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RCA 204, Innovation & Entrepreneurship

Unit V: (8 Hrs)

Women Entrepreneurship: Meaning, Characteristic features, Problems of Women


Entrepreneurship in India, Developing Women Entrepreneurship in India, Concept of
Social Enterprise and Social Entrepreneurship, Social Entrepreneurs, Sustainability
Issues in Social Entrepreneurship, Rural Entrepreneurship, Family Business
Entrepreneurship Project Management: Concept, Features, Classification of projects,
Issues in Project Management, Project Identification, Project Formulation, Project
Design and Network Analysis, Project Evaluation, Project Appraisal, Project Report
Preparation, Specimen of a Project Report Case Studies - At least 4 (four) during this
Course

_____________________________________________________________________________________

CONCEPT OF WOMEN ENTREPRENEURSHIP

Women Entrepreneurship is a process in which women initiate a business, gather


all resources, undertake risks, face challenges, provide employment to others and
manage the business independently. Approximately, 1/3 rd of the entrepreneurs in
the world are women entrepreneurs.

Women who innovate initiate or adopt business actively are called women
entrepreneurs.
J.
Schumpeter

Women entrepreneurship is based on women participation in equity and


employment of a business enterprise.
Ruhani j.
alice

BASED ON PARTICIPATION:

Government of India has defined women entrepreneurs as owning and controlling


an enterprise with a woman having a minimum financial interest of 51% of the
capital and giving at-least 51% of the employment generated in the enterprise to
women.

CHARACTERISTIC FEATURES OF WOMEN ENTREPRENEURSHIP

1. Accept challenges
2. Ambitious
3. Hard work
4. Patience
5. Motivator
6. Adventurous
7. Conscious
8. Educated
9. Intelligent

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RCA 204, Innovation & Entrepreneurship

PROBLEMS OF WOMEN ENTREPRENEURSHIP

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CATEGORIES OF WOMEN ENTREPRENEURS IN PRACTICE IN INDIA

SUPPORTIVE MEASURES FOR WOMEN'S ECONOMIC ACTIVITIES AND


ENTREPRENEURSHIP

1. Direct & indirect financial support


2. Yojna schemes and programmes
3. Technological training and awards
4. Federations and associations

Direct & Indirect Financial Support

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RCA 204, Innovation & Entrepreneurship

Nationalized banks
State finance corporation
State industrial development corporation
District industries centers
Differential rate schemes
Mahila Udyug Needhi scheme
Small Industries Development Bank of India (SIDBI)
State Small Industrial Development Corporations (SSIDCs)

Yojna Schemes and Programme

Nehru Rojgar Yojna


Jacamar Rojgar Yojna
TRYSEM
DWACRA

Technological Training and Awards

Stree Shakti Package by SBI


Entrepreneurship Development Institute of India
Trade Related Entrepreneurship Assistance and Development (TREAD)
National Institute of Small Business Extension Training (NSIBET)
Women's University of Mumbai

Federations and Associations

National Alliance of Young Entrepreneurs (NAYE)


India Council of Women Entrepreneurs, New Delhi
Self Employed Women's Association (SEWA)
Association of Women Entrepreneurs of Karnataka (AWEK)
World Association of Women Entrepreneurs (WAWE)
Associated Country Women of the World (ACWW)

Examples:
1. Mahila Grih Udyog: 7 ladies started in 1959: Lizzat Pappad
2. Lakme: Simon Tata
3. Shipping corporation: Mrs. Sumati Morarji
4. Exports: Ms. Nina Mehrotra
5. Herbal Heritage: Ms. Shahnaz Hussain
6. Balaji films: Ekta Kapoor
7. Kiran Mazumdar: Bio-technology

PROBLEMS OF WOMEN ENTREPRENEURS IN INDIA

Women in India are faced many problems to get ahead their life in business. A few
problems can be detailed as;

1. The greatest deterrent to women entrepreneurs is that they are women. A kind of
patriarchal male dominant social order is the building block to them in their way

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towards business success. Male members think it a big risk financing the ventures
run by women.

