Managers and entrepreneurs

University Degree Business and Administrative studies

Introduction

Are you a manager or an entrepreneur? Although you may hear these two terms thrown out interchangeably, they are in fact two very different complete with different personalities and worldviews.

Nowadays, some people think: “The Entrepreneur is just another manager- albeit a very effective one.” On my point of view, I am not totally agreed with it. I think entrepreneurs are more than managers.

Sometimes we said that an entrepreneur is a manager. Specifically, he or she is someone who manages in an entrepreneurial way. More often than not they will be managing a specific entrepreneurial venture, either a new organization or an attempt to rejuvenate an existing one. The entrepreneurial venture represents a particular management challenge. The nature of the entrepreneurial venture characterizes and defines the management that is needed to successfully drive it forward. (WICKHAM. P, 1998)

A manager may have great skills at doing the business – selling, installing or serving customers. However, an entrepreneur doesn’t need those skills, and seldom uses them. Instead, he becomes great at building the business – building systems that make a smooth-running business machine. The smoothness motivates employees – even ordinary employees – to perform in extraordinary ways that excite and attract customers. (Allman Consulting & Training Network, 2002)

For example: Entrepreneurs have a talent and gift for the creation process, but it takes a manager to organize the details. On the other hand, entrepreneurs need to either develop their management skills or hire managers to run their companies. (LYNN.J, 1998)

Who are Entrepreneurs?

Anyone can be an entrepreneur, start a company. However, few of them can maintain it. How few? Generally, one out of every seven.(Only about 15% of businesses survive for ten years, by U.S. Dept. of Commerce statistics.)

Entrepreneurs are men and women who search for and exploit new business opportunities. Because such opportunities are untried, entrepreneurs must take risks. Successful entrepreneurs direct resources into ventures that turn out to satisfy consumers, generating benefits that exceed costs. (MACKINAC CENTER Network, 1999)

The entrepreneur is the individual or team that identifies the opportunity, gathers the necessary resources, creates and is ultimately responsible for the consequences of the organization. A person is an entrepreneur so long as they are engaged in entrepreneurial behaviors. As stated above, a person starts being an entrepreneur when they undertake to form a new venture and are no longer an entrepreneur when the process of organization building has resulted in managing a self-sustaining business. (CARTON.R, 2000)

Three features of an entrepreneur

1, A focus on change

Entrepreneurs are different from managers. Manager’s main interest is in maintaining the position quo by supporting the established organisation, protecting it and maintaining its market positions. This is not to depreciate a desire for equilibrium as an objective, it can be very important and is an essential ingredient in the effective running of a wide variety of organizations, but it is not about driving change. (BOLTON and THOMPSON, 2000)

2, A focus on opportunity

Entrepreneurs are in step of opportunity. They continually seek out the possibility of doing something differently and better. They innovate in order to create new value. Entrepreneurs are more interested in pursing opportunity than they are in conserving resources.

Entrepreneurs expose resources to risk but they also make them work by stretching them to their limit in order to offer a good return. This makes them distinct from managers in established business that all too often can find them more responsible for protecting ‘scarce’ resources than for using them to pursue the opportunities that are presented to their organizations.

(WICKHAM. P, 1998)

3, Organisation wide management

Entrepreneurs usually have far-sight. The entrepreneur manages with an eye to the entire organization, not just some aspect of it. They benchmark themselves against organizational objectives, not ...

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(WICKHAM. P, 1998)

3, Organisation wide management

Entrepreneurs usually have far-sight. The entrepreneur manages with an eye to the entire organization, not just some aspect of it. They benchmark themselves against organizational objectives, not just the objectives for some particular department. This is not to say that functional disciplines such as marketing, finance, operations management, etc. are unimportant. However, the entrepreneur sees these as functions, which play a part in the overall business, rather than as isolated activities. (BOLTON and THOMPSON, 2000)

Manager’s role

In baseball, the manager is the person in charge of the overall team and the strategy the team follows to play its game. (PREDPALL.D, 1994) In an organization, the manager coordinates the work of others and brings wisdom of order to unit by helping people to plan, schedule and organize. He or she is in charge of the team and the team's overall strategy.

An effective manager anticipates workflow problems and coordinates works so that the organizational structure is maintained. The manager's task is to make sure work activities are carried out according to their relative importance with a minimum amount of disagreement among individuals, work teams, or work units. Managers also protect continuity, minimize disruptions, complete paperwork, review and evaluate reports, prepare budgets, and coordinate plans and proposals. A manager should be dependable and reliable.

