I

nst
it
uteofI
nfor
mat
ionTechnol
ogy&Management
,NewDel
hi

Subj
ect
:Ent
repr
eneur
shi
pDev
elopment PaperCode:
BBA306
Cour
se:BBA(VI
) Dr
.GagandeepKaurGulat
i

UNI
T-1

(Sy
ll
abus:I
ntr
oduct
ion:TheEnt
repr
eneur
:Def
ini
ti
on,
Emer
genceofEnt
repr
eneur
ialCl
ass;
Theor
iesofEntr
epr
eneurshi
p)

Meani
ngandDef
ini
ti
onofEnt
repr
eneur

Thewor dentrepreneurhascomef r
om t heFr ancewor d“ent r
eprendra”whichmeans t o
under t
ake,to pur sueoppor t
uniti
est of ul
fil
lneedsand want st hroughinnov ationt o
under t
akebusi ness.I nt hey ear1725 t hewor d ent
repreneurwasf ir
stbroughti nto
economi csbyasoci alsci enti
stnamedRi chardcant i
li
on.Theexper twhoinvent edt he
theoryofent r
epreneur shipwasDav i
dMcCel li
oni n1961.Anent repreneurisaper sonwho
i
sabl et o expressand execut et he ur ge,ski l
l,moti
vation and i nnovat
ive abilit
yt o
establi
shabusi nessori ndustryofhi sown,ei theral
oneori ncoll
abor at
ionwithot her s.
Hismot i
veist oear npr ofitthrought hepr oduct i
onordistributi
onofgoodsorser vices.
Adv entur
ism,wi l
li
ngnesst of acerisks,innov ati
veurgeandcr eati
vepowerar ethei nbor n
qualit
iesofent repreneur ship.Entrepreneur shipcanalsobe ex pl
ainedasapr ocessof
executingawor ki nanewandbet terway .

Def
ini
ti
onofEnt
repr
eneur
:

Accor di
ngt oHar bison"Anentr
epreneurisnotani nnov at
ionbutanorgani
zationbuilder
oronewhohast heskil
ltobui
ldanor ganizat
ionandwhomustbeabl et oharnessthe
newi deasofdi ffer
entinnovat
orstothebestoft heorganizat
ion.
"
OR
PeterF.Dr uckerdef i
nes“ Anentrepreneurasonewhoal wayssearchesf orchange,
respondst oi tandexpl oi
tsitasanoppor t
unity
.I nnovat
ionisthespeci fi
ctoolof
entrepreneurs,themeansbywhi chtheyexpl oi
tchangeasanoppor t
unityforadifferent
businessorser vice”.

Charact
eri
sti
csofan
Entr
epreneur

1)Visi
on:Anentr
epreneurhasadream andhev isual
i
zesthewaysandmeansto
achi
evedream.Indoingsohevisual
izes:
 MarketDemands
 Socio-
Economi c
 Technologi
calEnvi
ronmentandt henbasedonthesedy
namic,
hevisual
i
zes
1
af
utur
eforhi
sbusi
nessv
ent
ure.

2
 2)Knowledge:Anentr
epr
eneurhasful
lknowledgeaboutal
lthet
echni
cal
it
iesofhi
s
busi
ness-beitt
echnol
ogi
cal
,oper
ati
onal,
financi
alormar
ketdy
namic.

3)Desir
et oSucceed:Anent r
epr
eneurhasastrongdesi
retosucceedinlif
e.Thei
r
dreamsarenotj ustl
i
mi t
edtoachiev
ingonesingl
egoalbutt
heyconstantl
ywork
toachievehighergoals.

4)I
ndependence:Anent
repr
eneurneedsi
ndependenceinworkanddeci
sion-
maki
ng.
Theydon'
tfoll
owther
ulesofthumbbutmaketheirownrul
esanddesti
ny.

5)Opti
mism:Ent repr
eneur
s are highl
y opt i
mistic aboutachi evi
ng t
heir visi
on.
Entr
epreneur
sdonotf ol
l
owt heconv enti
onalrulesofthumb.Theyhav eaconstant
desi
retointr
oducesomet hi
ngnewt ot heexisti
ngbusi ness.Theycr
eate,i
nnovate
orevenaddv al
uetotheexist
ingproducts/ser
v i
ces.

6)Leader
ship:Anentrepr
eneurexhi
bit
sthequal
it
iesofl
eader.Theyaregoodpl
anner,
organi
zers,hav
egoodcommuni cati
onski
ll
,gooddecisi
onmaker s,t
akeini
ti
ati
ve
toimplementplansandareresul
t-
ori
ent
ed.

7)Hardworki
ng:Atti
mestheyar
ecall
edwor kahol
i
cs.Workisworshi
pfort
hen.They
putincont
inuouseff
ort
stoachi
evesuccessand knowthatt
hereisnosubst
it
ute
forhar
kwor k.

8)Risk-Taking Abili
ty: Risk is an i nherent and i nseparabl
e element of
entrepreneur
ship. He assumes t he uncert
ainty offuture.An entrepreneur
guaranteesrenttothelandlor
d,wagestoempl oyeesandinterestt
otheinvestorin
thehopeofear ningmor ethantheexpenses.