2. The financial institutions are skeptical about the entrepreneurial abilities of


women. The bankers consider women loonies as higher risk than men loonies. The
bankers put unrealistic and unreasonable securities to get loan to women
entrepreneurs. According to a report by the United Nations Industrial Development
Organization (UNIDO), "despite evidence that womans loan repayment rates are
higher than men's, women still face more difficulties in obtaining credit," often due
to discriminatory attitudes of banks and informal lending groups (UNIDO, 1995b).

3. Entrepreneurs usually require financial assistance of some kind to launch their


ventures - be it a formal bank loan or money from a savings account. Women in
developing nations have little access to funds, due to the fact that they are
concentrated in poor rural communities with few opportunities to borrow money
(Starcher, 1996; UNIDO, 1995a). The women entrepreneurs are suffering from
inadequate financial resources and working capital. The women entrepreneurs lack
access to external funds due to their inability to provide tangible security. Very few
women have the tangible property in hand.

4. Women's family obligations also bar them from becoming successful


entrepreneurs in both developed and developing nations. "Having primary
responsibility for children, home and older dependent family members,
few women can devote all their time and energies to their business"
(Starcher, 1996, p. .The financial institutions discourage women
entrepreneurs on the belief that they can at any time leave their business
and become housewives again. The result is that they are forced to rely on
their own savings, and loan from relatives and family friends.

5. Indian women give more emphasis to family ties and relationships.


Married women have to make a fine balance between business and home.
More over the business success is depends on the support the family
members extended to women in the business process and management.
The interest of the family members is a determinant factor in the
realization of women folk business aspirations.

6. Another argument is that women entrepreneurs have low-level management


skills. They have to depend on office staffs and intermediaries, to get things done,
especially, the marketing and sales side of business. Here there is more probability
for business fallacies like the intermediaries take major part of the surplus or profit.
Marketing means mobility and confidence in dealing with the external world, both of
which women have been discouraged from developing by social conditioning. Even
when they are otherwise in control of an enterprise, they often depend on males of
the family in this area.

7. The male - female competition is another factor, which develop hurdles to women
entrepreneurs in the business management process. Despite the fact that women
entrepreneurs are good in keeping their service prompt and delivery in time, due to
lack of organizational skills compared to male entrepreneurs women have to face
constraints from competition. The confidence to travel across day and night and

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even different regions and states are less found in women compared to male
entrepreneurs. This shows the low level freedom of expression and freedom of
mobility of the women entrepreneurs.

8. Knowledge of alternative source of raw materials availability and high negotiation


skills are the basic requirement to run a business. Getting the raw materials from
different souse with discount prices is the factor that determines the profit margin.
Lack of knowledge of availability of the raw materials and low-level negotiation and
bargaining skills are the factors, which affect women entrepreneur's business
adventures.

9. Knowledge of latest technological changes, know how, and education level of the
person are significant factor that affect business. The literacy rate of women in
India is found at low level compared to male population. Many women in developing
nations lack the education needed to spur successful entrepreneurship. They are
ignorant of new technologies or unskilled in their use, and often unable to do
research and gain the necessary training (UNIDO, 1995b, p.1). Although great
advances are being made in technology, many women's illiteracy, structural
difficulties, and lack of access to technical training prevent the technology from
being beneficial or even available to females ("Women Entrepreneurs in Poorest
Countries," 2001). According to The Economist, this lack of knowledge and the
continuing treatment of women as second-class citizens keep them in a pervasive
cycle of poverty ("The Female Poverty Trap," 2001). The studies indicates that
uneducated women don't have the knowledge of measurement and basic
accounting.