(UNIVERSITY OF NEBRASKA Network, 1998)

The manager plays a vital role in the development and completion of effective merchandising. This role will vary in its intricacy depending on the size of the organization.

Above all, the manager's role is to accomplish the company's marketing and exhibit objectives by coordinating and supporting the efforts of the team. Artistic creativity is an advantage but it is not necessary to the effectiveness of the manager. An understanding of merchandising principles, along with sound communication and organizational skills, is more important to the manager's role.(Certificate in Retail Management Network, 2002)

Comparison

The appraiser as Entrepreneur

As an entrepreneur, you face a difficult challenge: how to build a business in which you've invested great personal resources, while keeping the enterprise from engulfing the rest of your life. It can be difficult to keep a healthy viewpoint.

The Entrepreneur is the dreamer, the thinker. The Entrepreneur loves change. The Entrepreneur lives in the future. The entrepreneur makes us start our businesses, and keeps us going when business is down. Appraisers who make it through the unavoidable boom and bust cycles of the appraisal business have a strong entrepreneurial side.

We recognize entrepreneurs, first and primary, by what they actually do by the tasks they undertake. This aspect provides a starting point for understanding the entrepreneur and the way in which they are different from other types of manager. A number of tasks have been associated with entrepreneur, such as: Owning organizations; founding new organizations; bringing innovations to market and identification of market opportunity. (WICKHAM. P, 1998)

The appraiser as Manager

To be an effective manager, you need to provide the tools and situations necessary for your staff to do work. Your job is to make the workplace efficient - but first, you yourself as a manager must be efficient.

Entrepreneurial side usually conflicts with manager side. The Entrepreneur wants to change. Nevertheless the Manager wants to keep everything in order and doesn't like to change.

The Entrepreneur lives in the future. However the manager lives in the past. But without the manager, the entrepreneur would have a chaotic business, constantly changing, with no systems in place to handle appraisal orders, track appraisal progress, make sure the copier doesn't run out of toner at a very critical time, etc. (GERBER. M, 1995)

In short, the Entrepreneur sees opportunity in the changes in the appraisal market. The Manager sees problems. Without both personalities, a business cannot be successful.

Manager VS. Entrepreneur

Entrepreneurs are leaders and the heart of a business. The basic leadership on them means stirring a group to come together for a common goal. Entrepreneurs motivate, console and work with people to keep them bonded and eager to move forward. That means setting a direction, communicating it to everyone who will listen and keeping people psyched when times get tough.

Managers are the brains of a business. They establish systems, create rules and operating procedures, and put into place incentive programs.

Most business executives and owners have a mix of management and leadership skills. Both skill sets are necessary to run a successful business (unless it's a very small business with people who naturally mesh very well). Leadership skills provide the direction, while management skills provide the systems that let a company grow with success. (FENTON. J, 1990)

As an entrepreneur, your job is to bring people back to the company direction gently and consistently and always challenge them to evaluate ideas and decisions with respect to the decision. (ROBBINS.S, 2002)

Differences:

There are some different personality styles between managers and entrepreneurs, such as, the attitudes each have toward goals, their basic conceptions of what work entails, their relationships with others, and so on.

1, Personality styles

Managers - accentuate rationality and control; are problem-solvers (focusing on goals, resources, organization structures, or people); often ask question, "What problems have to be solved, and what are the best ways to achieve results so that people will continue to contribute to this organization?” are persistent, tough-minded, hard working, intelligent, analytical, tolerant and have goodwill toward others.

Entrepreneurs - are known as brilliant, but sometimes lonely; accomplish control of themselves before they try to control others; can imagine a purpose and generate value in work; are imaginative, passionate, non-conforming risk-takers.

2, Different attitudes toward goals

Managers - approve impersonal, almost passive, attitudes toward goals; decide upon goals based on necessity instead of wish and are therefore deeply tied to their organization's culture; tend to be reactive since they focus on current information.

Entrepreneurs - tend to be active since they imagine and promote their ideas instead of reacting to current situations; shape ideas instead of responding to them; have a personal direction toward goals; provide a vision that changes the way people think about what is desirable, possible, and necessary.

3, Conceptions of work

Managers - view work as an enabling process; establish strategies and makes decisions by combining people and ideas; continually coordinate and balance opposing views; are good at reaching compromises and mediating conflicts between opposing values and views; act to limit choice; tolerate practical, mundane work because of strong survival instinct which makes them risk-averse.