Ent
repr
eneur
shi
pTr
ait
s

Asuccessf
ulent
repr
eneurmustpossesst
hef
oll
owi
ngt
rai
ts:

(
1)MentalAbil
it
y:Mental
abil
it
yconsistsofi
ntell
i
genceandcreati
vethi
nki
ng.An
entr
epreneurshoul
dbeint
ell
igentandmusthav eananal
yti
calmine.Heshoul
d
havethecapacit
ytoanal
ysestheproblem andabl
etostudythevari
ous
si
tuati
onsunderwhichdeci
sionhavetobemade.

(
2)ClearObjectiv
es: Anentrepreneurshoul
dhaveaclearobjecti
ve.Without
object
iveanent repreneurcannotsuccess.Soasuccessfulentr
epreneurmust
havetoobj ecti
vet oestabl
ishhisproducti
nthemarket,makepr of
itandalso
rendersocialservice.

(
3)BusinessSecrecy:Anentrepreneurmustbeabl etoguardbusi
nesssecrets.
Leakageofbusi nesssecr
etstot r
adecompet i
torsisaseri
ousmat t
er.Sothe
entr
epreneurshouldbeabletomakeapr operselect
ionofhi
ssubordi
nates.

3
 (
4)HumanRelati
onsAbili
ty:
Anentrepr
eneurmusthav
egoodrel
ati
onswi
thhi
s
cust
omerstoearnprofi
tandwinthei
rconfi
dencei
nhi
sproduct
.Hemustal
so
maint
aingoodrelat
ionwithhi
semployees.

(
5)Eff
ecti
veCommuni cati
on:Goodcommuni cat
ional
someansthatthe
ent
repreneurhast
heabili
tytoputhi
spointef
fecti
vel
yandwi
thclarit
y.
Communi cati
onabi
li
tyisthesecr
etoft
hesuccessofmostentrepreneur
s.

(
6)Techni
calKnowledge:Theentrepreneur
sar
edeali
ngwit
hsituat
ionswhere
sophi
sti
catedtechnol
ogyisinvolv
ed.Theentr
epr
eneurmusthaveareasonabl
e
l
eveloftechni
calknowledge.

(
7)Decisi
on-
Making:Runni
ngabusi nessrequi
restaki
nganumberofdecisi
ons.
Henceanentrepr
eneurshoul
dhavethecapacit
ytoanal
ysest
hev
ari
ousaspects
ofthebusi
nessforar
ri
vingatadeci
sion.

(
8)Risk-
Beari
ng:'
Nor
isk,
nobusi
ness'
or'norisk,nogai
ns'
.Ri
skisaninher
ent
andinsepar
abl
eel
ementofent
repr
eneurship.Heassumestheuncer
tai
nty
offutur
e.

(
9)Self
-Conf
idence:Ent
repr
eneur
smusthavethement al
capacityt
of aceany
sit
uati
on.Theyshouldal
sohavetheabi
li
tyt
oinspir
eother.Theymusthav e
theconfi
denceinthemselv
esandthedet
erminat
iontoachievetheirgoal
s.

Ty
pesofEnt
repr
eneur
/Cl
assi
fi
cat
ionofEnt
repr
eneur

(
A)Cl
assi
fi
cat
ionont
heBasi
sofOwner
shi
p

(
1)Founderor" Pur
eEntr
epr
eneur
s":Thoseindivi
dualswhoarethefounderofthe
business.Theyaret
heoneswhoconcept uali
zeabusinesspl
anandt henputin
eff
ortstomaket hepl
anasuccess.Exampl e:Dhi
rubhaiAmbani
oftheReliance
Group.

(
2)Second-
gener ati
onoperator
soff amil
y-ownedbusiness:
Theyar eindiv
idual
s
whohav einherit
edthebusinessfrom t
heirfat
hersandforefat
hers.Example:
Li
keMukeshAmbani andAnilAmbani sonsofDhirubhaiAmbani ofthe
Reli
anceGr oupnowspl i
tint
ot wo:Rel
ianceIndust
riesLi
mitedandRel i
ance-
AnilDhi
rubhai AmbaniGroup.

(
3)Franchi
sees:I
tisamet hodofdoingbusinesswhereint
hepar entowner
l
icenseshistr
ademar ksandtr
iedandprov esmethodsofdoingbusinesstoa
fr
anchiseeinexchangeforarecurr
ingpayment.Example:
NIIThasgi veni
ts
fr
anchiseeoperati
onstolocalpl
ayersaf
terthor
oughscruti
nyandpr oper
tr
aini
ng.

(
4)Owner-
Manager
:Whenapersonbuy
sabusi
nessf
rom t
hefounderandthen
i
nvest
shisti
meandresour
cesi
nithei
scal
l
edtheowner
-manager
.Example:

4
Li
keSabeerBhat
iai
sthef
ounderent
repr
eneurofHot
mai
l
.

5
(B)
Classi
fi
cat
ionOnTheBasi
sOfPer
sonal
i
tyTr
ait
sandThei
rSt
yleofRunni
ngThe
Busi
ness

(
1)TheAchiev
er:Thesetypesofentrepreneur
shav epersonaldesi
restoexcel.
Theonlydr
ivethatpushesthem isthedesir
etoachi evesomethinginli
fe,
the
desi
retomakeamar kinsociet
y,thedesir
etopr ov
et hei
rexcel
lence.Theydo
notneedanyexternal
stimulusbutareself
-dri
ven.

