LITERATURE REVIEW

Submitted to
Jiwaji University, Gwalior

DOCTOR OF PHILOSOPHY
In
MANAGEMENT
Under the Faculty of Management

Supervisor
Dr. Swarna Parmar
Assistant Professor
SOS in Management, Jiwaji University
Gwalior (M.P.)

Submitted by
Anurag Chourasiya
Research Scholar

Purpose of the Study

We always say that our country is developing and growing but it is true or not, prime
minister Narendra Modi Ji is saying make in India and Ex prime minister Shri Atal Bihari
Bajpai said shining India. But one question arises how it is possible then one word comes in the
mind which is changed the countries or world that is Entrepreneurship and the word
entrepreneur bring to our minds image of business tycoons like Tata or L N Mittal. How are they
different from others? The only answer is their entrepreneurship.
The study of entrepreneurship is essential not only to solve the problem of industrial
development but also to solve the problems of unemployment, unbalanced areas development,
concentration of economic power and diversion of profits from traditional avenues of
investment. In this backdrop, the present study attempts to get insights to review, in brief, the
evolution of the concept of entrepreneurship, the definition of small scale enterprises and also to
study the small scale entrepreneurship and main purpose of the study is to identify the
problems facing by the entrepreneurs, investigate the how to solve it and justify the
statement of make in India.

Review of Literature

BACKGROUND HISTORY
The word entrepreneur is derived from the French verb entreprendre, means to
undertake. The word entrepreneur has been in use since the sixteenth century. Kilby has linked
the entrepreneur with a rather large and very important animal called Heffalump hunted by
many individuals and have variously described him, but wide disagreements still exist among
them on his particularities (Peter Kilbly, 1971). The French men who organized and led military
expeditions were referred to as entrepreneurs (Peterson, 1962). Around 1700 A.D., the term
was used for architects and contractors of public works. Quesnay regarded the rich farmer as an
entrepreneur who manages and makes his business profitable by his intelligence, skill and
wealth (Desai, 1991). In the 18th century, the old Oxford Dictionary of 1897 defined
entrepreneur simply as the director or manager of public musical institution, i.e., one who gets
up entertainments, especially musical performance (Tandon, 1975). The dictionary in its
supplement of 1933 modified its definition and recognized that the word has a place in business;
it defines entrepreneur as one who undertakes an enterprise (Tandon, 1975), especially a
contractor acting as an intermediary between capital and labour. Undertaking an enterprise is
entrepreneurship, and one who undertakes it is one who combines capital and labour for the
purpose of production is an entrepreneur.
First used in 1723, today the term entrepreneur implies qualities of leadership, initiative
and innovation in business. Economist Robert Reich has called team-building, leadership, and
management ability essential qualities for the entrepreneur.
An entrepreneur is a factor in microeconomics, and the study of entrepreneurship reaches
back to the work in the late 17th and early 18th centuries of Richard Cantillon and Adam Smith,
which was foundational to classical economics.
In the 20th century, entrepreneurship was studied by Joseph Schumpeter in the 1930s and
other Austrian economists such as Carl Menger, Ludwig von Mises and Friedrich von Hayek.
The term "entrepreneurship" was coined around the 1920s, while the loan from French of the
word entrepreneur dates to the 1850s.
Initially, economists made the first attempt to study the entrepreneurship concept in
depth Richard Cantillon (1680-1734) considered the entrepreneur to be a risk taker who

deliberately allocates resources to exploit opportunities in order to maximize the financial

return. Cantillon emphasized the willingness of the entrepreneur to assume risk and to deal with
uncertainty. Thus, he draws attention to the function of the entrepreneur, and distinguishes
clearly between the function of the entrepreneur and the owner who provides the money. Alfred
Marshall viewed the entrepreneur as a multi-tasking capitalist. He observed that in the
equilibrium of a completely competitive market, there was no spot for entrepreneurs as an
economic activity creator.

