LECTURE 3 DATE: 07-10-2019

UNIT: 01

Nature & Importance of Entrepreneur & Entrepreneurship

NATURE & DEVELOPMENT OF ENTREPRENEURSHIP

The term entrepreneur comes from the French Language which means "between-taker" or "go-between."

Earliest Period:

In this period the money person (portent of the capitalist) entered into a Contract with the go-between to sell this
goods. While the capitalists was a passive (inactive) Risk Bearer, the Merchant bore all the physical risk and
emotional risk.

Middle Ages:

In this age the term entrepreneur was used to describe both an Actor & a Person who managed large production
projects. In such large production projects this person did not take any risk. All kind of resources that needs for the
business projects is provided by a typical entrepreneur.

17th Century:

In the 17th century the entrepreneur was a person who entered into a Contract with the government to
perform a service.

Richard Cantillon, a noted economist of the 1700s, developed theories of the entrepreneur and is regarded as
the founder of the term. He viewed the entrepreneur as a Risk Taker who "buy at certain Price and sell at an
uncertain price, therefore operating at a risk."

18th Century

In the 18th century, the person with capital was differentiated from the one who needed capital. In other words, the
entrepreneur was distinguished from the capital provider (the Present-day venture capitalist).

One reason for this differentiation was the industrialization occurring throughout the world. Many of the inventions
developed during this time were Reactions to the changing world, as was the case with the inventions of Eli Whitney
(Cotton gin hand machine) and Thomas Edison.

Both Whitney and Edison were developing new technologies and were unable to finance their inventions themselves.
Whereas Whitney financed his cotton gin with expropriated British crown property, Edison raised capital from
private sources to Develop and experiment in the fields of electricity and chemistry. Both Edison and Whitney were
capital users or entrepreneurs, not providers or venture capitalists. A venture capitalist is a professional money
manager who makes risk investments from a pool of equity capital to obtain a high rate of return on the investments.
19th and 20th Centuries:

In the late 19th and early 20th centuries, entrepreneurs were frequently not distinguished from managers and were
viewed mostly from an economic perspective: Briefly stated, the entrepreneur organizes and operates an enterprise
for personal gain. He pays services he employs, and for the capital he requires. He contributes his own initiative,
skill, and imagination in planning, organizing, and administering the enterprise. He also assumes the chance of loss
and gain consequent to unforeseen and uncontrollable circumstances. The net residue of the annual receipts of the
enterprise after all costs have been paid, he retains for himself. In the middle of the 20th century, the notion of an
entrepreneur as an Innovator was established: The function of the entrepreneur is to reform or revolutionize the
pattern of production by exploiting an invention or, more generally, an untried technological method of producing
a new commodity or producing an old one in a new way, opening a new source of supply of materials or a new outlet
for products, by organizing a new industry.

Entrepreneurship and innovation

• An integral part of entrepreneurship.

• The act of introducing something new.
• The ability to create and conceptualize.
• To understand all the forces at work in the environment.
• The history from Egyptians who designed and built great pyramids out of stones blocks weighing many
tons each to the Apollo Lunar module to laser beams.
• Tools have changed with advances in science and technology but the ability to innovate has been present
in every civilization
LECTURE 4 DATE: 10-10-2019

THE ROLE OF ENTREPRENEURSHIP IN ECONOMIC DEVELOPMENT

The entrepreneurs with their ability to scan, analyze and identify opportunities in the environment
transform them into business proposition through creation of economic entities. Entrepreneurship
and economic development are intimately related. So, that entrepreneurial process is a major
factor in economic development and the entrepreneur is the key to economic growth. Whatever be
the form of economic and political set-up of the country, entrepreneurship is essential for
economic development. Entrepreneurship is an approach to management that can be applied in
start-up situations as well as within more established businesses.
According to Joseph Schumpeter, the rate of economic progress of a nation depends upon its rate
of innovation which is turn depends on rate of increase in the entrepreneurial talent in the
population.
According to Meir and Baldwin, development does not occur suddenly as a natural consequence
when economic conditions in some sense are right.
A catalyst is needed which results in entrepreneurial activity to a considerable extent. The
diversity of activities that characterizes rich countries can be attributed to the supply of
entrepreneurs. They play a vital role for the economic development of a country in the following
ways.
1. Effective Utilization of Resources: Entrepreneurship is all about putting to better use the
resources which are considered to be of low value with an aim of earning income. An
entrepreneur comes up with ideas of how to use what others may consider waste. This improves
the economy of a country through taxes and creation of jobs which improves the standard of
living of the beneficiaries.
2. Increasing Gross National Product and Per Capita Income: Entrepreneurs are always on the
lookout for opportunities. They explore and exploit opportunities, encourage effective resource
mobilization of capital and skill, bring in new products and services and develop...

