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Differentiating Entrepreneurs from Small Business Owners: A Conceptualization

James W. Carland, Frank Hoy, William Boulton, Jo Ann Carland

Abstract The literature of small business and entrepreneurship is explored. It is established that, although there is an overlap between entrepreneurial firms and small business firms, they are different entities. Using the 1934 work of Schumpeter and recognizing the additions to the field of current writers, a conceptual framework is established for the differentiation of entrepreneurs from small business owners. This paper explores the view that entrepreneur is distinct from the business owner and managers in a sense that entrepreneurs carryout the combination of means of production. It concerns with on what basis entrepneurs may be separated from non entrepreneurial managers in order for the phenomena of entrepreneurship to be suited and understood. This article presents the two basis on which way in which the entrepreneur is different from small business and entrepreneurial venture. It also mentions that small firms are treated as a separate sector as there are limited resources limited compared with the resources of larger corporate organizations. Similarly as there exist a overlap between entrepreneurship and small business sector it focuses on the notion that a person who owns an enterprise is not necessarily an entrepreneur. Many researchers found risk taking as an entrepreneurial characteristics and prime factor which differentiates from non entrepreneur where as some found no any statistical difference in the risk taking propensity and a group of managers. Various normative and empirical studies has been incorporated to distinguish the characteristics and identifies innovation as a distinguish features from the societal perspective. Martin (1982) also points that entrepreneurial activities not only have a innovation via creating ideas rather also focuses in the exploiting the values of ideas. Here author also portraitists various characteristics from normative and empirical dimensions in order to sketch the profile of them. Those indicated in the article about the characteristics are generally derived from the normative approach describes the author personal impression or conclusion.

Article Review Ganesh Shrestha 3rd sem, SOMTU MBA 2012 FALL Batch

Differentiating Entrepreneurs from Small Business Owners: A Conceptualization


James W. Carland, Frank Hoy, William Boulton, Jo Ann Carland

Successful entrepreneur is defined as those whose enterprise have operated and survived at least for two years. Regarding the entrepreneurial venture it should go beyond the corporate life cycle and stages identifying the strategic behavior, introducing the new goods, methods, new market, new sources and reorganization. It is distinguished from the family business in the sense of strategic practices. The way it is differentiated is the innovation where it is characterized by a preference for creating activity, manifested by some innovative combinations of resources for profit. Risk taking propensity, need for achievement, locus of control, dependence, need for power are the certain traits required for entrepreneur. Whereas some argues that risk taking propensity cant be used as a distinguishing feature of entrepreneurship as it is believed to be inherent. The importance of the entrepreneur in the economy and GDP is also discussed for the economic development and new job creation. In the literature there are many studies of people including entrepreneurs using traits as a basis of the theoretical or conceptual framework.The argument is that people with certain traits will be more incline to become entrepreneurs who are job creators. Other person without strong entrepreneurial traits should earn salary and be employed by others. There are strengths and weaknesses in traits approach. However even negative findings will contribute to the knowledge. However, there is no any consideration of the age, sex, marital status as it has been assumed that they cant alter these variables. There still remains a doubt to incorporate risk taking propensity as an distinguished feature rather more broadly focused on the societal perspective. There remains a dilemma whether the characteristics listed can demonstrate the capability of entrepreneur to function in the market. This paper also insist on following the strategic management practices but leaves the reader in dilemma where and under what conditions the management practices to be followed which distinguishes entrepreneur from non entrepreneur managers.

Article Review Ganesh Shrestha 3rd sem, SOMTU MBA 2012 FALL Batch