort to accomplish something that is difficult
Work single minded towards goal, with determination to win
Achievement motivation goes hand in hand with ambition and competitive
The need to personally solve problems/ achieve goals
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