BUSINESS ADMINISTRATION
ENTREPRENEURIAL DEVELOPMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Development of a new product
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Take-over of a competitor
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Issuing shares
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Development of an organization
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Detailed explanation-1: -Development of new product by an entrepreneur are most likely to contribute to creative destruction .
Detailed explanation-2: -Entrepreneurs’ Innovations as the Source of Creative Destruction. In his Theory of Economic Development (1961 [1934]), Schumpeter maintains that the creative destruction process is mainly due to entrepreneurs’ innovations that create an endogenous motion which revolutionizes the economic structure.
Detailed explanation-3: -What causes creative destruction? Creative destruction is the process by which capitalist enterprise creates a continuously changing economy. The closing of old industries and businesses that are no longer profitable allows the resources to be used for more productive activities.
Detailed explanation-4: -Examples of creative destruction in history include Henry Ford’s assembly line and how it revolutionized the automobile manufacturing industry. However, it also displaced older markets and forced many laborers out of work.
Detailed explanation-5: -Schumpeter viewed entrepreneurship as a force of “creative destruction". The entrepreneur carries out “new combinations", thereby helping render old industries obsolete. Established ways of doing business are destroyed by the creation of new and better ways to do them.