10. Low-level risk taking attitude is another factor affecting women folk decision to
get into business. Low-level education provides low-level self-confidence and self-
reliance to the women folk to engage in business, which is continuous risk taking
and strategic cession making profession. Investing money, maintaining the
operations and ploughing back money for surplus generation requires high risk
taking attitude, courage and confidence. Though the risk tolerance ability of the
women folk in day-to-day life is high compared to male members, while in business
it is found opposite to that.

11. Achievement motivation of the women folk found less compared to male
members. The low level of education and confidence leads to low level achievement
and advancement motivation among women folk to engage in business operations
and running a business concern.

12. Finally high production cost of some business operations adversely affects the
development of women entrepreneurs. The installation of new machineries during
expansion of the productive capacity and like similar factors dissuades the women
entrepreneurs from venturing into new areas.

Reference: http://www.indianmba.com/Faculty_column/FC293/fc293.html

HOW TO DEVELOP WOMEN ENTREPRENEURS?

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Right efforts on from all areas are required in the development of women
entrepreneurs and their greater participation in the entrepreneurial activities.
Following efforts can be taken into account for effective development of women
entrepreneurs.

1. Consider women as specific target group for all developmental programmers.


2. Better educational facilities and schemes should be extended to women folk
from government part.
3. Adequate training programme on management skills to be provided to
women community.
4. Encourage women's participation in decision-making.
5. Vocational training to be extended to women community that enables them
to understand the production process and production management.
6. Skill development to be done in women's polytechnics and industrial training
institutes. Skills are put to work in training-cum-production workshops.
7. Training on professional competence and leadership skill to be extended to
women entrepreneurs.
8. Training and counseling on a large scale of existing women entrepreneurs to
remove psychological causes like lack of self-confidence and fear of success.
9. Counseling through the aid of committed NGOs, psychologists, managerial
experts and technical personnel should be provided to existing and emerging
women entrepreneurs.
10.Continuous monitoring and improvement of training programmers.
11.Activities in which women are trained should focus on their marketability and
profitability.
12.Making provision of marketing and sales assistance from government part.
13.To encourage more passive women entrepreneurs the Women training
programme should be organised that taught to recognize her own
psychological needs and express them.
14.State finance corporations and financing institutions should permit by statute
to extend purely trade related finance to women entrepreneurs.
15.Women's development corporations have to gain access to open-ended
financing.
16.The financial institutions should provide more working capital assistance both
for small scale venture and large scale ventures.
17.Making provision of micro credit system and enterprise credit system to the
women entrepreneurs at local level.
18.Repeated gender sensitization programmers should be held to train financiers
to treat women with dignity and respect as persons in their own right.
19.Infrastructure, in the form of industrial plots and sheds, to set up industries is
to be provided by state run agencies.
20.Industrial estates could also provide marketing outlets for the display and
sale of products made by women.
21.A Women Entrepreneur's Guidance Cell set up to handle the various problems
of women entrepreneurs all over the state.
22.District Industries Centers and Single Window Agencies should make use of
assisting women in their trade and business guidance.
23.Programmers for encouraging entrepreneurship among women are to be
extended at local level.

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24.Training in entrepreneurial attitudes should start at the high school level


through well-designed courses, which build confidence through behavioral
games.
25.More governmental schemes to motivate women entrepreneurs to engage in
small scale and large-scale business ventures.
26.Involvement of Non Governmental Organizations in women entrepreneurial
training programmes and counseling.

SOCIAL ENTERPRISE & SOCIAL ENTREPRENEURSHIP

Social enterprise is a business model that puts people and community first, ahead
of private or personal gain, while operating in a commercially viable and sustainable
way.

What are Social Enterprises?

Social Enterprises are organizations or businesses set up to tackle social,


economic or environmental issues.
Driven primarily by social and/or environmental motives, they engage in
trading or commercial activities to pursue these objectives and produce
social and community gain.
Profits or surpluses generated by the enterprise are reinvested to further
their social objectives.
Ownership of the enterprise is within a community, or amongst people with a
shared interest.
Social enterprises have a strong job creation focus to help local people and
communities.
Social Enterprises are committed to social justice and social inclusion.

