The difference between an entrepreneur and a manager

Strategic Orientation. In terms of strategic orientation, the entrepreneur is oriented toward a search of new opportu­nities (ideas). This orientation is most important when the output falls due to rapid changes in technology, consumer demand, social values or political rules. When the use of plan­ning systems which control current resources is the strategic orientation, there is more pressure for the administration (man­ager). This is a peculiar feature for many businesses.

Commitment to Opportunity is the second key business point of difference. The two domains vary greatly in terms of the length of this commitment. Entrepreneurs have a short time span in terms of commitment to opportunity. They have to act and make decisions very quickly. They may have no advisers. They should be able to assume risk. Managers, on the contrary, are slow to act on an opportunity. When action is taken, the commitment is for a long time span, perhaps too long in some cases.

Commitment to Resources. An entrepreneur, as a rule, in­troduces resources at periodic intervals, often based on certain tasks or objectives that are supposed to be reached. These re­sources, often acquired from others, are usually difficult to obtain from lenders or investors. Therefore, the entrepreneur often achieves significant results with very few resources. This allows the resource providers to have as small a level of risk as possible at each stage of business development. While funding for managers may also be in stages, the commitment to die total amount of resources needed is in the administrative do­main. Managers have to effectively use the resources in order to receive as many rewards as possible (bonuses to salary).

Control of Resources differs in the same way. Since the manager's salary depends on effective resource control, he often takes interest in owning or accumulating as many re­sources as possible. The pressures of power, status, and fi­nancial rewards cause the administrator to avoid rental or other periodic use of the resources. The opposite is true for the entrepreneur who, under the pressures of limited resources (funding), risk of obsolescence, need for flexibility, and the risks involved, strives to rent or achieve periodic use of the resources only when they are badly needed.

Organization Structure. In the administrative domain, the organization structure is formalized due to the need for clear­ly defined lines of authority and responsibility based on man­agement theory and the reward system. The entrepreneur, true to his or her independence, employs a flat organization struc­ture based on informal personal contacts.

Ответьте на вопросы:

1. Why do you think that some successful entrepreneurs have had difficulty in managing their companies beyond the start­up stage?

2. How could entrepreneurial education help this problem?