(
2)TheI nducedEntrepreneur
:Theset y
pesofent
repr
eneur
sarei
nducedbysome
externalfact
orstost ar
tabusiness.Theex
ter
nalf
actor
scoul
dbelike:
 Gov ernmentPolici
es
 Unempl oy ment
 Fami l
ySuppor t
 Facili
tat
ingInst
itut
ionalSupport

(
3)TheIdeaGenerat
or:Thesekindsofentrepr
eneursarehi
ghlycr
eati
vepeoplewho
areal
way si
nsearchofinnovati
veideasforset
ti
ngupnewbusi nessventur
es.
TheyenjoytheFi
rstMovers'
Adv antageandareabletoski
m hi
gherpr
of i
tsfr
om
themarket.

(
4)TheRealManager :Ther
ealmanager srunthebusi
nessinasy st
ematicmanner.
Theyanalyzebusinesssi
tuat
ion,assessthedemandsoff ut
ure,bot
hint er
ms
ofopportunit
ies and t
hreat
s and t hen t
ake act
ions based on the above
assessments.

(
5)TheRealAchi
evers:
Ther ealachi
eversar
eful
lofli
fe.Theyarel
ookingfort
he
achi
evementofnoteventheirgoal
sbutalsoofpeopleassoci
atedwit
h
themsel
vesli
keemployees,suppli
ersanddi
str
ibut
ors.

(
C)Cl
assi
fi
cat
ionbasedont
het
ypeofBusi
ness

(
1)Indust
ri
alEntr
epreneur
:Indust
ri
al ent
repr
eneurisanentr
epreneurwhois
i
nt omanufact
uri
ngofapr oduct.Heident
ifi
estheneedsandwant sof
customersandaccordi
nglymanuf act
uresproduct
stosatisf
ytheseneeds
andwants.

(
2)TradingEnt r
epr eneurs:Tradingent repreneurisonewhounder t
akestradi
ng
acti
v i
ti
esandi snotconcer nedwi t
ht hemanuf act
uri
ngofpr oducts.Heidenti
fi
es
potentialmarket s,sti
mulatesdemandsandgener at
esi nterestamongbuy ersto
purchaseapr oduct .
(
3)Corporat eEntrepreneur:Cor porateentrepreneuri
saper sonwhodemonst rat
es
hisinnov at
iveski l
linorganizingandmanagi ngacor porateunder t
akingwhichis
regi
ster edundersomeact st hatgiv
eni taseparatelegal enti
ty.

(
4)Agri
cult
uralEnt
repr
eneur:Agricul
tur
alentr
epreneur
saret
hoseent
repr
eneur
s
whounder t
akebusinessrel
atedtoagricul
tur
alacti
vi
ti
esl
i
kefar
m equi
pments,
fer
ti
li
zersandotherinput
sofagr i
cul
ture.
6
(
D)Cl
assi
fi
cat
ionont
heSt
agesofDev
elopment

7
 (
1)Fi
rstGenerati
onEntr
epr
eneur:
Af i
rst
-generat
ionentr
epr eneurisonewhost art
s
anindustr
ial
unitbymeansofaninnovati
veskil
l.Heisessent i
all
yaninnovator
combiningdif
fer
entt
echnol
ogiestoproduceamar ketableproductorserv
ice.

(
2)ModernEntr
epreneur:Amodernent
repreneuri
sonewhounder t
akesbusi
ness
t
osatisf
ythecontemporar
ydemandsoft hemar ket.Theyunder
taket
hose
vent
ureswhi
chsui tt
hecur
rentsoci
o-cul
turalt
rends.

(
3)Classi
calEntr
epreneur
:Aclassi
calent
repr
eneuraster
eo-t
ypeent
repr
eneuri
s
onewhoseai mi stomaxi
mi z
etheeconomicretur
nsatalevel
consi
stentwi
th
thesurvi
valofthefi
rm,wi
thorwithoutel
ementofgrowth.

(
E)Cl
ear
anceDanhof
’sCl
assi
fi
cat
ions

Danhofcl
assi
fi
esEnt
repr
eneuri
ntof
ourt
ypes.

(
1)Innovati
veEntrepreneur:ThiscategoryofEnt repreneuri schar
acter
izedbysmel l
of innovati
veness.Thi st ype of Entr
epr eneur ,sense t he opportuniti
es for
i
nt r
oducti
on ofnew i deas,new t echnology ,discov er
ing ofnew mar kets and
creati
ngnewor ganizations.SuchEntrepreneurcanwor konlywhencertainlevelof
developmentisalreadyachi evedandpeopl el ookf orwardtochangeandi mprov e.
SuchEnt repr
eneurar ev er
ymuchhel pfulf ort heircountrybecauset heybr i
ng
aboutat r
ansformationi nli
festyl
e.

