12th Standard Commerce — Elements of Entrepreneurship Online Test
Chapter 23 of 12th Commerce explains the meaning and concept of entrepreneurship, the entrepreneur as risk bearer, organiser and innovator, ten characteristics of an entrepreneur and the importance of entrepreneurship. It compares entrepreneur, intrapreneur and manager, covers opportunities and challenges of women entrepreneurs, and lists promotional, managerial and commercial functions.
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About Elements of Entrepreneurship
Easy ~40 min study
Elements of Entrepreneurship is the first chapter of Unit 9, Entrepreneurship Development, in the Tamil Nadu State Board Class 12 Commerce book. It opens with entrepreneurship as a factor of production beside land, labour and capital, traces the word entrepreneur to the French language, and presents the three classic views of the entrepreneur: risk bearer, organiser and innovator.
The lesson then lists the characteristics of an entrepreneur and the ways entrepreneurship helps a nation, compares the entrepreneur with the intrapreneur and the manager, and devotes a long section to women entrepreneurs, their opportunities and their challenges. It closes with the promotional, managerial and commercial functions of an entrepreneur.
This page gathers the five book-back one mark questions with answers checked against the book's key and the lesson, plus additional questions on every section, each with a short explanation.
What you'll learn
- Explain the meaning and concept of entrepreneur and the three classic views of the entrepreneur.
- State Schumpeter's definition of entrepreneur.
- List the characteristics of an entrepreneur and the importance of entrepreneurship.
- Distinguish an entrepreneur from an intrapreneur and from a manager.
- Describe the opportunities and challenges of women entrepreneurs.
- Explain the promotional, managerial and commercial functions of an entrepreneur.
Before you start
- Factors of production: land, labour and capital.
- Forms of business organisation such as sole trader, partnership, company and co-operative.
- The functions of management from the earlier management lessons.
Topics covered in this chapter
Elements of Entrepreneurship explained
What this lesson covers
Meaning, concept and definition
The word entrepreneur comes from French; the Oxford Dictionary (1897) linked it to organising musical performances. Richard Cantillon saw the entrepreneur as a risk bearer, Jean Baptize as an organiser and Joseph A. Schumpeter (1934) as an innovator who carries out new combinations.
Characteristics and importance
- Characteristics: spirit of enterprise, self confidence, flexibility, innovation, resource mobilisation, hard work, leadership, foresight, analytical ability and decision making.
- Importance: innovation, contribution to GDP, balanced regional development, export promotion, full use of latent resources, less concentration of economic power and a better standard of living.
Entrepreneur, intrapreneur and manager
The intrapreneur is an inside entrepreneur who works within the firm, bears no risk and earns a salary. The manager renders service for a salary and needs conceptual and human relations skills.
Women entrepreneurs
The Government of India definition rests on 51 per cent of capital and 51 per cent of employment going to women. Opportunities come from business, finance, non-financial support, associations, Government schemes, training and CWEI; challenges include finance, mobility, education, network support, competition, sensitivity, information and dependent culture.
Entrepreneurial functions
- Promotional: discovery of idea to procurement of machines and materials.
- Managerial: planning, organising, directing, controlling and coordination.
- Commercial: production, marketing, accounting, finance and human resource management.
Common mistakes to avoid
- Calling an intrapreneur a risk bearer. The intrapreneur bears no risk and earns a salary, though he is accountable for the task.
- Listing marketing as a managerial function. Marketing is a commercial function.
- Treating discovery of idea as a managerial function. It is the first promotional function.
- Mixing up foresight and analytical ability. Foresight looks at future changes; analytical ability means objective, rational decisions.
- Forgetting the three extra marketing mix components for services: people, process and physical evidence.
Test yourself on these with the practice test, then check the worked reasoning in the solved MCQs.
Frequently asked questions
What is meant by entrepreneurship?
Entrepreneurship is the process of setting up one's own business venture, as distinct from employment or practising a profession. The person who establishes the business is the entrepreneur, and the output of the process is an enterprise.
How did Schumpeter define the entrepreneur?
J.A. Schumpeter said entrepreneurship is essentially a creative activity of doing things not generally done in the ordinary course of business. An entrepreneur is one who innovates, that is, carries out new combinations or enterprise.
Who is an intrapreneur?
An intrapreneur thinks and acts like an entrepreneur for the firm's development while employed in it. He is an inside entrepreneur who uses the firm's resources, bears no risk and is paid a salary and incentives.
How does the Government of India define a women entrepreneur?
It is an enterprise owned and controlled by a woman with a minimum financial interest of 51 per cent of the capital, giving at least 51 per cent of the employment generated in the enterprise to women.
What are the challenges faced by women entrepreneurs?
The lesson lists problem of finance, limited mobility, lack of education, lack of network support, stiff competition, sensitivity, lack of information and dependent culture.
What are the managerial functions of an entrepreneur?
They are planning, organising, directing, controlling and coordination. Marketing, accounting and finance belong to the commercial functions, and discovery of idea to the promotional functions.
Last updated 16 October 2026