14GEE81 ENTREPRENEURSHIP

DEVELOPMENT

UNIT-II

S.Janarthanan
Assistant Professor( Sr.G)
Department of EIE
Kongu Engineering College
Perundurai,Erode-638060

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 14GEE81 ENTREPRENEURSHIP DEVELOPMENT

UNIT –II

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 UNIT – II

Entrepreneur: Definition, Entrepreneurial

Motivation, Characteristics of Entrepreneurs,
Distinction between an Entrepreneur and a
Manager.

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 What is Motivation?
Motivation is the set of forces that causes
people to engage in one behavior rather
than some alternative behavior
Motivation is the desire to achieve a
goal, combined with the energy to work
towards that goal

Motivation is the basic drive for all of

our actions and it directs our behavious

A motive is a need for specific

experiences

Motives are stimulated by the situation

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 Definition: Motivation
The term, "Motivation" has come
from the Latin word ‘movere’ the
meaning of the same is “to move”.
That means to move from present
situation to better situation.
Motivation is the willingness
to do something, and is
conditioned by this action’s
ability to satisfy some need
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for the individual.
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The characteristics of motivation are as
under :
 It has two parts
(a) to motivate self (b) to motivate others.
 The concept of motivation is based on
assumption that a behavior of a person is goal
oriented and it is directed to complete the task.
 The behavior varies from man to man.
 It is an internal condition
 It is an inspiring process to do work.
 It is goal oriented process.

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 Motivation Quotes

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 Maslow’s Need Hierarchy Theory

Self-
actualization
Esteem and
status
Social needs
needs
Safety needs
Physiological
needs

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 Maslow’s Need Hierarchy Theory
• Physiological needs • Social belonging
Homeostasis Friendships
Food Intimacy
Water Family
Sleep • Esteem - ego needs or status
Shelter needs
• Self-actualization
• Safety needs Self Statisfied
 Personal security Utilizing Abilities
Emotional security Utilizing Talents
Financial security Pursuing a goal
Health and well-being Seeking Happiness
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 Motivation Cycle or Process

Motives Goal Behaviour

• It prompt to action • Motives are
• Eg:
• Grow of Hair- Hair cut,
Need of food- Drives
Hunger,
• Need of water – drives
Thurst
• It is a series of
directed towards activities to be
goals. It create a undertaken
state of
• Human Behaviour:
physiological or
psychological • 1. Caused- Needs
• 2. Motivated- Drive
imbalance
• 3. Directed- Goal

TENSION REDUCTION
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 Entrepreneurial Motivation Factors
On research
Internal Factor External Factors
Study -1986
• Desire to do • Government Assistant 1. Ambitious factors
something factors 2. Compelling factors
• Become • Availability of labour 3. Facilitating factors
Independence and raw material
• Achieve what one • Encouragement from
wants to have in life big business houses
• Be recognized for • Promising demand for
one’s contribution the product
• One’s educational
background
• One’s occupational
background and
experience in the
relevant field

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 Entrepreneurial Motivation Factors
Internal Factors External Factors
 Educational Qualifications  Assistance from Govt.
 Occupational Experience  Assistance from financial
 Desire to work Institutions
independently in  Availability of
manufacturing line technology/raw-materials
 Desire to branch out to  Demand of a particular
manufacturing from present product
occupation.  Wanted to utilise excess
 Family background money
 To earn profits and to  financial help from
possesses wealth nongovernment sources.
 To engage family members  Encouragement from big
along with himself business houses
 To possess social prestige
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 Entrepreneurial Motivational Behaviors

Creativity – New IDEAs

Self- Efficacy - Ability,

Motivation and required
resources to complete the
task successfully

Locus of Control –Internal

and External Locus

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 Entrepreneurial Motivational Behaviors

Risk Taking- High ,

Moderate and Low Risk

Leadership- influencing
ability, intelligence,
knowledge in the concern
business, self -confidence,
inner drive, integrity