The role of entrepreneurship in the economy of a country is to inspire new business ventures that
support wealth building and future prosperity. Entrepreneurs create new business opportunities in
all areas of industry; they support the growth and health of a country's national economy. Without
entrepreneurship, a country's economy may lack:
• innovation (research, development, new inventions and products)
• employment (entrepreneurs create jobs whenever they start new companies)
• Profits (entrepreneurs add value to the national economy by buying and selling products
and services).
Countries all have their own sets of resources; these may include mining deposits, farmlands,
orchards, and fisheries. However, getting these resources (if they are not nationalized, or
government-run) out into the marketplaces (national and international) depends on the ideas and
implementations of entrepreneurs. These visionary business people do market research, create
business plans, seek out investors and financing, and then strive to create products and services
that utilize a country's resources.
.

Without the actions of entrepreneurs, a country may not reach its full potential; after all, national
economic growth is dependent upon the proper ideas, innovations, and advancements. From
technology to food products to entertainment...entrepreneurs are the backbone of the national
economy, sharing space with established multinational corporations and government agencies.
Entrepreneurs create jobs, increase profits, and pay taxes that support a country's social programs,
health care system (if public, not private) and infrastructure (roadways, etc.). Without the tax
dollars of entrepreneurs, countries might not be able to properly care for their citizens.
Governments that recognize and respect the goals of entrepreneurs tend to prospective
entrepreneurs with plenty of incentives to start new businesses. Grants, tax breaks, and subsidies
may be offered to those who wish to take the plunge and go into business for themselves.
Countries that favor multinationals over small and medium-sized businesses run by entrepreneurs
may find that their brightest new talents leave the country for greener pastures. Sometimes, this
occurrence is referred to as "brain drain".
LECTURE 5 DATE: 14-10-2019

DISTINCTION BETWEEN ENTREPRENEUR VS MANAGER

Entrepreneur Manager

1. Is the person responsible for planning &

1. Is a person who establishes business unit
directing the work of a group of
& utilizes the other factors of production
individuals, monitoring their work &
like land, labor, capital.
taking corrective action when necessary.

2. Self Employed person. 2. Salaried persons.

3. One Man. 3. Team

4. Sets the goals. 4. As a manager he implies that goals.

5. An entrepreneur is the owner of the 5. A manager just an employee in the

enterprise enterprise of the entrepreneur.

6. Main motive is to initiate & start a 6. Main aim of a manager is to render

venture by setting up an enterprise. services to an entrepreneur.

7. RISK: An entrepreneur & a manager

differ in their standing, the entrepreneur
7. Where as a manager is an employee &
is the owner of the organization & bears
does not accept any risk.
all the risk & uncertainties involved in
running an organization.

8. Creative Thinking: An entrepreneur & a

8. His objective is to supervise & create
manager differ in their objectives. His
routines. He implements the plans &
objective is to innovate & create ideas &
ideas of an entrepreneur.
product. He act as a change agent.

9. Professional in nature, he makes

9. Decision Making: An entrepreneur
decisions after collecting detailed
usually makes decisions, even those of
information & reaching operative
critical importance for his business, on
conclusions, while relying on experts
the basis of his own personal intuition &
both from with in & out side the
“gut feelings”
organization.

10. FRAUD: He is not encouraged to
involve in fraudulent behavior where as
a manager does.
11. He is required to have certain
qualification & qualities like high
accomplishment motive, innovative
thinking, fore thought, risk bearing
ability.
12. An entrepreneur deals with faults &
failures as a part of learning experience.
13. An entrepreneur could be a manager.
14. He is intensely dedicated to develop
business through constant efforts,
innovation. He may employ a manager
in order to perform some of his functions
DISTINCTION BETWEEN ENTREPRENEUR VS INTRAPRENEUR
Entrepreneur
1. An entrepreneur is someone who,
through his skills and passion, creates
a business and is willing to take full
accountability for its success or
failure.
2. It is the entrepreneur who spots an
opportunity in the marketplace and
has the courage and zeal to turn this
opportunity into a business.
10. A manager may cheat by not working
hard, because his income is not tied up to
the performance of the organization.
11. It is necessary for a manager to be
educated in the fields of management
theories & practice.
12. Where as a manager have to avoid
mistakes & faults.
13. But manager can not be an entrepreneur.
14. Manager can not replace an entrepreneur
in spite of performing the allotted duties
& he has to work as per the guidelines
laid down by the entrepreneur.
Intrapreneur
1. An intrapreneur, on the other hand, is
someone who utilizes his skill, passion
and innovation to manage or create
something useful for someone else’s
business... with entrepreneurial
enthusiasm.
2. In contrast the Intrapreneur uses his
passion, drive and skills to manage the
business or create something new and
useful for the business.
3. An entrepreneur has the freedom to
act on his craze.
4. Entrepreneurs provide the spark
5. Entrepreneurs are found anywhere
their vision takes them.
6. Entrepreneurs face many hurdles, and
are sometimes teased and riddled with
setbacks.
3. Whereas, an intrapreneur may need to
ask for management’s approval to make
certain changes in the company’s
processes, product design or just about
any innovation he needs to implement.
Since an intrapreneur acts on innovative
impulses, this may result in conflict
within the organization. It is important
for organizations who are implementing
intrapreneurship, to create an
atmosphere of mutual respect among
employees.
When it comes to resources, the
intrapreneur holds an advantage over the
entrepreneur since the company’s
resources are readily available to him.
Conversely, an entrepreneur has the
difficult task of sourcing for funding and
resources on his own.
4. Intrapreneurs keep the flame going.
5. Intrapreneurs work within the confines
of an organization.
6. Intrapreneurs may sometimes have to
deal with conflict within the
organization.
7. Entrepreneurs may find it difficult to 7. Intrapreneurs have their resources
get resources. readily available to them.

