Entrepreneurship Development

Syllabus head - Module 1

 Meaning of Entrepreneurship
 Evolution of the concept
 Functions of an Entrepreneur
 Types of an Entrepreneur,
 Intrapreneur Emerging class,
 Concept of ‘ E ’
 Evolution of ‘E’
 Development of ‘E’
 ‘E’- r – Culture
 Stages of ‘E’ neurial process ( 8Hrs )
 Meaning of Entrepreneurship
 Who is E-r? What is E-ship?
 E-r is a person who organizes and manages a business
undertaking and assumes ‘risk’ for the sake of profits
 Operating a business needs certain skills. Few people have
all the skills, but they can compensate by hiring staff and
consultants and become knowledgeable through training or
education.
 E-r is a person who creates an enterprise. The process of
creation is called “ E-ship”
 Meaning of Entrepreneurship
( Continued…)

 Word ‘entrepreneur’ is a French word, “enterprendre” meaning “

to undertake”, Those who undertook the risk of new enterprises.
 French tradition respected an E-r as a person who translates a
“Profitable Ideas into Productive activity. ”
 Encyclopedia Britannica :– “ A person who bears the risk of
operating a, in the face of uncertainty about the future conditions.”
 Peter Drucker : - “ One who searches for change, response to it and
it and exploits opportunities,”
 Joseph Scumpeter :- “ One who innovates and introduces
something new in the economy”.
 ILO: Ability to see/ evaluates ‘B’ opportunities and get Resours
 Evolution of the concept (development)

 Earliest Period:
Marko Polo, who attempted to establish his
routes to the Far East. He would sign a
contract with a Capitalist to sell his goods.
 Capitalist was a passive Risk Bearer – While
Merchant adventurer took active role in
trading
 Profits were shared between Capitalist and
Merchant @75% and 25%
 Evolution of the concept (development)

Middle Ages:
E-r was used to describe as actor and the person
who managed the large Production Projects.
 17th Century: A person who entered into a
contractual arrangements with Govt. to supply a
product or Service.
 John Law, a French man, was allowed to establish a Royal
bank, to form a trading company- The Mississippi company.
He pushed the stock price higher than the asset value, lead to
Monopoly and collapse of the company.
 Evolution of the concept (development)
 Richard Cantillon ( 1700) , understood Law’s mistake, developed the concept –
Founder, a risk taker- farmers, merchants, craftsmen, sole proprietors,
operating RISK ( buy @ certain price and sell @ uncertain price) are E-rs.
 17th Century E-r were contractors, who bore the risk of profit or loss
 18th Century:
- Industrialization occurred throughout the world. ‘Capital
provider’ and a ‘Capital User’- Inventions of Eli Whitney
(cotton gin ) and Thomas Edison (chemistry& electricity)
took place , but they could not finance.
-Whitney used finance from British crown, Edison from
private financier.
- Users of finance were ‘ E-r’ and providers ‘venture
capitalists’
 Evolution of the concept (development)

19th: and 20th Century

E-r and Manager were not distinguished differently,
considered alike. Eg. Andrew Carnegie ( Scottish).
(Invented nothing, but adapted and developed new technology in
American steel Industry)
- In the middle of 20th Century, Innovator was called as ‘E-r’.
( Revolutionize production, by exploiting invention new commodity, new
mfrg process, new source, new out let for products, new industry)
Eg; Edward Harriman (reorganize rail road) and John Pierpont Morgan
(developed banking house)
 Entrepreneur today
 Behavior = Initiative + Organizing/ Reorganizing of social,
economic mechanisms + acceptance of risk / failure
 To an economists- E-r one who brings resources, To a
psychologist-one driven by forces, experiment , accomplish
. To a businessman –1. Er as threat, aggressive competitor,
2. an ally, source of supply, customer, wealth source.
 Er :Process of creating ‘new’ with value by devoting time
and effort by financial , psychic and social risk, and
receiving the rewards of money, personal satisfaction and
freedom.
 Functions of Entrepreneur
1. Risk-taking * • 1.Risk Taking
Choice between alternatives
Risk, which cannot be
2. Innovating *
calculated, is uncertainty
Speculation
3. Organizing* Direction
2. Innovating
4. Creating New product Innovation
New methods of production
5. Achieving New market
New source of RM
New form of Organization
6. Technical skill
 Functions of Entrepreneur
1. Driving work force 3. Organization

2. .Communicating
 Planning of an
3. . Decision Making enterprise

4. Business Planning Co-ordination &

control
5. Visioning

6. Exploiting Opportunity  Supervision

 Area Entrepreneur Manager
1. Status Owner , Own Investment & Business Employee directed by
Entrepreneur
2. Target Setting-up a Sole Trader / Firm / Company To give service

3. Decision All long term expansion, Pricing, merger, Only Short and medium
Making diversification, etc by E-r term results are made
4. Rectifications of Results in loss, No one to correct Can be corrected by E-r
wrong decisions
5. Innovation Acts as ‘ Change Agent’, does immeditly, Implements plan,
increases Production and Profit
6. Risk bearing Can take any risk and Uncertainty Does not bear any riak.