Two other key components of the wider Social Enterprise ecosystem are Social
Innovation and Social Finance.
1. Social Innovation
2. Social Finance

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Social Innovation: Social innovation means new strategies, ideas, concepts and
organizations that meet social needs. Social innovation aims to save or better lives,
improve social ills and solve problems. Social innovation is often undertaken by
social entrepreneurs and social enterprises. Social Entrepreneurs Ireland defines
'social entrepreneurs' as individuals involved in the development of new, creative
and innovative solutions to address the needs of specific communities or society in
general. Social entrepreneurs are risk-takers with the commitment and drive to
effect social change. The rate of growth in Social Enterprise Awards and the number
of applicants to the Arthur Guinness Fund are just two indicators of a surge in
interest in social innovation.

Social Finance: Social finance is a means of providing support to social enterprises


by way of repayable investment loans. Credit unions can be classified as social
finance providers, although they are restricted in their lending to individuals and co-
operatives.

Clann Credo was the first social finance provider in Ireland, established specifically
to service the borrowing needs of community and voluntary groups and social
enterprises.

What is a Social Entrepreneur?

Social entrepreneurs drive social innovation and transformation in various fields


including education, health, environment and enterprise development. They pursue
poverty alleviation goals with entrepreneurial zeal, business methods and the
courage to innovate and overcome traditional practices. A social entrepreneur,
similar to a business entrepreneur, builds strong and sustainable organizations,
which are either set up as not-for-profits or companies.

What is Social Entrepreneurship?

Social entrepreneurship is

About applying practical, innovative and sustainable approaches to benefit


society in general, with an emphasis on those who are marginalized and poor.
A term that captures a unique approach to economic and social problems, an
approach that cuts across sectors and disciplines grounded in certain values
and processes that are common to each social entrepreneur, independent of
whether his/ her area of focus has been education, health, welfare reform,
human rights, workers' rights, environment, economic development,
agriculture, etc., or whether the organizations they set up are non-profit or
for-profit entities.
It is this approach that sets the social entrepreneur apart from the rest of the
crowd of well-meaning people and organizations who dedicate their lives to
social improvement.
The key concepts of social entrepreneurship are innovation, market
orientation and systems change.

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Social entrepreneurship refers to the practice of combining innovation,


resourcefulness and opportunity to address critical social and environmental
challenges.
Social entrepreneurs focus on transforming systems and practices that are
the root causes of poverty, marginalization, environmental deterioration and
accompanying loss of human dignity. In so doing, they may set up for-profit
or not-for-profit organizations, and in either case, their primary objective is to
create sustainable systems change.

PRACTICE QUESTIONS:

1. What is the difference between Business and Social Entrepreneurs?


2. What is the significance of promoting women Entrepreneurship in India?
3. What are the major problems faced by the women Entrepreneurs?
4. What are the responsibilities of social enterprise?
5. Explain the Women Entrepreneurship also explain the major role played by
them in improving the economy of India?
6. Explain the concept of social enterprise and social Entrepreneurship. What
are the responsibilities of an Entrepreneur towards society?
7.

RURAL ENTREPRENEURSHIP

Rural Entrepreneurship defined in two ways: 1) As entrepreneurship emerging in


rural areas is rural entrepreneurship or 2) Refers to establishment of industrial units
in the rural areas.

Rural Industry: According to the Khadi and village Industries Commission (KVIC),
village industry or rural industries means industries located in rural area whose
population does not exceed 10000 or any such figure that provides goods or renders
any services with or without use of power and in which the fixed capital of an
artisan or a worker does not exceed a thousand rupees.

Rural Entrepreneurship is that entrepreneurship which ensures value addition to


rural resources in rural areas engaging largely rural human resources.

