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Difference Between Organisation And Enterprise

 Organisation, Difference between Organisation and Enterprise
Organisation

Meaning

            The entrepreneur is regarded as one of the most significant aspects of manufacture. An organiser brings all other three aspects of manufacture such as land, labour and capital. To gather these factors, to synchronize them in a proper ration, to oversee their work, to buy inputs and sell outputs etc. are the operations of an organiser.

Occasionally he invests capital by scrounging from others to earn profits and thus abides jeopardy of profit or loss. As per the economist Frank.H.Knight, “An entrepreneur is a person who performs the dual functions of risk taking and control.” Thus an entrepreneur is a man, who begins production by fetching in concert other aspects, synchronizes, oversees and controls them and abides jeopardy of profit or loss.

Difference Between Organisation and Enterprise

  1. The organiser begins manufacture of goods in expectation of compensation but is not obligatory that he may always get gain. Occasionally the organiser has to abide some defeat also. The work of embarking on jeopardy is termed as “Enterprise”.

  2. Before machines came into existence, manufacture was conceded on a small scale and in the cottage industries. There was no disparity amidst organisation and enterprise for the reason that the work of organising and risk taking was executed by the same person.

  3. But with the materialization of large scale industries the joint stock companies have detached the organisation and the enterprise. In JSC, investors are conscientious for profit and loss. Hence the enterprise is related to the investors.

  4. The actual work of organisation and administration is conceded by the paid managers or directors. Thus organisers and entrepreneurs are dissociate in modern productive system such as JSCs. Here the charge of organisation and administration and the task of risk abiding are embarked on by diverse persons.

  5. Whereas in small scale industries, the entrepreneurs himself is the organiser. In such a situation, where operations of organisation and enterprise are performed by the same man, there is no disparity amidst them.

Difference Between Capitalist and Entrepreneur

            Schumpeter treats the role of the capitalist and the entrepreneur as diverse kinds of works that are described below.

  1. A capitalist only invests his capital in the industry and receives interest on it, whereas the entrepreneur manages the investment and he is the boss of that investment.

  2. A capitalist holds capital, whilst as entrepreneur possesses particular skill and invests capital by borrowing it from the capitalists. Occasionally an entrepreneur empowers his own finance.

  3. The earnings of the capitalist are invariable which he receives as interest on capital empowered in varied industries. But the earnings of an entrepreneur is quite indecisive, he may get profits or incur losses.

  4. A capitalist runs no risk venture he has only advanced his capital as loan, whilst the entrepreneur alone shoulders the jeopardy of profit or loss.

  5. A person can be both a capitalist and an entrepreneur. But in modern venture, the two are separate.

Functions of the Entrepreneur

An entrepreneur possesses special ability in the modern mechanised and complex production system. He occupies a very important place in production. The entrepreneur performs specific functions which are described as under.

  1. To prepare plan – The primary function of an entrepreneur is to prepare the plan or scheme of production i.e. the scale of production, types of commodities to be made and its quantity.

  2. Selection of the site – The entrepreneur makes the choice of the site for the factory to be located. The location must be beside the market, railway station or bus stand. The selection of location can also be next to source of inputs. This has a vital comportment on the cost of manufacture.

  3. Provision of Capital – Capital is essential to erect a factory or an industry. It is necessary at all the phases of venture. It is not essential that the entrepreneur must empower his own capital. Hence, he has to trace out a capitalist to make stipulation for capital for the venture. He endeavours to attain capital at the least feasible rate of interest.

  4. Provision of Land – Next to the stipulation of capital, the stipulation of site has to be organized for land. Land is either hired or purchased.

  5. Provision of Labour – In recent times, diverse kinds of labour are essential to make one type of article. The entrepreneur has to stipulate for labour from various places.

  6. Purchase of Machines and Tools – It is the function of the entrepreneur to purchase machines and tools in order to begin and carry on manufacture.

  7. Provision of Raw materials – It is entrepreneur who makes provision for raw materials. He buys the best quality of raw materials at the minimum cost. He also knows the sources of input.

  8. Coordination of the factors of production – One of the main functions of the entrepreneur is to synchronize diverse aspects of manufacture in correct permutations so that the cost of production is reduced to minimum.

  9. Division of Labour – The splitting up of manufacture into diverse groups and delegating them to varied workers is also the role of an entrepreneur. Thus the entrepreneur decides the level and type of division of labour.

  10. Quality of Product – Keeping in sight the rivalry in the market, the entrepreneur has to decide on the eminence of his commodity. He is to decide whether the goods created must be of superior quality only or both of excellent and ordinary qualities.

  11. Sale of Commodities – The accordance of the entrepreneur is not only to produce articles but also to sell them. He employs a good number of salesmen to market the commodities. He makes arrangement for exposure to push up the sales. He espouses both informative and persuasive ways to achieve his goal.

  12. Advertisement – It is the responsibility of an entrepreneur to do publicity describing the superiority and excellence of his products though media. Advertisement is done to create and enhance the demand or sale of his products.

  13. Search for Markets – The entrepreneur has to explore markets for his commodities. He manufactures articles with regards to the customers’ likings which can be accessed from market trends.

  14. Supervision – One of the chief jobs of an entrepreneur is to oversee all the aspects engrossed in the manufacturing process. He has to oversee every small element so as to make sure optimum manufacture and economy.

  15. Contact with the State Law – The entrepreneur has to make contact with the state since the modern production system is governed by it in a number of ways. A license is taken prior to the commencement of business. The entrepreneur has to abide by specified rules and regulations of production and has to pay tax frequently.

  16. Payment to factors of production – The compensation of the various aspects of manufacture has to be judged by the entrepreneur. He makes payments to the landlord, labour and capitalist in the form of rent, wages, and interest. Since payments to these aspects of production comprise cost, so no entrepreneur needs to pay to a factor more than its productivity.

  17. Quantity of Production – The entrepreneur decides the quantity of manufacture keeping in view the demand for goods and the extent of market. How goods are to be formed is the main decision taken by the entrepreneur.

  18. Risk – Taking – Risk taking is the most significant function of an entrepreneur. He has to pay to all the other factors of production beforehand. There are probabilities that he may be rewarded with an attractive profit or he may undergo a serious loss. Hence the risk bearing is the last accountability of an entrepreneur.

  19. Innovation – Innovation plays a vital role in modern venture. The entrepreneur makes engagements for introducing innovations which help in mounting production on the one hand and reducing costs on the other hand. Innovations may take the form of introduction of new methods in the course of manufacture or introducing upgrading in the active methods. It also comprise innovation of new markets, raw materials and new markets, inputs and new method of production.

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