Difference between a Manager and Entrepreneur

What is a manager?

Manager is an administrator of an established business or formulated project. Manager has the objective to maintain and grow the firm or finish a project within the expected time and obtain desirable results by using a set of resources to achieve this tasks.

Most of the time managers are chosen based on the years of experience within the company or if they are hired from outside of the company then years of experience in the same field. There are times managers are required to have an educational background in business administration, finance, marketing, human resources or production in order to meet requirements.

Additional characteristics of a manager and his/her responsibilities are as follows:

• Appointed to his/her position.
• Granted with specific authority of few or more employees.
• Have the access and control of resources.
• Assigned with accomplishment of targets of business defined by owner of firm.
• Answerable to his designates for the means and methods used to achieve targets.
• Promise of a predefined reward, that may be fixed, variable or both.

One of most important abilities of manager is strengthening the balance sheet of the firm. To do so, it is imperative to develop the following skills at work:

1. Proper exercise of power: Mobilizing co-workers to different teams. Decide who remains in his personal network to provide responsibilities, authority and goals.
2. Judgment: Choose broad strategies or short term objectives or adequate work force. Managers have to make an objective judgment. They are responsible for the consequences of their actions and it could be a risk or benefit to the firm.
3. Communication: Communication is not just broadcast of information and directives. Team members need to be receptive of the provided information. This communication can be explicit or implicit and direct or indirect.

What is an entrepreneur?

An entrepreneur is a person that finds an opportunity and creates a firm or a project. This process may involve many trial and error strategies. Entrepreneur looks for opportunities based on the need of the society.

The entrepreneur may not have initial education or knowledge in fields of his project. However, to increase the probability of success, universities have added programs such as business entrepreneurship.

Differences between a manager and entrepreneur

1. Rights to profits

Manager

Based on human capital theory, the productivity awarded to the firm should compensate employees based on their productivity. Each firm is different and they provide salary or commission to managers. This may not be based on their productivity.

Entrepreneur

The entrepreneur is the owner of the company and company’s profit. He/she has the choice to distribute the profit with who and when.

2. Availability of resources

Manager

Manager has the ability to distribute workforce and financial resources to appropriate projects in order to achieve directive board goals.

Entrepreneur

Will gain his resources through financial institutions or  start-up promotion organizations or own resources.

3. Property rights

Manager

Manager is an employee of the firm and he or she is employed as contract or permanent basis. Manager does not have  property rights, unless in some cases firms sign an agreement with the managers to provide shares. 

Entrepreneur

Since the entrepreneur is the one who started the firm or business, she or he will have the property rights.

4. Educational background

Manager

Manager should have an educational background or experience related to the field of work. He or she may be educated or have experience in finance, human resources, marketing, and production.

Entrepreneur

Entrepreneur may or may not have educational background in the field of work. The firm can be created by identifying the need in the society.

5. Incentives and opportunity costs

Manager

A person with high education or experience and have an ability to handle administrative part of the business. Firms may  provide incentives for the opportunity costs to managers to keep them in the company.

Entrepreneur

Entrepreneur may have the highest opportunity costs if the firm productivity is less.

Manager versus Entrepreneur

Summary:

• Manager is an employer and employee trained to achieve targets predefined by owners of the firm. She or he uses available resources within the company.
• Entrepreneur is a person who comes up with his or her own business idea and achieve goals based on his or her ability and expertise. He or she may use available resources or approach other financial institutions for resources.
• Manager should have the ability to properly exercise the given power within the company; use good judgment in decision making; take appropriate risks on behalf of the company; communicate effectively to motivate co-workers in his or her team.
• Crucial abilities of an entrepreneur are based in self-motivation. experience and ability to find successful opportunities.

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