Types of Rural Entrepreneurship:

1. Individual entrepreneurship
2. Group entrepreneurship
3. Cluster formation
4. Co-operatives

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Categories:

All the village industries have been grouped into seven major categories which are
as follows:
1. Mineral based industry ,
2. Forest based industry ,
3. Agro based industry ,
4. Polymer and chemical based industry ,
5. Engineering and non conventional industry ,
6. Textile industry (including Khadi) , and
7. Service industry

Needs & Growth for Rural Entrepreneurship

The need for and growth of rural industries has become essential in a country like
India because of the following reasons:

Rural industries generate large-scale employment opportunities in the rural


sector as most of the rural industries are labor intensive.
Rural industries are capable of checking rural urban migration by developing
more and more rural industries.
Rural industries/entrepreneurship help to improve the per capital income of
rural people thereby reduces the gaps and disparities in income of rural and
urban people.
Rural entrepreneurship controls concentration of industry in cities and
thereby promotes balanced regional growth in the economy.
Rural entrepreneurship facilitates the development of roads, street lighting,
drinking water etc. in the rural sector due to their accessibility to the main
market.
Rural entrepreneurship can reduce poverty, growth of slums, pollution in
cities and ignorance of inhabitants.
Rural entrepreneurship creates an avenue for rural educated youth to
promote it as a career.

Problems of Rural Entrepreneurship

1. Lack of awareness about the importance of developing industries in rural


areas.
2. Disinterest of rural people towards assuming the career as an entrepreneur.
3. Rural people general you want to take-up salaried employment because of
assured income. Use of obsolete Technology, machine, and equipment.
4. Unawareness of rural people about entrepreneurial opportunities available.

How to Develop Rural Entrepreneurship?

The following are some of the measures suggested for developing entrepreneurship
in the rural areas in the country :

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1. Raw material: the availability of raw material is a must for any industry. It is
clear from the past experience that rural Industries having employment
potential cannot be sustained for long unless a strong raw material base is
created in rural areas itself.
2. Finance: it is considered as lubricant for setting up and running an industry.
Therefore finance need to be available on time for those who really need it.
3. Entrepreneurial education: it is one of the effective ways to inculcate the
entrepreneurial Acumen and attitude imparts entrepreneurial education in
schools, colleges, and Universities.
4. Unawareness: of facilities the main problem in setting up industries is not the
unavailability of facilities but non Awareness of facilities whatever are
available. Therefore there is a need to disseminate information about all that
is available to provide to the entrepreneurs to facilitate them in setting up of
the industries.
5. Set up modern infrastructure: Solve the problem of marketing for rural
industries there is a need to set up common production-cum-marketing
centers and developed with modern infrastructural facilities in the areas
having good production and growth potential that helps in promoting export
business.

NGOs and Rural Entrepreneurship

The NGOs involved in entrepreneurship development can be categorized into three


main types:

Primary level NGOs: the NGOs who mobilize their own resources, operates at
international level and execute developmental activities themselves or
through any immediate fall in this category.
Intermediate NGOs: these NGOs procure Finance from different Agencies and
then imparts training, and conduct workshops for the target workforce.
Grass root level NGOs: these NGOs conduct field activities establishing a
direct contact with the needy (Grass root) people.

The training imparted by the NGOs to the needy can be categorized into three
broad types:

Stimulation: conduction of EDP s and training programs for the target people
to stimulate the enterprising attitude among them.
Counseling: Providing Consultancy Services and counseling to the needy
about how to prepare a project, purchase of plant and machinery, feasibility
report, and performing are the procedural activities.
Assistance: providing assistance to the target group about marketing the
product and servicing Finance from Financial Institutions.
FAMILY BUSINESS ENTREPRENEURSHIP

A business actively owned and/or managed by more than one member of the same
family. Five unique resources every family business possesses:

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1. Human capital. The first resource is the family's human capital, or "inner
circle." When the skill sets of different family members are coordinated as a
complementary cache of knowledge, with a clear division of labor, the
likelihood of success improves significantly.
2. Social capital. The family members bring valuable social capital to the
business in the form of networking and other external relationships that
complement the insiders' skill sets.
3. Patient financial capital. The family firm typically has patient financial capital
in the form of both equity and debt financing from family members. The
family relationship between the investors and the managers reduces the
threat of liquidation.
4. Survivability capital. The family company must manage its survivability
capital-family members' willingness to provide free labor or emergency loans
so the venture doesn't fail.
5. Lower costs of governance. The family business must manage its ability to
hold down the costs of governance. In nonfamily firms, these include costs for
things such as special accounting systems, security systems, policy manuals,
legal documents and other mechanisms to reduce theft and monitor
employees' work habits. The family firm can minimize or eliminate these
costs because employees and managers are related and trust each other.

IMPORTANCE OF FAMILY BUSINESS

Contributing to economic development: family business play crucial role in


economic development of most of the countries. Retail sector, small scale
industry, and service sector are owned by family business.
Spirit of entrepreneurship: family business as contributes towards
development and has been successful in country like India it paves way to
various families to initiate and bring up new ventures in country.
Philanthropy : family business in India along with their development have also
concentrated towards welfare of general public by investing on hospitals,
educational institutions, construction of roads etc. E.g. reliance.
Trust Lowers transaction cost: partnership and other forms of business
involving outsiders usually leads to conflict in long run. In case of family
business as all the parties in family are affected by loss incurred in company
do not involve any sought of conflict and difference in point of view arises
they try and solve it internally in the family ensuring business is not affected
by the same.
Small, nimble and quick to react: as managing team size in family
business is small compare to other form of business decision making process
involves less period of time which helps to take timely decision.
Information as source of advantage: as family business is private firm it
is not required to take decision in accordance with pressure from other
sources and strategies of business need not be revealed to outsiders of
business.

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RULES TO SAVE FAMILY BUSINESS

Formulate policy framework and rules: succession plan is one of the


important aspect for formulating policy framework and rules. Succession plan
should outline exactly how the transfer of leadership will occur and should
establish the criteria that hires must meet before moving to role of
leadership.
Families must serve the business: members of the family should give their
best performance as per the expectation of the company. Members of the
family business should perform as effectively as non family members of the
business.
Future outlook: business firms should have proper core values which prove
to be yardstick for performance of business. Family members should believe
that present strategy prove to be obsolete in long run for the same company
should be flexible in nature in terms of adjusting to changes taking place in
business environment.
Accountability: should be one of the major criteria for transition process in
family business. Family members should be made clear about what is
expected from them by family business and they are required to prove their
efficiency through effective performance. They should be responsible for
decision taken by them during time of their leadership.
Addressing the issue: family business who focuses on improving their
overall company performance should take structured approach through
addressing the issue by careful examination of its core values. Members of
the family are required to evaluate their core value and understand their
relevance in relation to success of business.
Creating shared vision: it refers to communicating vision , objective of the
company to family and non family members of business. Communication of
information takes place through various sessions of meeting in company. All
the family members should have common and shared vision towards goal
attainment in company.

PITFALLS/ DEMERITS /PROBLEMS OF FAMILY BUSINESS

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Lack of focus and strategy: family business initially performs in effective


manner but at later point of time when aspect of transition comes into picture
family business tends to lose its track from its actual vision.
Lack of professionalism: data maintenance practice in family business usually
will not be in par with that of private companies which proves to be major
hurdle during decision making process.
Difference in educational levels of family members which drives some people
to follow obsolete method while others may focus on implementing latest
technology and practices in business.
Rivalries between siblings in company which may end up in separation of
family business.
Difference of attitude towards employees in company
Inability to separate family interest from the interest of business
Short term approach towards business, leading to an absence of investment
in employees and product development.
Insensitivity towards customers due to uncompetitive market resulting in
weaker market skills.

