Questions and Answers
What does 'entreprendre' mean in French?
to do something or to undertake
What is entrepreneurship?
the science of converting processed ideas into a business venture
Which of the following is NOT a role of entrepreneurship in economic growth?
An entrepreneur is primarily focused on maximizing profits from existing business ideas.
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What is the biggest reward of becoming an entrepreneur?
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Who defined entrepreneurship as an activity that involves discovering and exploiting opportunities?
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According to Howard Stevenson, what does entrepreneurship entail?
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What is the essence of entrepreneurial activity according to W. Gibb Dyer, Jr.?
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What does Joseph Schumpeter mean by 'creative destruction'?
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Match the following definitions of entrepreneurship with their respective theorists:
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What characteristic is associated with Israel Kirzner's view of entrepreneurship?
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How does E.E. Hagen define the entrepreneur?
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Study Notes
Understanding Entrepreneurship
- Originates from the French word “entreprendre,” meaning “to do something” or “to undertake.”
- Defined as the science of converting processed ideas into successful business ventures.
- Involves starting, managing, and operating a business.
Importance of Entrepreneurship
- Drives economic growth of a country by creating:
- Job opportunities
- Innovative products and technologies
- Industrial linkages
- Enhances foreign exchange rates.
- Supplies goods and services that meet customer demands and preferences.
Distinction Between Businessman and Entrepreneur
- Businessman: Operates or starts businesses based on existing ideas for profit maximization.
- Entrepreneur: Focuses on innovative ventures with a goal of creating change and solving new problems.
- Entrepreneurs are characterized as highly creative, risk-taking individuals who embrace uncertainty.
Definitions from Key Thinkers
- Scott Shane: Entrepreneurship involves discovering, evaluating, and exploiting new opportunities for goods, services, and processes.
- Howard Stevenson: Emphasizes the pursuit of opportunity regardless of current resource limitations.
- W. Gibb Dyer, Jr.: Entrepreneurship is fundamentally about founding new businesses.
Historical Perspectives
- Richard Cantillon: Entrepreneurs are specialists in risk-taking, securing labor for resale.
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Frank Knight: Defines entrepreneurs’ two main roles:
- Directing and managing others’ work.
- Protecting income for productive service providers against uncertainty.
- Differentiates between risk (insurable) and uncertainty (non-insurable).
Creative Destruction and Market Change
- Joseph Schumpeter: Entrepreneurs drive market changes through innovation ("creative destruction") and implementing new combinations of resources.
- Highlights that entrepreneurship isn’t solely about inventing but achieving results through action.
Entrepreneurial Awareness
- Israel Kirzner: Views the entrepreneur as an arbitrageur who identifies unknown market opportunities; emphasizes “entrepreneurial alertness.”
- E.E. Hagen: Describes entrepreneurs as economic agents focused on maximizing profits through innovation.
Philosophical Thoughts
- Galbraith: Suggests poverty results from a preference for such a state, indicating the need for entrepreneurs to rise to challenges and strive for achievement.
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Description
This quiz explores the concept of entrepreneurship, its importance in economic growth, and the roles of entrepreneurs in creating business ventures. Test your understanding of key principles and definitions related to entrepreneurship.
