ENTREPRENEURSHIP

DEEPAK BAJAJ

ENTREPRENEURSHIP
Chapters
1. 2. 3. 4. 5. 6.

Entrepreneur & Entrepreneurial Management

Entrepreneurship Development Project Management

Product Selection
Business Model Project Design & Network Analysis

7.
8. 9.

Incentives & Subsidies

Statutory Requirements Current Trends

10.

Case Studies of Leading Entrepreneurs

ENTREPRENEUR & ENTREPRENEURIAL MANAGEMENT

Session I

Business Entrepreneurship, Entrepreneur

Session II

Characteristics & Traits of Entrepreneur

Session III

Factors Influencing Entrepreneur

Session IV

Causal Reasoning & Effectual Reasoning

SESSION I
(Business Entrepreneurship, Entrepreneur)

ENTREPRENEUR
In the process of producing good or providing services, many functionaries are generally involved. Inventor gets the idea of a new product or new service, capitalist provides the funds needed, specialist workers provide whatever services or expertise needed to turn the idea in to a product or service for sale in the market place. Managers plan the sequence of action, direct the workers to produce things, manage finances & marketing etc., to make these combined efforts successful. Yet there is one person who initiates the action, binds every thing together & makes the entire system function as an enterprise. He is the Entrepreneur, without whom the enterprise would not have taken off.

Entrepreneur is viewed as an initiator of action, stimulator of social economic changes & a harnesser of resources & factors of production to create wealth. Entrepreneur is one who distinguishes as a person & must be a visionary carrying dreams & desires to achieve & lead his enterprise & men to success. He is not an inventor, but an innovator with outstanding leadership qualities. Entrepreneur is an important input in economic development of a region; he is the focal point in fields of economics. He is a critical factor in socio-economic changes; he is the key person who envisages new opportunities, new techniques, new lines of production, new products & co-ordinates all other activities.

Entrepreneurship is neither a science nor an art, it is a practice, it has a knowledge base. Knowledge in entrepreneurship is a means to an end. Entrepreneur in essence, is one who can dream, desire, change & succeed in spite of all odd & adversities. Intense urge to exercise power over things & objects is an intrinsic quality of an entrepreneur. Sociologists consider him as a sensitive energizer in modernization of the society he lives in, his motivation & aspirations are conducive to development.

ORGANIZATION URGE SKILL VISION ENTERPRISE GROWTH MANAGEMENT INNOVATION RISK

Definition of an Entrepreneur
Term entrepreneur is defined in a variety of ways, yet no single expression has been found to define the precise skills & abilities that make a person a successful entrepreneur. The concept varies from country to country & period to period. To arrive at some description of entrepreneur, let us study the views of some known management gurus: J. A. Schumpeter A person who introduces innovations & changes is an entrepreneur.(He treated an entrepreneur as an integral part of economic growth). Adam Smith Entrepreneur is a person who provides capital without taking active part in the leading role in an enterprise. Webster Entrepreneur is one who is endowed with more than average capacities in risk of organizing & coordinating various factors of production.

Peter Drucker Entrepreneur is one who always searches for change, responds to it & exploits it as an opportunity. Innovation is a specific tool of entrepreneurs, the means by which they exploit change as an opportunity for different business or enterprise.
Dewing The function of an entrepreneur is one that promotes ideas in to business. Frank Young Entrepreneur is a change agent. Francis A Walker True entrepreneur is one who is endowed with more than average capabilities of organizing & coordinating various factors of production.

New Encyclopedia Britannica Entrepreneur is an individual who bears the risk of operating a business in the face of uncertainties about the future conditions.

Qualities of entrepreneur have been perceived in many different ways, but the four key elements those are always involved in it are (i) Innovation, (ii) Risk taking, (iii) Vision & (iv) Organizing skill. All these four elements are interrelated & form a continuous process in business. Entrepreneurial vision encompasses relentless pursuit for operational excellence, innovative technology & being responsive to the needs of the market place

RISK TAKING

INNOVATION

ETHICS

OPERATIONAL EXCELLENCE

CHARACTER

VISION

ORGANIZING SKILL

Stages of Entrepreneurial Process

Entrepreneurial process is a leadership function which centres round the dynamics of entrepreneurial growth & change. It is a process comprising several distinct stages. The 1st stage in the entrepreneurial process is some change in socio-economic environment leading to changes in every aspect of life. Interalia, the change creates needs for new goods & services. The 2nd stage is by starting a new venture. The 3rd process is intrapreneurship. It is the process of extending the enterprise domain of competence by exploiting new opportunities through new combinations of its resources. The 4th process is coordinating the varied activities to achieve the entrepreneurial goal.

Entrepreneurial Structure
Structure represents the formal, official task relationship of people in entrepreneurial activities. In entrepreneurial activity, policies, programs, practices & measurement make possible for innovation & growth. They create proper attitude & provide proper tools. Entrepreneurial activity confines to the task of planning, directing, controlling, marketing, leading, motivating & channeling the activities of individuals & the group towards entrepreneurial goal. Structure & interpersonal relationship should be such that they allow people to be entrepreneurs.