(
2)Adoptive orImitat
ive Entrepreneur:Such entrepreneursi mit
atet he exist
ing
entr
epreneurandsett heirenterpri
seinthesamemanner .Inst
eadofi nnovati
on,
mayj ustadoptthetechnologyandmet hodsinnov atedbyot hers.Sucht y
pesof
entr
epreneurareparti
cularl
ysui tabl
eforunder-developedcountriesforimitat
ing
thenewcombi nati
onofpr oductionalr
eadyavai
lableindevelopedcount r
ies.

(
3)FabianEnt r
epreneur
s:Fabianentrepr
eneursarecharact
eri
zedbygr eatcaut
ion
andskeptici
sm, i
nexperi
ment i
nganychangeinthei
renter
pri
ses.Theyi
mitat
eonly
wheni tbecomesper f
ectl
yclearthatf
ail
uretodosowoul dresul
tinalossofthe
rel
ativ
epositionintheent
erpri
ses.

(
4)DroneEnt r
epreneurs:Suchentrepreneursareconser
vati
veoror t
hodoxinoutlook.
Theyal waysfeelcomf ort
ablewi ththeiroldfashi
onedt echnol
ogyofproducti
on
even though technologi
es hav e changed.Theynev erl i
ke to getri
d oftheir
tr
adit
ionalbusiness,tradi
ti
onalmachi ner
iesandt r
adi
tionalsystem ofbusi
ness
evenatt hecostofreducedreturns.

(
f)Ar
thurHCol
eCl
assi
fi
cat
ion

Ar
thurHCol
ecl
assi
fi
esent
repr
eneur
sasempi
ri
cal
,rat
ional
andcogni
ti
veent
repr
eneur
.

(
1)Empir
ical:
Heisentrepr
eneurhar
dlyi
ntr
oducesany
thi
ngr
evol
uti
onar
yand
fol
l
owst hepr
inci
pleofrul
eofthumb.

8
 (
2)Rational:
Therat
ional
entr
epreneuri
swellinf
ormedaboutt
hegener
al
economi ccondi
ti
onsandint
roduceschanges,whi
chlookmor
e
revolut
ionar
y.

(
3)Cogniti
ve:
Cognit
iveentr
epreneuri
swellinf
ormed,dr
awsupontheadvi
ceand
ser
vicesofexpert
sandi nt
roduceschangesthatr
efl
ectcompl
etebr
eakfr
om t
he
exi
sti
ngschemeofent er
pri
se.

Qual
i
tiesofanEnt
repr
eneur

Theent
repr
eneurmusthav
efol
l
owi
ngqual
i
ties

(
1)Planner:Ent
repreneurhasast r
ongdesi ret
oachiev
eahi ghergoalandmakethei
r
dreamscomet rue.Sotheentrepreneurmusthavethesequali
tytoachi
evet
he
targetanentrepreneurcannotachievethetar
get
.

(
2)Techni
cian:
Anentr
epr
eneurmusthav
ethetechni
cal
knowledge.Heshoul
d
knowthathowtouset
heresour
cesandachi
evethetar
get
.

(
3)RiskBear
ingAbi
li
ty:
Riski
sv er
yimport
antelement.Anentrepr
eneurmust
havecapaci
tyt
obearingr
iskanentr
epreneurcannotsuccess.

(
4)Deci
sionMaker:Decisi
onmaki ngisthepr ocessofchoosingbestalt
ernat
ive
amongv ar
iousal
ternat
ives.Anentrepreneurmusthav ethesequali
ti
esbecause
deci
sionmakingaff
ectthepr of
it
abili
tyandr eput
ati
onoft heent
erpri
se.

(
5)Abil
it
ytof i
ndandExploreOpportuni
ti
es:Entrepr
eneur
ialper
sonsar
equickto
seeandseizeopport
unit
ies.Theyshowani nnovati
vet
urnofmindandconver
t
dif
fi
cult
iesi
ntooppor
tuni
ties.

(
6)Moti
vator
:Anentrepreneurmusthav eamotivator
.Heinspi
restheempl
oyees
t
oachievi
ngthetarget.Withoutmotiv
ati
onanent r
epr
eneurcannotachi
evethe
t
arget
.Somot i
vati
oni sverynecessaryf
orachievi
ngt
het ar
get.

(
7)Futur
eOri
ent
ed:Ent
repr
eneurshowsahighlev
el offut
ureor
ient
ati
on.Theydo
notall
owt
hepasttoobsessthem.Theyar
eorientedtowar
dspresentand
fut
ure.

(
8)Int
erpersonal
Skil
l
s:Anentr
epreneuri
sapersonwhoduri
ngthecour
seofhi
s
acti
vit
iesheshouldbeapersonwholikeswor
kingwi
thpeopl
eandwhohasski
l
ls
ofdealingwit
hpeople.

(
9)FacingUncert
ainty:Anentr
epr
eneuri
saper sonwhof acesuncer
taint
y.The
futur
eisuncert
ain.Sothedeci
si
onofent
repr
eneuraf
fectsthepr
ofi
tabil
i
tyand
reputat
ionoft
heent er
pri
se.

9
 (
10) Coordinat
ion:Anentrepr
eneurmusthav eacoordinat
or.Heal
locat
es
ther
esourcesandut i
li
zestheresourcesf
orachievi
ngthetarget
.Wit
hout
coor
dinat
ionanent r
epreneurcannotachi
evethetarget
.

