My Paper on Interprenual School of Thought

Topics: Entrepreneurship, Factors of production, Joseph Schumpeter Pages: 9 (3043 words) Published: May 16, 2013
Entrepreneurship is a concept which is defined in many ways. The word entrepreneur means a person who undertakes from the French term called eneteprendre. In terms of business, the term entrepreneur means starting a business. An entrepreneur is a person who manages, organizes, and takes over all the enterprise or business risks. Other definitions include a person who has high ambition and aptitude to initiate change is known as an entrepreneur. The entrepreneurial school of thought is based on vision: a mental representation of strategy created or at least expressed in the head of the leader as perspective, specifically a sense of long term direction of organizations future and a sound vision and visionary CEO can help organization in turbulent times or in very difficult years for the organization also it have shortfalls that hanging on the health and whim of single person, the death or health problem of that person result in crisis of organization. and one of present day successful entrepreneur and its strategic moves in the direction of the school of thought is discussed. Historical background of the school

Throughout the theoretical history of entrepreneurship, scholars from multiple disciplines in the social sciences have grappled with a diverse set of interpretations and definitions to conceptualize this abstract idea. Over time, "some writers have identified entrepreneurship with the function of uncertainty-bearing, others with the coordination of productive resources, others with the introduction of innovation, and still others with the provision of capital" (Hoselitz, 1952). Even though certain themes continually resurface throughout the history of entrepreneurship theory, presently there is no single definition of entrepreneurship that is accepted by all economists or that is applicable in every economy.

Although there is only limited consensus about the defining characteristics of entrepreneurship, the concept is almost as old as the formal discipline of economics itself. The term "entrepreneur" was first introduced by the early 18th century French economist Richard Cantillon. In his writings, he formally defines the entrepreneur as the "agent who buys means of production at certain prices in order to combine them" into a new product (Schumpeter, 1951). Shortly thereafter, the French economist J.B. Say added to Cantillon's definition by including the idea that entrepreneurs had to be leaders. Say claims that an entrepreneur is one who brings other people together in order to build a single productive organism (Schumpeter, 1951).

Over the next century, British economists such as Adam Smith, David Ricardo, and John Stuart Mill briefly touched on the concept of entrepreneurship, though they referred to it under the broad English term of "business management." Whereas the writings of Smith and Ricardo suggest that they likely undervalued the importance of entrepreneurship, Mill goes out of his way to stress the significance of entrepreneurship for economic growth. In his writings, Mill claims that entrepreneurship requires "no ordinary skill," and he laments the fact that there is no good English equivalent word to encompass the specific meaning of the French term entrepreneur (Schumpeter, 1951).

The necessity of entrepreneurship for production was first formally recognized by Alfred Marshall in 1890. In his famous treatise Principles of Economics, Marshall asserts that there are four factors of production: land, labor, capital, and organization. Organization is the coordinating factor, which brings the other factors together, and Marshall believed that entrepreneurship is the driving element behind organization. By creatively organizing, entrepreneurs create new commodities or improve "the plan of producing an old commodity" (Marshall, 1994). In order to do this, Marshall believed that entrepreneurs must have a thorough understanding about their industries, and they must be natural...
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