APPROACHES TO AVOID CONFLICTS IN FAMILY BUSINESS

(1) Coping approach: which involves adopting to negotiation among family


members try and resolve conflict and agree on common terms.
(2) Arbitrary approach: in this approach the elder person of the family will
be allotted with the power to frame rules and control business activity.
But this approach has not proven to be successful as most of the time
elder person in family may not prove to be effective manager for
business.
(3) Managed approach: this approach states that person who has ability
to maintain better relationship with key individuals of business and
have ability to understand business and manage the same should be
appointed as lead person for the business.

ENTREPRENEURIAL PROJECT MANAGEMENT: The concept of entrepreneurial


project management (EPM) was developed by adapting the knowledge of corporate
entrepreneurship theory to the context of project management. It consists of three
major parts:
1. The antecedents of EPM,
2. The elements of EPM and
3. The outcomes of EPM.

The model of the EPM concept is presented in Figure 1. In this post I am providing a
general overview of this concept.

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The model of the EPM concept

The antecedents of EPM include conditions in the project environment and


individual entrepreneurial cognitions. These elements of the model determine
the necessity for and the extent of EPM. Environmental conditions are
evaluated on four dimensions:
1. novelty of the project outcome,
2. the level of technological innovation,
3. complexity of the project scope and
4. Pace of the project delivery.

Individual entrepreneurial cognitions define the cognitive model of a project


manager, which is necessary when managing complex projects in complex
environments.

The elements of EPM include project governance, management architecture


and entrepreneurial processes and behavior.

Following entrepreneurial fashion project governance must be lean and of a


participative style. Management architecture consists of four dimensions:
(1) strategic orientation,
(2) resource orientation,
(3) management structure and
(4) Success philosophy.

Each dimension is presented by describing the two extreme management


cases: entrepreneurial and administrative. For example, it is argued that
emergent project management denotes entrepreneurial extreme, whereas
rigidly planned project management approach exemplifies an administrative
extreme on the dimension of strategic orientation. Lastly, the element of

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RCA 204, Innovation & Entrepreneurship

entrepreneurial processes and behavior describes five characteristics


associated with entrepreneurship:

(1) innovativeness,
(2) autonomy, (3) risk-taking,
(3) pro-activeness and
(4) Aggressiveness.

For example, autonomy describes the work discretion of a project manager


and project team; risk-taking is the willingness of a project manager or team
to take risks in order to keep project on track, and so forth.

Finally, the expected outcomes of EPM complete the model.

What is Project?

Projects can be further defined as temporary rather than permanent social systems
or work systems that are constituted by teams within or across organizations to
accomplish particular tasks under time constraints. An on-going project is usually
called (or evolves into ) a program.

Classification of Projects:

1. Quantifiable and Non- Quantifiable Projects


a. Quantifiable projects- quantitative assessment of benefits can be
made. Concerned with industrial development, power generation, and
mineral development.
b. Non- quantifiable projects- where quantitative assessment is not
possible. Concerned with health, education, defence etc.
2. Sectoral Projects
In India planning commission has accepted the Sectoral basis as the criterion
for classification:
a. Agriculture & Allied sector
b. Irrigation and power sector
c. Industry and Mining sector
d. Transport and communication
e. Social service sector
f. Miscellaneous
3. Techno- Economic Projects
Based on their techno- economic characteristics
a. Factor intensity- oriented classification
b. Capital intensive
c. Labour- intensive
Causation-oriented classification
d. Demand based or,
e. Raw materials based
4. Financial Institution Classification

Prepared by Neelam Rawat


RCA 204, Innovation & Entrepreneurship

All India and state financial institutions classify projects according to their
age, experience and the purpose:
a. New projects
b. Expansion projects
c. Modernization projects
d. Diversification projects
These projects are invariably are profit- oriented.
5. Services Projects
a. Welfare projects
b. Research and development projects
c. Educational projects

Prepared by Neelam Rawat