Funct
ionsofEnt
repr
eneur

Anent
repr
eneurhast
oper
for
mthef
oll
owi
ngf
unct
ion:

(
1)RisktakingandUncer t
aintyBearing:Thefutur
eisunpr edi
ctabl
e.The
entr
epreneurhast otakerisksinthesecircumstances.Ift
hev ent
uresucceeds,
theentrepreneurprof
it
s;ifitdoesnot,lossesoccur.Thus,t
akingri
sksformsan
i
mpor tantentrepr
eneuri
alf uncti
on.

(
2)Taki
ngBusi nessDecisi
ons:Al
ldecisi
onsconcer
ningbusinessar
et akenbythe
entr
epreneur.Hehast ofor
mulateanacti
onplanregardi
ngtheproductand
qual
ityoftheproducttobeproduced.Hehastoev ol
vethebestpossibl
emet hod
ofproducti
onwhichwoul dearnhim asi
zeabl
eprofit
.

(
3)ManagerialFuncti
ons:Theentrepr
eneurperf
ormsv ariousmanageri
alfunct
ions.
Theentrepreneurarr
angesfi
nance,purchaserawmat erial
s,pr
ovi
desthe
necessaryinf
rastr
uctur
eforproducti
on.Theentrepreneurhasamulti
phase
personal
itywhenheunder t
akesmanager i
alfuncti
ons.

(
4)I
nnovat
ion:
Themosti mportantfuncti
onofanent r
epreneuri
sinnovat
ion.He
i
ntr
oducesfar
-reachingi
mpr ovement si
nt hequanti
tyandquali
tyofpr
oduction
l
i
ne.Heconsiderst heeconomi cviabi
li
tyandtechni
calfeasi
bil
i
tyofaninventi
on.

(
5)Coor di
nat
ion:
Theentrepr
eneurcoordi
natestheot
herfactorsofproduct
ion.
Coor di
nat
ioni
nvol
vesselecti
onoftheri
ghttypeoffact
ors,employmentofeach
factori
ntheri
ghtquanti
ty,
useofthebesttechni
caldevi
ces, di
vi
sionofl
abor,
reducti
onofwasteetc.

(
6)Maint
ainGood-
Relati
ons:Anent
repr
eneurmusthavegoodr el
ati
onswi
thhis
cust
omertoearnprofi
tandwinthei
rconfi
dencei
nhisproduct.Hemustal
so
maint
aingoodr
elati
onswithhi
sempl oy
ees.

(
7)AnalysistheEnvir
onment :Anent r
epreneuranalysi
stheenv i
ronment.
Environmentisthatfactorwhichaffectsthebusiness.Therearetwotypeof
envir
onment :I
nternalEnvir
onment :I
nternalenvi
ronmentarecontrol
labl
e
ExternalEnvi
ronment: Ext
ernalenvi
ronmentar ebeyondt hecontr
olofthe
business.

(
8)Planni
ng:Pl
anningist
hefirstf
uncti
onoft hemanagement.Planningis
decidi
ngi
nadv ancewhatistobedone, howi stobedone,whi
chi stobedone,
bywhom istobedone.Itisverynecessaryfuncti
onofent
repreneur
.Without
pl
anninganentrepr
eneurcannotachievethetarget.

1
0
 (
9)Util
izestheResources:Anentrepreneurall
ocatestheresour
cesand
uti
li
zest her
esources.Anentrepreneurmustut il
izether
esourcesfort
he
achievementoftheobjecti
ves.Iftheentrepreneurdoesnotuti
li
zesthe
resourceshecannotbecomeasuccessf ul entr
epreneur
.

Di
sti
nct
ionbet
weenEnt
repr
eneurandManager

Of t
en the t wo t erms namel y entrepr
eneurand managerar e consi der ed as
synonym.Howev erthet wogi vedi ff
er entmeani ng.Anent repreneurst artsav entur et hen
a manager t akes ov er to or gani ze and co- ordinate cont inuous pr oduct ion.An
entrepreneurisbei ngent erpri
singasl ongashest artssomet hi
ngnew t hent her out i
ne
day-to-
daymanagementoft hebusi ness i s passedont ot hemanager .Pet erDr ucker
clai
ms t hatt he pr ocess ofent r
epr eneurshi
pi s directing the use ofr esour ces t o
progressiveacti
v i
ti
esr atherthanf or“ administ
rativeef f
iciencies”.Thisr eal
lyclarifiest he
role ofan ent repreneurf r
om t hatofa manager .Pl ease not et hati n mostsmal l
businessest heent repreneurwhost artsthev entureal sohast oper formt her ol eofa
manageri nnur t
ur i
ngi tandmaki ngitgr owandmanager sf requentlyhav etot hinkofnew
way stocapturemar kets,facecompet it
ionetc.

Themaj
orpoi
ntsofdi
sti
nct
ionbet
weent
het
woar
epr
esent
edher
e.

