As mentioned earlier, economists sometimes identify a forth factor of production — enterprise. It is held that, left to themselves, land, labour, and capital will not produce anything. There must be some person or persons, who will organize these three factors so that production take place. Someone must take the decisions (a) what to produce (i.e. the type of good or service and the quantity), (b) how to produce (i.e. the methods of production); (c) where to produce (i.e. the location of the enterprise).
Whoever takes the decisions, and the consequent risks, is known as the enterpreneur. There is no really suitable English word to describe such a person, perhaps 'enterpriser' is the nearest we can get. The entrepreneur is the person who undertakes production with a view to profit. In a capitalist society, production would not take place unless someone was prepared to buy and organize economic resources for production on the basis of expected profit.
Organisation, management and risk-bearing — these are the entrepreneurial functions. In the one-person business, they are clearly all carried out by the sole proprietor. In the large company, the functions of the entrepreneur are shared, risk bearing is the role of the shareholders; management is the function of the directors.