7. Skills Creativity , Innovation Intuition and desire Relies on Public dealing

for achievement etc, abilities and conceptual
abilities

8. Qualification Foresightedness, Risk-taking, Hard work, To hold stipulated

Creative Thinking etc, qualification and to under
go Interview process
 Types of an Entrepreneur,
Intrapreneur
1. E- r as per Types of • 3. Use of Technology
Business: 1. Technical E-r
1. Business E-r 2. Non-Technical E-r
2. Trading E-r 3. Professional E-r
3. 3 Industrial E-r 4. As per stage of Development
4. Corporate E-r 1st Gen E-r
5. Agricultural E-r 2nd GEen E-r
2. E-r As Motivation 3. Lassical E-r
1. Induced E-r
 Types of an Entrepreneur
5. Classification given by”Danhof” • 8. Gender and age
1. Innovating E-r 1. Man / Woman E-r
2. Imitative E-r 2. Young / Old E-r
3. Middle aged E-r
3. Fabian E-r
9. Scale
4. Drone E-r
1. Large Scale Industry E-r
6. As per capital Ownership 2. Medium Scale Industry E-r
1. Private E-r 3.Small Scale Industry E-r
2. State E-r 4. Tiny Industry E-r
3. Joint E-r 10.1. Social E-r
7 As per Area 2. Spiritual E-r
3. Event E-r
Urban / Rural
4. Knowledge E-r
 Intrapreneurship
 Employees, who have entrepreneurial talent,
empowered to take decisions, but not keen to start
their own business – are known as Intrapreneurship.
 Int-pr = Corporate E-r- Pinchot (1985)
 E-activities of employees are explicitly supported
with in established Organization, empowered with
resources, enabling them to accomplish.
Failures of Intrapreneurs, are protected by Company.
Four elements of Intrapreneurship
 “Right” environment
 Work Force of enterprising people
 Support System
 Suitable reward system
Difficulties:
 Not easy to achieve effective Int-p
 Fair remuneration and reward system is difficult to establish
 If new ideas fail, employees may get disappointed
 Like gardeners, they prune, clear out, plant by recruiting new
entrepreneurs, at the same time – develop weeds, which are to be
spotted and looked after
 Intrapreneur
 Word was coined in the late 1970s inn US
 Top executives of big corporate, started leaving jobs, due to
entrepreneurial urge/drive.
 Success of such people, became a threat to corporate they
left.
 Gifford Pinchot devised a retention plan for such people,
giving full independence and autonomy, but with in the
Organization
 Empowered to own decisions, new products, own ideas to
implement.
 Their entrepreneurial spark was kept alive, Industries “turn
over “ratio reduced.
 E-r Vs In-r
o 100% Independent person  Partially Independent
o Liable to bear Loss/Profit  No loss, but some gain
o Continuously raises to  Does not attempts to
increase Capital/Return raise capital
o No relation with any  Interacts within the
Organization Organization and some
times out side also.
 Tips to Successful E-r
1. All round knowledge
2. Be conservative
3. Don’t expect quick return
4. To delegate
5. Take moderate risk
6. Plan systematically
7. Time Management
8. Data on Competitors
9. Anticipate problem/ Solve
10. Take expertise openion
• 11. Be a decision maker
• 12. Be Cost and Quality
conscious
• 13. Be committed, dedicat
ed- answer to all
Problems
• 14. Keep up delivery
100%
• 15 be bold and never
give-up in difficulties
 Er Vs Esp
Er and Esp are used synonym, but they are different
 Entrepreneur o Entrepreneurship
 Person o Process
 Creator o Creation
 Decision maker o Decision Making
 Initiator o Initiative
 Leader o Leadership
 Motivator o Motivation
 Risk taker o Risk taking

E-r precedes Esp, it is development and coordination of E-r functions

 Evolution, Development of E-r
• Esp – Undertaking, Origin from western societies.
• Esp -Meaning, shady
• 16th Century – Army leaders
• 18th Century- Dealer, buys & sells
• Schumpeter(1961) – Innovator
• Recent years, Esp – is recognized by all over world(US,
German, Japan and India)
• Indian definition: ‘One who undertakes to Organize,
own and runs a business’- is accepted by National
seminar on Entrepreneurship- 1975 New Delhi
Eps is viewed @ different view points
Sociologists Psychologists Economics
Social factors Personality Traits Economic Factors

Cast Need for Occupational

achievement background
Family Access to Capital
Affiliation & Power
Social Status Business & Technical
Risk taking experience

Decision Making

Creativity

Leadership
 Experts opinion on E-r & Esp
 Doing things in a new and better way
 Decision making under uncertainty
 Need for influencing others( need for power)
 Creative and Innovative activity
 Neither an Art nor Science – Practice & Knowledge
 E-r is investing and risking of time money and efforts
 Social decision making by economic innovators
 1.Percepttion of Opportunity 2. Organizing an Industrial
unit 3. Running profitable, going and growing concern
 E–r Culture
1. Increase the awareness of E-rial Attitudes and
Culture?
2. Intensify the E-r Education and awareness
Campaigns
3. Create Role models and Champions
4. Establish Mentor and Patron panels.
5. Incentive and Support for Business Succession.
6. Create Incentives of SMEs to take apprentices
7. Enhance “ Intrpreneurship”
Stages of Entrepreneurship Process
1) Identifying opportunities
2) Establish Vision
3) Persuade Others ( Communicate)
4) Gather Resources
1) Finance
2) HR
3) Knowledge
5) Create new Venture
6) Change / Adapt with time