I
ntr
apr
eneur
s

Anewbr eedofentrepreneursiscomi ngtot heforeinlargeindust

rialor
ganizat
ions.They
arecalledas‘I
ntr
apr eneurs’
.I
nl argeorganizat
ions,thetopexecutivesareencour agedto
catchholdofnewi deasandt henconv er
tthem i nt
opr oductsthr
oughRandDact ivi
ti
es
withi
nt he framewor kofor ganizat
ions.Itisf oundi ndev el
opedcountriesthatsuch
Int
rapreneursinl arge numberar eleavi
ng t he organizat
ion and star
ted theirown
1
1
ent
erpr
ises.Manyofsuch

1
2
Int
rapr
eneurshav
ebecomeexceedi
nglysuccessf
uli
nthei
rvent
ures.Thedi
ff
erencebet
ween
entr
epreneur
sandInt
rapr
eneur
sisgi
venbelow

Ul
tr
apr
eneur
s

Throught heent repreneur ship hasbeent heref oral ong time,i tsperformanceand
execution ev olvewi t
ht hepr ev alenteconomi ccondi tionsoft heday .Theent repreneurs
ofthe90sar eadi f
ferentbr eedi nr el
ati
ont ot heirimmedi atepr edecessorsfrom the80s.
Thus, t
hepat hofsuccessf ulent repreneurshipisev erchangi ngast heartandsci enceof
entrepreneur ship,ist aking anew col ors.Now- a- day snew pr oductsand ser vi
cesar e
conceiv ed,cr eated,t ested,pr oduced andmar ket edv eryquicklyandwi t
hgr eatspeed.
Ther ef
or etoday ’sent repreneur sneedt ohav edi ff erentmi ndsetaboutest ablishingand
operatingacompany .Thi smi ndseti swhati scal l
edul trapreneur i
ng.
Accor dingt oJamesB Ar kebaur,theconceptoful trapreneuri
ng ist oi dentif
y
businessoppor t
uni t
y,det erminei tsv i
abili
tyandf or m acompany .I
trequir
esassembl i
ng
a super compet entmanagementt eam whot hendev el
op,pr oduceandmar ket t he
productorser vice.Theyt hensel lt
hemaj orit
yi nt erestoft hecompany ,alloft hiswith
maxi mum r esour celev erage ofbot ht al
entandmoneyi nt heshor testopt i
mum t i
me
peri
od.Ul tra growt h compani es are notmade t o pass on t ot he nextgener ati
on.
Ultr
apreneur screat ethem andt hensel lout,mer georcombi ne.Thei rli
felongchal lenge
i
st odoi tagainandov eragain.

Rol
eofEnt
repr
eneuri
nEconomi
cGr
owt
h

Ent
repr
eneurhashi
srol
einmoder
neconomi
cdev
elopmentatl
eastt
hreeaspect
s:

(
1)Theentrepreneurco-
ordi
natest heotherfact
orsofproduct
ion.Thi
sinv
olves
notonlyassembl i
ngthefactors,butalsotoseethatt
hebestcombinati
onof
fact
orsismadeav ai
l
ableforthepr oducti
onprocess.

1
3
 (
2)Theent r
epreneurtakesri
sks.Thi
sistheimportantf
unct
ionoft
heent
repreneur
andt hequantum ofprof
itherecei
vesisdi
rectl
ypropor
ti
onatet
other
iskshe
takes.Ri
sksar egeneral
l
ybasedont heanti
cipati
onofdemand.

(
3)Finall
ytheentrepreneurinnovates.Innovat
ionisdifferentfr
om inv
enti
on.
I
nv enti
onist hewor kofscienti
sts.Innovat
ionimpl i
est hecommer ci
alappl
i
cati
on
ofani nventi
on.Asani nnovatortheent r
epreneurassumest herol
eofapioneer
andani ndustri
alleader.Theent r
epreneurcanunder takeany onet
ypeofthe
foll
owingf i
vecategoriesofinnovation:
 Thei nt
roducti
onofanewgoodoranewqual i
tyofagood
 Thei nt
roducti
onofanewmet hodofproduct i
on
 Theopeni ngofanewmar ket
 Theconquestofanewsour ceofsupplyofr awmat eri
als
 Thecar ry
ingoutofanewor ganizati
onofanyi ndustry

I
mpor
tanceofEnt
repr
eneuri
nEconomi
cDev
elopment
:

Everycount r
yt r
iestoachi
ev emaximum economicdevel
opment .Theeconomic
developmentofacount r
ytoal ar
geextentdependsonhumanr esources.Buthuman
resourcealonewi ll
notproduceeconomicdevelopment-
ther
emustbedy namic
entrepreneurs.I
mpor t
ance’sofentr
epr
eneursineconomicdevelopmentare:

(
1)EmploymentGenerat
ion:
Gr owingunempl oymentpar t
icul
arlyeducated
unemploy
menti sanacut
epr oblem ofthenat i
on.I
fahundr edper sonsbecome
entr
epr
eneurtheynotonl
ycr eateahundr edj obsforthemselvesbutal sopr ovi
de
employmenttomanymor e.Theseent erprisesgrowpr ovi
dingdirectandi ndir
ect
employmenttomanymor e.Thusent r
epr eneurshipisthebestwayt ofighttheevi
l
ofunemployment.