Communication- with
employees, suppliers,
institutions, customers
and many more.
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 CHARACTERISTICS OF AN
ENTREPRENEUR
1. Calculated Risk-taker
2. Innovator
3. Organiser
4. Creative
5. Achievement Motivated
6. Technically Competent
7. Self-confident
8. Socially Responsible
9. Optimistic
10. Equipped with Capability to drive

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11. Blessed with Mental Ability
12. Human Relations Ability
13. Communication Ability
14. Decision-Making
15. Business Planning
16. A venture Capitalist
17. Visionary
18. Entrepreneur make significant differences
19. Ability to Spot and Exploit Opportunities
20. Courage to Face Adversities
21. Leadership---An essential trait of the entrepreneur

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 How to Develop The Characteristics of a
Entrepreneur….1
Step 1 :
Examine your interests and abilities.
 List your areas of interest. What are your hobbies? What would
you like to learn? Should you pursue your own business, you'll
have more chance of success if you enjoy what you do.

 Write down your talents. Make the list extensive, and include
abilities you wouldn't normally list on a resume. Expertise in
fishing, coin collecting or restoring 1950s-era automobiles are all
examples of talents entrepreneurs have transformed into
businesses.

 Note your personality strengths and weaknesses. Be honest,

and get additional opinions from truthful people who know you
well. In order to develop entrepreneurial characteristics, it's
imperative that you know where your strengths and weaknesses
lie.

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 How to Develop The Characteristics of a
Entrepreneur….2
Step 2 :
Challenge yourself to find opportunities.
 Evaluate your lists for business potential. What type of
businesses could you develop out of your interests and
expertise?
 Write down all ideas, no matter how unusual. Use your
imagination to its full potential. Even an outrageous
thought may eventually lead to a feasible business plan.
 Think like an entrepreneur. What correlation can you
make between your talents and existing businesses in
your area? What gaps in their products or services could
you fill? What market share could be available?
 Brainstorm with others to gain additional insight. Discuss
your ideas with entrepreneurial-minded friends or family
members. Their input can help you hone your ideas.

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 How to Develop The Characteristics of a
Entrepreneur….3
Step 3 : Seek council from successful
entrepreneurs
• Find thriving businesses that relate to your areas of interest.
Focus on small companies; small business owners are typically
entrepreneurs themselves.
• Study those businesses. You can learn from the successes and
failures of others on your journey to become an entrepreneur.
What are they doing right or wrong? What areas are lacking
attention? What could you improve?
• Contact a business owner. Explain your interest in their field and
request a brief meeting at their convenience. If you're turned
down, move on to the next. Be persistent, and you'll find
someone willing to share their knowledge.
• Prepare your questions before the meeting. What do you really
want to know?. A mentor can help you navigate unfamiliar
territory as you develop the characteristics of an entrepreneur.

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 Class activity: Entrepreneurialmotivation

1) What personal factors motivate people to start up a

business?

2) What external situational factors motivate people to start

up a business?

3) What factors (both personal and situational) discourage

people to become entrepreneurs?

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 Entrepreneur and a Manager
Definition of Entrepreneur
• The term ‘entrepreneur’ is a French
origin which means ‘go between’ or
‘between-takers’. An entrepreneur
is a person who creates a new
enterprise by assembling inputs
(i.e. land, labour and capital) for
production purposes. He assumes
all risk and uncertainty, in order to
achieve profit and growth of the
business venture by identifying
new opportunities and combining
resources for the purpose of
capitalizing them. He innovates
new ideas and business processes.
• They are classified as an innovative
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entrepreneur, imitating
entrepreneur, fabian entrepreneur,
drone entrepreneur. Further, they
can be classified on the basis of
business, technology, motivation,
area, stages of development, etc.
The characteristics of a successful
entrepreneur are given below:
 Capacity to analyze
 Initiative and Independence
 High personal efficiency
 High need for achievement
 Risk Taker
 Commitment and Conviction
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 Entrepreneur and a Manager
• By the term ‘Manager’ we mean a person who gets the
things done through his subordinates, with the aim of
accomplishing business objectives efficiently and
effectively. The five primary functions of a manager are
planning, organizing, directing and motivating,
coordination and control.
• The manager is in charge of the particular division, unit
or department of the company. He may directly
command to workers, or he may direct the supervisors,
who will command workers. Therefore, he is the one
under whose supervision, his subordinates work and
report to him. Managers can be top level managers,
middle-level managers, low-level managers.
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 Distinction Between an Entrepreneur and
a Manager
BASIS FOR COMPARISON ENTREPRENEUR MANAGER

