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Difference Between Entrepreneur and Manager

Very often entrepreneur and manager are used as interchangeable terms. For instance, Kao’s model of entrepreneurship does not treat the manager and the entrepreneurs as distinct species within the business world.

According to the model, people may behave in a managerial or entrepreneurial style depending upon the demands of the task, the characteristics of the environment, and their own personal predispositions. Strictly speaking, however, an entrepreneur is different from a manager. The main points of difference between entrepreneur and manager are as follows:

1. Innovation
2. Risk-Taking
3. Reward
4. Skills
5. Status
6. Response to Authority

Innovation

The entrepreneur does not live with the status quo. He works to change in accordance with his or her personal vision and values. He is more than an inventor. An inventor only originates the invention. However, the entrepreneur goes much further by exploiting the invention commercially or by applying the invention. On the other hand, the manager keeps running a business on established lines.

He is neither an inventor nor an innovator. An entrepreneur changes the combinations of the factors and thereby increases productivity and profit. But a manager only deals with the day-to-day affairs of a going concern. An entrepreneur is not a mere executive though he may also be appointed as one for the promotion of his company.

Risk-Taking

An entrepreneur takes calculated risks. He is not a gambler but he faces uncertainty and the security of others. By contrast, the manager is less tolerant of uncertainty. He does not face the uncertainty of a new venture with its potential for failure and financial loss. He does not share in business risks.

Reward

An entrepreneur is motivated by profits while the manager is motivated by externally imposed goals and rewards. The gains of an entrepreneur are uncertain and irregular and can at times be negative. The salary of a manager is, on the contrary, fixed and regular and can never be negative.

Skills

The roles of entrepreneur and manager demand different types of personal skills. An entrepreneur needs intuition, creative thinking, and innovative ability among other skills. On the other hand, a manager depends more on human relations and conceptual abilities.

Status

An entrepreneur is self-employed and he is his own boss. On the contrary, a manager is a salaried person and he is not independent of his employer, the entrepreneur.

Response to Authority

One of the main features that distinguish managers from entrepreneurs is their ability to identify in a positive constructive way with authority figures using them as role models. This type of behavior is largely absent in entrepreneurs.

Case histories of many entrepreneurs suggest that it was their inability to submit to authority and accept organizational roles that drove them to become entrepreneurs. In a sense, they were ‘misfits’ who had to enact their own environment.

Management involves combining or co-ordinating resources to produce whereas entrepreneurship involves combining to initiate changes in production. Management is an ongoing or continuous process while entrepreneurship is a discontinuous phenomenon. It appears that initiating changes is a discontinuous phenomenon. It appears to initiate changes in the production process and then disappears until it reappears to initiate another change.

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