ECONOMIC ANALYSIS EXERCISE 1: What do you think is the difference between management skills and entrepreneurship?.

How do they contribute to the economic success of a business? Management skills is about making an existing business work effectively and efficiently, organizing and coordinating the activities according to certain policies and achieving clearly defined objectives (i.e. vision, mission). Usually, the foundation of the business has been laid and established. It involves planning, controlling, leading and directing and the managers are usually focused on managing and growing the business Entrepreneurship is someone who transforms innovation into a business process especially for market which never exists, often associated with uncertainties. An entrepreneur will look for changes, respond to it and seize it as an opportunity. The next step is to assemble a team, locate resources, raise the needed capital and start the new business idea. An entrepreneur is flexible in adapting to the rapid changing to the market conditions and ideas which are important factors in developing strategies for a companys growth. The economy has become more competitive and more demanding, thus the pressure of having the best management skills and entrepreneurship skills are becoming more important. Management skills will ensure that an established organization is managed effectively and efficiently towards achieving clearly defined objectives. And the entrepreneurship will explore new opportunities. The manager is supposed to develop the drive and opportunism of the entrepreneur. The entrepreneur should learn the methodical disciplines of a Manager. Table: Differences between management Management skills Comes in after the business is established More concerned with the effective and efficient operation of an ongoing business Business management specialist, focused on managing and growing a business skills and entrepreneurship (others) Entrepreneurship Start the business More concerned with the launching and sustainability of a business in the face of uncertainty Generalist. Know a little about everything (product development and design, business law, accounting, communication and public speaking, investing, leadership, business systems, finance and insurance, marketing and sales, raising capital etc) Learn everything by trial and error Owns the business Reward: Capital gains, asset acquisition, cash flow, dividends and excessive cash

An employee Reward: Salaries, pay offs, promotion, job title, bonus and incentives