(
2)National Income:Nat ional I
ncomeconsi stsofgoods&ser vi
cesproducedinthe
count ryandt hoseimpor ted.Thegoods&ser vi
cesproducedar ef
orconsumpt ion
withint hecountryaswel l astomeetthedemandofexpor ts.Thedomest i
c
demandi ncreaseswi thev erincr
easi
ngpopul ati
onandstandardoflivi
ng.The
expor tdemandal soi ncreasest omeett heneedsofgrowingimportduet ovari
ous
reasons.Ani ncr
easingnumberofent repreneursarer
equiredtomeett hi
s
i
ncr easingdemandf orgoodsandser vices.Thusentr
epreneurshi
pincreasesthe
national i
ncome.

(
3)DispersalofEconomi cPower :Whenasoci etyproducesasmal l numberof
entrepreneur
stheent erpri
seduet olackofcompet i
ti
ongr owintoaf ewbig
businesshouses.Thi sresultsinconcentrati
onofweal thinafewf amil
ies.Thi
s
canhav easer i
oussoci alandnat i
onalimplicati
on.Whent henumberof
entrepreneur
sincreases,al argeamountofnat i
onalwealthisalsoshar edbya
l
argenumberofent repreneurs,thusdispersingwealth.Thi
sdisper salofwealt
h
promot estherealsociali
sm andmakest heeconomyheal thy.

(
4)Bal
anceRegi
onal
Dev
elopment
:Thegr
owt
hofi
ndust
ryandbusi
nessl
eadst
oa
10
l
argenumberofpubli
cbenef
it
sliker
oad,t
ranspor
t,heal
th,
educat
ion,
enter
tai
nmentetc.Ar
api
ddevelopmentofentr
epr
eneurshi
pensuresabal
anced
regi
onaldev
elopment
.When

11
 thenewentrepreneur
sgrowataf asterpace,i
nv iewofthei
ncreasi
ng
competi
ti
oni nandaroundthecit
ies,theyaref
or cedt
osetupt hei
rent
erpr
isei
n
thesmal
lertownsawayf rom bi
gciti
es.Thishelpsinthedevel
opmentofthe
backwar
dr egions.

(
5)Economi cI
ndependence:Entr
epreneurshipisessenti
alfornat
ional
self-
rel
i
ance.
Businessmanexportgoodsandser vicesonal argescal
eandear nthescar
ce
forei
gnexchangeforthecountry.Suchimpor tsubst
itut
ionandexport
promotionhel
ptoensuret heeconomi cindependenceofthecountry.

(
6)ImprovementinLivi
ngSt andar
ds:Entr
epreneurssetupindustrieswhichremove
scarci
tyofessenti
alcommodi ti
esandintroducenewpr oducts.Producti
onof
goodsonmassscal eandmanuf actur
ehandicraf
tsetc.inthesmal lscal
esect
or
helptoimprovethestandardofli
feofacommonman.Theseof f
ergoodsat
l
owercost sandincreasevari
etyinconsumpt i
on.

(
7)HarnessingLocal l
yAv ail
ableResourcesandEnt r
epreneurship:I
ndiaisconsi
dered
tobev eryrichinnaturalresources.Afewl argescaleindustri
esstart
edby
entrepr
eneur sfrom outsi
det hestateineconomi call
ybackwar dareasmayhel p
asmodel sofpi oneeri
ngef fort
s,butulti
mat elyt
hereal st
rengthof
i
ndust r
ial
izationinbackwar dareasdependsupont heinvolvementoflocal
entrepr
eneur shipinsuchact i
vi
ties.I
ncreasedact i
vi
tiesoflocalentr
epreneur
swi l
l
alsoresulti
nmaki nguseofabundant lyavailabl
elocal r
esources.

(
8)Innovati
onsinEnterpri
ses:Busi
nessenterpri
sesneedt obeinnovati
vef orthei
r
survi
valandbett
erper for
mance.Entrepr
eneur shi
pdevelopmentprogramsar e
aimedatacceleratingthepaceofsmal l
firms' gr
owthinIndi
a.I
ncreasednumber
ofsmal lf
ir
msisexpect edtoresul
tinmor einnovati
onsandmaket heI ndian
i
ndust r
ycompetei nint
ernati
onalmarket
.

CausesOfSuccessandFai
l
ureofEnt
repr
eneur

Anentr
epr
eneurmaysometi
mebecomesuccessful andsometi
mebecomesf
ail
ure.
Ther
earesomecausesofsuchsuccessandf
ail
ure.Theyarenot
edbel
ow:

1. Sel ecti
onofbusiness:
Itisanimport
antaspect
.Thatmeansanentrepr
eneurhas
todeter
mi newhatt
ypebusi nessheisgoi
ngtostart
.For
mv ar
iouspoi
ntsofviewthe
feasi
bil
i
tyofthebusinessshouldbetest
ed.

2. Pr operpl
anni
ng:Properpl
anningmesalsoimport
ant
.Forpl
anni
ng,
planni
ng
premisesli
kepol
it
ical
,economi
c,socialpr
emi
sedshoul
dbeconsi
deredf
ir
st.Thest
eps
ofplanni
ngshoul
dbef oll
owedproperl
y.

3. I ni
ti
alcapi
tal:i
fthei
nit
ial
capi
tal
sar
enotanoptimal l
evelt
heorgani
zat
ionwoul
d
fal
l.Sowhethertheenter
pri
seisbi
gorsmal
lthei
nit
ialcapit
alshoul
dbesuff
ici
ent
enough.