Meaning Entrepreneur refers to a person who Manager is an individual who

creates an enterprise, by taking financial takes the responsibility of
risk in order to get profit. controlling and administering the
organization.

Focus Business startup Ongoing operations

Primary motivation Achievement Power

Approach to task Informal Formal

Status Owner Employee

Reward Profit Salary

Decision making Intuitive Calculative

Driving force Creativity and Innovation Preserving status quo

Risk orientation Risk taker Risk averse

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 Distinction Between an Entrepreneur
and a Manager
Entrepreneur Manager
Owner - An entrepreneur is the owner of his Servant - A manager is a servant of his
own business. employer.
Profits - An entrepreneur earns profits from Salary - A manager earns salary which is
his business which is uncertain generally certain and limited.
and unlimited.
Full Risk Bearing - An entrepreneur is a Less or No Risk Bearing - A manager takes
person who has to take high risks for less or no risk while performing his job.
starting and running venture.
All Functions - An entrepreneur has Selective Functions - A manger looks
to look after all the functions of his after selective functions of an
organization. organization.
Innovator - An entrepreneur is always Executor - A manager is simply an
an innovator, in the lookout for new executor who is responsible for
products and services. executing the decisions of the owner
and entrepreneur.
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 Key Differences Between Entrepreneur and Manager
 A person who creates an enterprise, by taking a financial risk in order to get profit,
is called an entrepreneur. An individual who takes the responsibility of controlling
and administering the organization is known as a manager.
 An entrepreneur focuses on business startup whereas the main focus of a manager is
to manage ongoing operations.
 Achievements work as a motivation for entrepreneurs. On the other hand, the
primary motivation is the power.
 The manager’s approach to the task is formal which is just opposite of an
entrepreneur.
 An entrepreneur is the owner of the enterprise while a manager is just an employee
of the company.
 A manager gets salary as remuneration for the work performed by him. Conversely,
profit is the reward for the entrepreneur.
 An entrepreneur’s decisions are driven by inductive logic, courage, and
determination; that is why the decision making is intuitive. On the contrary, the
decision making of a manager is calculative, as they are driven by deductive logic,
the collection of information and advice.
 The major driving force of an entrepreneur is creativity and innovation. As against
this, a manager maintains the existing state of affairs.
 While entrepreneur is a risk taker, 2018_ED_UNIT_II
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 What were the lessons the respondents learnt in the
entrepreneurial process?
Do whatever it takes, whatever is necessary
Retain strong customer focus
Invest for the long-term
Invest in quality
Be hands-on
Multi-tasking is important
The need for the ability to tolerate ambiguity
Share profits with employees
Government's relative uninvolvement in the high tech industry is a
blessing
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 what hampers the entrepreneurial process?
• Financial struggle -- lack of money in the business as well as
personally was the most cited negative factor
• No government support -- however, a few entrepreneurs
disagreed, saying that the government has been supportive
and has given lots of concessions to the high tech industry
• Dearth of sophisticated local investors and angel investors
• Lack of a forum for discussing entrepreneurial issues
• Difficulty in finding top-notch resources (for instance,
recruiting from good schools)Poor infrastructure
• Corruption and bureaucracy

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 Class activity:
Entrepreneurialmotivation

1. Estimation of start up chances

in a given environment
2. Perception of own necessary skills and
abilities
Motivation 3. Availability of role models Start
4. Fear of failure and its personal, social, up
and financial consequences

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