INTRODUCTION
Entrepreneurship can be viewed as a creative and innovative response to the environment and an
ability to recognize, initiate and utilize an economic opportunity. An entrepreneur is an innovator
who introduces something new in an economy. Entrepreneurship is doing things that are
generally not done in the ordinary course of business. Innovation may be in; introducing a new
manufacturing process that has not yet been tested and commercially exploited, introduction of a
new product with which the customers are not familiar or introducing a new quality in an
existing product, locating a new source of raw material or semi finished product that was not
exploited earlier, opening a new market, till now unexploited, where the company products were
not sold earlier, developing a new combination of means of production. Innovation involves
problem solving and an entrepreneur is a problem solver. An entrepreneur does things in a new
and a better way. A traditional businessman working in a routine manner is not entrepreneurial.
Innovation leads to the dynamics that governs the interaction between science, industry, and
society. Innovative organization wants must have to prepare for renewing the offerings and its
delivery process to its stakeholders to survive in todays globalised world. The study will also
include examples of innovative entrepreneurs and how the innovation in products/services helps
the business in survival and growth in present globalised market place.
Need for Entrepreneurship
Entrepreneur Traits
Successful Entrepreneur
The Differential Impacts of Necessity and Opportunity Entrepreneurship:
We are now in a position to at least give a tentative answer to our question, How is
entrepreneurship good for economic development? The answer depends clearly on what one
means by entrepreneurship. If one means self-employment, either in agriculture or very smallscale industry, then in most cases entrepreneurship will not lead to economic development
because there is no mechanism to link the activity to development. In fact, we know that selfemployment declines as economies become more developed. It is only when economies are able
to remove people from self-employment that we start to see an increase in development. As more
and more of the population becomes involved in opportunity entrepreneurship and as more and

more people leave necessity entrepreneurship (self employment), the more we see rising levels of
economic development.
Traditional analyses of economic development tend to focus on large corporations and
neglect the innovations and competition that small start-ups contribute to the overall economy.
For large corporations, the ability to affect national economic growth is influenced by general
business conditions, specific to each country. These corporations influence economic growth
primarily through the construction of new plants, which in turn creates job opportunities. In
addition, when an old plant is replaced, new technologies are applied in the new plant, resulting
in increased productivity. The new plants that positively affect the national economy in this way
can be built by domestic firms or by multinational enterprises. For potential entrepreneurs, the
decision whether to start a business is influenced by additional characteristics within the existing
business environment. These are referred to as Entrepreneurial Framework Conditions. The
conditions comprise a countrys capacity to encourage start-ups, combined with the skills and
motivations of those who wish to go into business for themselves. Together, these two conditions
affect the economics of the entrepreneurial process. When successfully combined, these
conditions will lead to offshoot businesses, which in turn will increase innovation and
competition within the market place. The end result is a positive influence on national economic
growth. Taking into account the different economic environments that affect these two groups of
players in the business world, we focus on the complementary nature of the mechanisms among
large and small firms. By defining these mechanics, we link the nations economic growth to the
interplay of entrepreneurship and existing businesses. This opens the door to a clearer
understanding of why entrepreneurship is vital to the larger economy.
The relationship between entrepreneurship, corporations, and economic development is
complex. By applying this model to a nations economy, important conclusions can be drawn. A
nations economic development depends on successful entrepreneurship combined with the force
of established corporations. However, the beneficial value of this mechanism varies with the
national income, as measured by GDP per capita. At low levels of national income, selfemployment provides job opportunities and scope for the creation of markets. As GDP per capita
income increases, the emergence of new technologies and economies of scale allows larger and

established firms to satisfy the increasing demand of growing markets and to increase their
relative role in the economy.

REVIEW OF LITERATURE
Zahar & Pearce (1990) stated that the choice of structure and process will influence and
constrain future strategic decisions.
Miltenburg (1995) expanded upon this approach by comparing how layout, material flow,
product volume and variety affected cost, quality, and flexibility in different high-level system
designs (job shop, equipment paced line, etc).
Malga Weker (1997) found the lack of infrastructure as a general problem. The industrial estate
alone cannot overcome the vocational disadvantages. The infrastructure facilities are either very
weak or nonexistent in rural areas. In urban areas with necessary industrial climate and
infrastructure facilities, the growth of industries is relatively faster. The scarcity of indigenous
raw materials has been a serious bottleneck. Scarce raw materials supplied through quotas are
not sufficient to meet the demands of the units. There is a delay in the disbursement of the loans
due to the existence of procedural delays and instances of tangible securities.
Behari Bepin (1997) examined the problems, possibilities and perspectives of rural
industrialization and discussed the crises in Indian villages and the need for the new strategy of
rural industrialization and the provision of fuller employment in rural and small scale industries
and technologies. He traced out agricultural development encouragement to village and small
scale industries and general awareness for incorporating appropriate technologies as principal
sources of impetus to the programme of technological transformation in rural India. Further he
reviewed various measures undertaken by the Government towards rural industrialization, local
industrial growth, and agro-based industries, and mini-rural cement plants, utilization of annual
waste and harnessing of natural power.
Minochabin A.C. (1997) suggested that the strategy of employment oriented industrialization
should aim at the development of SSI in rural areas.

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