8. Entrepreneurs may lose everything 8. Intrapreneurs still have a paycheck to

when they fail. look forward to (at least for now) if they
fail.

9. Entrepreneurs know the business on a 9. Intrapreneurs are highly skilled and

macro scale. specialized.

10.What makes entrepreneurs and intrapreneur similar is the passion to see things through
to the end and the courage to face failure.
LECTURE 6 DATE: 07-10-2019

UNIT: 02

The Entrepreneurial Mind (Achievement Motivation)

ACHIEVEMENT MOTIVATION:
➢ Need for achievements plays an important role in making an entrepreneur as successful.
➢ It is an inner self spirit which activates an entrepreneur to strive for success.
➢ It is simply the desire to do well.
➢ It gives the direction to our behavior towards our goals.
➢ Motivation can be developed through training & education.

❖ Assess:
➢ To judge the quality, importance or worth, for instance “He is so lazy that it is difficult to
assess his ability”
➢ Tolerance, open mind ness (temper which tolerates)

❖ Assessment:
➢ The process of documenting the information, usually in measurable terms, knowledge, skills,
attitudes & beliefs.
➢ A very perceptive (insightful) assessment of the situation, for instance “What is your
assessment of his chances of winning”
➢ The value or amount at which something is calculated qualitatively or quantitatively.
❖ Self-Assessment:
Your skills, interests, personality & values play an important role in your career choice. Find out
what effect they have & learn about the various self-assessment tools that help with the career
planning process.

• Self-Assessment is the process of gathering information about you in order to make an

informed career decision. Learn about value, interest, personality inventories & skill
assessment.

❖ Importance of Self-Assessment:
Self-Knowledge is the basis for all learning & change, if we know who & where we are? We can
more easily figure out where we want to go & how to get there.
 An Overview:
• A self-assessment should be the first step you take when choosing an occupation. Learning
about yourself helps you to find out what career to pursue.
• Take a minute to look at yourself as an entrepreneur. Do you have the qualities to make a
valuable product?
Review the entrepreneurial characteristics & put yourself to the test. After you have looked at
yourself as an entrepreneur, answer the following Questions:

❖ ATTRIBUTES …………..
➢ Do I view problems as an opportunities?
➢ Am I a priority setter?
➢ Am I customer focused?
➢ Am I courageous?
➢ Am I a critical & creative thinker?
➢ What is my tolerance about ambiguity?
➢ Am I positive attitude towards change?
➢ Am I committed to innovations?

❖ SKILLS ……………..
➢ Do I debate, clarify & express my values & beliefs?
➢ Can I fuel, inspire & guard the shared vision among business stakeholders?
➢ Can I communicate the business plan at all levels?
➢ Do I recognize the problems inherent to the planning process?
➢ Do I encourage dreaming & thinking the unthinkable?
➢ Can I align the budget & planning with my business goals & vision?
➢ Do I engage in goal setting?
➢ Can I develop & implement action plan?
❖ KNOWLEDGE ……………
➢ Do I know roles & responsibilities in planning & implementing business plan?
➢ Do I know the strategic planning process, short & long term planning tools?
➢ Do I know the business vision, beliefs & mission?
➢ Do I know the relationship of the budget to planning?
➢ Do I know factors that affect the business?
➢ Do I know the best practices & research on improving new product development &
innovation?
➢ Do I know the strategies to involve & communicate with the customers?
❖ FEED BACK ………….
• Feedback can provide individuals with the information & support needed to make positive
behavior in the workplace.
• It’s like a soul in the body.
• The fuel in the vehicles.
Feedback & its dynamic aspects for the entrepreneur:
• Environmental feedback
• Venture partner’s feedback
• Customer/clients feedback
• Competitors
• Rewards