Entrepreneurs - develop new approaches to long-standing problems and open issues to new options; first, use their vision to stimulate people and only then develop choices which give those images substance; focus people on shared ideals and raise their expectations; work from high-risk positions because of strong dislike of ordinary work.

4, Relations with others

Managers - prefer working with others; report that lonely activity makes them anxious; are collaborative; maintain a low level of emotional involvement in relationships; try to reconcile differences, seek compromises, and establish a balance of power; relate to people according to the role they play in a sequence of events or in a decision-making process; focus on how things get done; maintain controlled, rational, and equitable structures; may be viewed by others as unfathomable, isolated, and manipulative.

Entrepreneurs - maintain inside perceptiveness that they can use in their relationships with others; relate to people in intuitive, empathetic way; focus on what events and decisions mean to participants; attract strong feelings of identity and difference or of love and hate; create systems where human relations may be chaotic, strong, and at times even disorganized.

5, Differences In Perspectives

Managers think incrementally, whilst entrepreneurs think fundamentally. "Managers do things right, while leaders do the right thing." (PASCALE.R, 1990). This means that managers do things by the book and follow company policy, while entrepreneurs follow their own feeling, which may in turn be of more benefit to the company. An entrepreneur is more emotional than a manager.

6, Manager follows entrepreneur’s choice

An entrepreneur is someone who people naturally follow through their own choice, whereas a manager must be obeyed. A manager may only have obtained his position of authority through time and loyalty given to the company, not as a result of his leadership qualities. An entrepreneur may have no organizational skills, but his vision unites people behind him.

(BOLTON and THOMPSON, 2000)

In conclusion, managing and entrepreneur are two different ways of organising people. The manager uses a formal, rational method whilst the entrepreneur uses passion and stirs emotions.

Conclusion

As you can see, managers and entrepreneurs are very different. It is important to remember that there are definite strengths and weaknesses of both types of individuals. Managers are very good at maintaining the status quo and adding stability and order to our culture. However, they may not be as good at instigating change and imaging the future. On the other hand, entrepreneurs are very good at stirring people's emotions, raising their prospect, and taking them in new directions.

The development of effective leadership and management skills is critical to the success of any entrepreneur. Successful entrepreneurs understand leadership, management and the distinctions between the two. They also know how to motivate and empower people and teams effectively. Leading and Managing People provide participants with the skills they need to lead and manage effectively in order to power themselves and their organizations to their greatest potential.

(COLUMBIA BUSINESS SCHOOL Network, 2003)

In short, there is no hard and fast distinction between the entrepreneur and other types of managers. This does not make the entrepreneur any less special, nor does it make what entrepreneurs do any less important. What it does do is open up the possibility of entrepreneurship. In being ‘just’ a style of management it is something that can be learnt. Managers can chose to be entrepreneurial.

(WICKHAM. P, 1998)

In conclusion, we can say that entrepreneurial management is characterized by its whole organization extent, its objective of creating change and a focus on exploiting opportunity. The entrepreneur is as a manager undertaking particular tasks. Entrepreneurs are more than managers.

References:

WICKHAM. P. (1998) Strategic Entrepreneurship. London: Pitman

BOLTON and THOMPSON (2000) Entrepreneurs-Talent, Temperament, Technique. Butterworth-Heinemann

Do You Have the Right Stuff to be an Entrepreneur, Allman Consulting & Training <> (accessed 1 April, 2003)

LYNN.J. (1998) Mixed Blessing, Entrepreneur.Com <>

(accessed 2 April.2003)

Executive Summary, MACKINAC CENTER <>

(accessed 1 April, 2003)

CARTON.R. (2000) Operational Definitions of their Role in Society The Entrepreneur and Entrepreneurship, July 2000

UNIVERSITY OF NEBRASKA, Cooperative Extension <>

(accessed 1 April. 2003)

Certificate in Retail Management, The Role of the Manager <>

(accessed 2 April. 2003)

GERBER. M. (1995) The E-Myth, Revisited, Why Most Small Businesses Don't Work and What to Do About It, 1995

ROBBINS.S (2002) The Difference Between Managing and Leading Running Small Business, November 18, 2002

COLUMBIA BUSINESS SCHOOL, Leading and Managing People <> (accessed 2 April. 2003)

PASCALE. R. (1990) Managing on the Edge, Penguin Book, pp 65, 1990

PEDLER BURGOYNE and BOYDELL (1994) A manager’s guide to self-development.

London: McGraw-Hill

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FENTON. J. (1990) 101 Ways to Boost Your Business Performance, Mandarin Business, pp 114, 1990