In my previous article, I have talked about the contributions of Richard Cantillon to Entrepreneurial Development. Now I want to look at some of the major contributions of Francis Walter to Entrepreneurial Development. Follow me as we are going to consider that together in this article.
In the late 19th century, Francis Walter also differentiated between those who supplied funds and received interest and those that provided management and receive profit.
This distinction was as a result of the increasing industrialization of the 19th century.
At the beginning of the 20th century, entrepreneurs were viewed mainly from an economic perspective.
The entrepreneur was regarded as an organiser who starts and operates an enterprise in expectation of reward of profit and equally bears the risk of making a loss.
The work of undertaking risk in expectation of profit is referred to as an ‘enterprise’ and the provision of capital is referred to as ‘financing’.
The famous economist John Stuart Mill in his 1948 Classic, ‘ The Principle Of Political Economy’ also popularised the ideas of the entrepreneur as an organiser who assumes the risk of a business in return for profit.
Before the industrial revolution in England, production was carried out on a small scale and usually in cottage industries.
There was no distinction between enterprise and management. With the invention of heavy machinery and the emergence of large industrial undertakings, joint-stock company ownership from control, that is, the separation of shareholders and directors.
Hence, a separation was made between enterprise and management.
The shareholders bear the risk and get the reward of ownership.
Enterprise relates to shareholders. In most organisations, the actual work of management is done by paid managers or appointed directors. The entrepreneur is not a paid manager: he or she performs the task of risk-taking and provides general leadership.
The directors perform the work of corporate management.
However, in small scale businesses, it is difficult to separate the functions of the entrepreneur and that of the organiser or manager. These functions are performed by the same person, the small business owner.
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