ENTREPRENEURIAL - STRUCTURE RELATIONSHIP

STRUCTURE

EXTERNAL ENVIRONMENT

PEOPLE

TECHNOLOGY

CLASSIFICATION OF ENTREPRENEURS
The most common classification rests on the business type. Under this classification we have: -

Business Entrepreneur He is an individual who conceives an idea for a new product or service & then creates a business to materialize their idea into reality. He taps both production & marketing resources to develop a new business opportunity.

Trading Entrepreneur He undertakes trading activities as his enterprise & does not concern himself with manufacturing work. He identifies potential market, stimulates demand for his product line & creates a desire & interest among buyers to go in for his products.

Agricultural Entrepreneur He undertakes agricultural activities which may include harvesting & marketing crops, fertilizers & other agricultural inputs

Service Entrepreneur He has interest in providing one or many types of connected services to the customers. He searches for potential avenues where customers are seeking convenience in their day-to-day activities & promptly attends to their needs. He creates & expands his customer base & maintains regular contact with his customers.

Industrial Entrepreneur
He is essentially a manufacturer who identifies the potential needs of customers & tailors a product or service to meet marketing needs. He is a product oriented man who starts an industrial unit because of the possibility of making some new product.

Corporate Entrepreneur
He is a person who demonstrates his innovative skills in organizing & managing corporate undertaking a form of business organization in which he plans, develops & manages a corporate body.

ENTREPRENEURSHIP
Entrepreneurship is the process undertaken by an entrepreneur to augment his business interests. It is an exercise involving innovation & creativity that will go towards establishing the enterprise. Entrepreneurship in effect is the creation of new enterprise. Entrepreneurship is a composite skill, the resultant of a mix of many qualities & traits imagination, readiness to take risks, ability to bring together & out to use various factors of production, capital, labour, land, government approvals as also ability to mobilize scientific & technological advances.

When an enterprise is in the process of being created by an entrepreneur, it is often referred to as a new venture. New ventures typically fall in the category of small businesses & is generally called small business owner. Small Businesses are considered to be independently owned company that employs fewer than 500 persons.

ENTREPRENEUR

ENTREPRENEURSHIP

ENTERPRISE

PERSON

PROCESS OF ACTION

OBJECT

Concept of Entrepreneurship
Entrepreneurship is the propensity of mind to take calculated risks with confidence to achieve a pre-determined business or industrial objective. In substance it is the risk taking capacity of an individual broadly coupled with capability to make correct decisions. An enterprise finds manifestation in different ways.

Capacity to take risk independently & individually with a view to making profit,
Seizing opportunity by way of producing & or marketing goods & commodities to meet the expanding & diversifying actual & potential needs & demands of the customers is what constitute the entrepreneurial material.

Promoting Innovation: Assessing Entrepreneurial Opportunities

In his book Innovation & Entrepreneurship, noted management consultant & writer Peter Drucker observes, Innovation is the specific tool of entrepreneurs, the means by which they exploit change as an opportunity for a different business or different services. Understandably it is difficult to be an entrepreneur without engaging in at least some innovation, since merely duplicating what is already being done will usually attract insufficient customers.

OPPORTUNITY CONDITIONS ASSOCIATED WITH NEW VENTURE INNOVATION

LEVELS OF INNOVATION
OPPORTUNITY CONDITIONS NEW INVENTIONS HIGHLY INNOVATIVE MODERATELY INNOVATIVE SLIGHTLY INNOVATIVE COPYCAT

Risks

Very high

High

Moderate

Moderate to Low Easy

Very high

Evaluation

Very difficult Very high

Difficult

Somewhat difficult High to Moderate

Easy

Profit potential

High

Moderate to low

Low to nil

Economic & Social Contributions of Entrepreneurship

Substantial economic & social contribution by entrepreneurs & the small businesses it generates has always been well recognized & has been receiving due attention from scholars & the popular media. Contributions associated with entrepreneurship in the areas of economic growth, innovation, employment opportunities, career alternatives for women & minorities & home based business can be listed as follows:

Economic Growth Innovation Employment opportunities Opportunities for Women & Minorities Home-based Business

Growth of Entrepreneurship in India

India has a proud record of entrepreneurship in IT & related sectors. We have to now endeavour in other segments of science & technology. SSI (Small Scale Industries) platform is an ideal nursery for testing out new sciences & technologies. However, in spite of favourable policies, govt. support, change in attitude of the society, the growth of entrepreneurship in India suffers due to certain factors inherent in our social system.

Discouraging social factors unfavourable family background, Discouraging economic factors inadequate infrastructural

family burdens, low literacy, dual role of women, disparities due to sex, caste, custom, lack of attitude, spirit, urge etc.

facilities, shortage of capital, shortage of technical labour, lack of transportation & communication facilities, absence of regular & cheap power supply & raw material etc. of ideal market conditions, red tapism in administration, complicated procedures, lack of stability in state & central governments.

Discouraging environmental factors lack of security, absence