Function, Terminologies and Theories

Daryl R. Tabogoc

Entrepreneurship

The process of creating something new with value by devoting the necessary time and effort, assuming the accompanying financial, psychic and social risks, and receiving the resulting rewards of monetary and personal satisfaction and independence.

The process of starting a business or other organization. The entrepreneur develops a business model, acquires the human and other required resources, and is fully responsible for its success or failure.

Function of an Entrepreneur

• To perform or revolutionize the pattern of reproduction by exploiting an invention or. More generally, an untried technological method of producing a new commodity or producing an old one in a new way, opening a new source of supply or materials or new outlet for products by organizing a new industry.

Terminologies of Entrepreneurship

Business Failure – A business that files bankruptcy and loses money for creditors, the people who lent them money, and their investors.

Capital – The buildings, equipment, tools, and other goods needed to produce a product, or the money used to purchase these items.

Competition – Striving for the same customer or market.

Demand – The amount or quantity of goods or services that consumers are willing and able to buy.

Discontinuance – A business that is operating under a new name or a business that has been purposely discontinued.

Terminologies of Entrepreneurship

Economics – The branch of social science that deals with the production and distribution and consumption of goods and services and their management.

Elastic – When a small change in price produces a large change in demand.

Enterprise Zones – Specially designated areas of a community that provide tax benefits to new businesses locating there and grants for new product development.

Entrepreneur – One who organizes, manages and assumes the risk of business or enterprise.

Entrepreneurial – The approach use by an entrepreneur.

Terminologies of Entrepreneurship

Enterprise – A unit of economic organization or activity specifically a business organization.

Free Enterprise System – An economic system in which people are free to operate their businesses as they see fit, with little government interference.

Inelastic – When a small change in price produces little or no effect on the quantity demanded.

Investment – The amount of money one puts into a business as capital.

Opportunity – An idea that has commercial value.

Terminologies of Entrepreneurship

Profit – Money that is left after all the expenses of running a business have been deducted from the income.

Scarcity – When wants are greater than resources.

Services – Intangible items that have monetary value and satisfy needs and wants.

Start-up Resources – Resources an entrepreneur needs to have when starting a business, including capital, skilled labor, management expertise, legal and financial advice, a facility, equipment, and most importantly, customers.

Venture – A business undertaking involving risk.

THEORIES OF ENTREPRENEURSHIP

Laissez Faire Theory – This theory explains that the government should interfere in economic activities.

Keynesian Theory – This theory contends that during economic depression the Government should put massive public works, like construction of roads and bridges. Ricardian Theory – This theory develop by David Ricardo, an English political economist born in 1772. It states that the key factor in economic growth is land, which means that agriculture plays a major role in economic development.

THEORIES OF ENTREPRENEURSHIP

Harrod-Domar Theory – Conceptualized by Harrod and Domar, it states that the key factor in economic growth is physical capital machines more products can be produces through the use of machines.

Innovation Theory – According to Joseph Schumpeter, the role of innovation or entrepreneur in economic Development has the courage and imagination to handle the system, and be able to transfer theory in to reality. Non-economic Theory – Their key factor are political stability, Efficient Public administration, open society, and positive cultural values.

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References:

http://en.wikipedia.org/wiki/Entrepreneurship

http://quizlet.com/9513798/entrepreneurship-key-terms-flash-cards/

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