12
4. Deter
minat
iono0fmarketdemand:Thr
oughresear
chthedemandinthemarket
shoul
dbei
denti
fi
ed.Bot
hforlongter
m andshor
ttermitshoul
dbeconsi
dered.

13
5. Mar ket
ingofproduct
:Ift
hepromoti
onpol
icy,channel
ofdest
it
uti
on,
tr
anspor
tati
onisnotgoodtheent
erpri
sewoul
df al
l
.

6. Educat ionandexperi
ence:Oneoftheimport
anttasksoft
heentrepreneur
sisto
selectri
ghtpersonf
ortheri
ghtpostbecausethesuccessofanent
erprisedependson
therightsel
ecti
onofemployees.

7. Joi nti
nit
iati
ve:
Onemayhav emuchmoneyandanot hermayhav emoremeri
t.
Throughjoi
ntini
ti
ati
veitcanbebal
anced.Butsometimeforjoi
nti
nit
iati
ve
misunderst
andingari
se,orsomet
imescorrupt
ionoccurwhichmayresulti
nfal
lof
enter
pri
se.

8. Employment:Recrui
tmentandappoi nt
mentshoul dbepr oper
lydone.Those
whohavespecial
izedski
llshouldbeappointedtothatspecial
i
zedjob.I
neff
ici
ent
,
cor
rupt
edemployeesmayber esponsi
blef
orfall
ofbusiness.

9. Locationofbusi ness:Si
teselect
ionisanimportantfactor.Whi
l
est art
inganew
busi
ness,
anent repreneurshouldthi
nkaboutthelocati
onoft hebusiness.I
nt hi
scase,
manyfact
or sshouldbeconsi der
edsuchasav ail
abil
it
yofr awmat er
ial
s,proper
communicationsystem, av
ail
abil
it
yofl abor
,market
ingfacili
ti
esandsoon.

10.Quali
ti
esofmanagement:
Themanagementmusthav
eami
nimum qual
i
tyt
o
successother
wisei
twoul
dfal
l.

Thesearethecommoncausesf
orwhi
choneent
erpr
isemaybecomesuccessf
uland
anothermayfal
l.

Meani
ngandDef
ini
ti
onofEnt
repr
eneur
shi
p

Economi cdevelopmentessential
lymeansapr ocessofupwar dchange.I tcanbedef i
ne
asapr ocesswher ebyther ealpercapi t
aincomeoft hecount ryincreasesov eral ong
peri
odoft ime.ConceptEnt repreneurshi
pist het endencyofaper sont oor ganizethe
busi
nessofhi sownandi trunapr ofit
abl
y,usingt hequal i
tyofl eadershi
p,deci si
ons
making and manager ial cal i
beret c. The t erm ent r
epreneurshipi s often used
i
nterchangeablywit
hentrepreneurshi
p.Butconcept uall
ytheyaredifferent

Meani
ngofEnt
repr
eneur
shi
p

Entrepreneurshiprefer
st oaprocessofactionanent r
epreneurunder t
akest oestabli
sh
hi
sent erpri
se.I ti
sacreat i
veandinnovat
iveresponsetot heenv i
ronment .Inot her
wordsent repreneurshi
pcanbedef i
nedasanabi li
tytodiscover,createori nv ent
opportuniti
esandexpl oitthem t
othebenefitofthesociety,whichint urnbr ings
prosperit
yt otheinnovatorandhisorgani
zat i
on.
B.Hi ggins,i
nhisbook" TheeconomicDev elopment "hassaid." Entrepreneurshi
p
i
smeantt hef uncti
onofseekinginvestmentandpr oducti
onoppor tunity
,or ganizingan
14
ent
erpr
iset
o

15
undert
akeanewpr oductionprocess,r
aisi
ngcapi
tal,
hiri
nglabor
,ar
rangi
ngthesuppl
y
ofrawmat eri
als,
findingsite,i
ntr
oduci
nganewt echniqueandcommoditi
es,
di
scoveringnewsour cesofr awmat er
ial
sandselect
ingtopmanagersofdaytoday
operat
ionsoftheent erpr
ise."

Accor
dingt
oS.S.kanaka“
Ent
repr
eneurshi
psisaprocessi
nvolv
ingvar
iousact
ionst
o
betakentoestabl
i
shanenterpr
ise”
.

From thefuncti
onalv i
ewpoi ntentrepreneur
shipisdefi
nedast hecombinati
onof
acti
vit
iessuchasper ceptionofmar ketopport
unit
iesgainingcommandov erscar
ce
resourcespurchasi
ngi nputproducingandmar ket
ingofpr oductrespondi
ngto
compet i
ti
onandmai ntai
ningrelati
onwi thpoli
ti
caladministrat
ionandpubli
c
bureaucracyforconcessionlicensesandt axesetc.

Thevar
iousdef
ini
ti
onsofentr
epreneur
shi
pident
if
ytwobasi
cel
ement
sof
ent
repr
eneur
shi
pnamelyinnovat
ionandri
skbeari
ng.

(
1)Innov at i
on:Innov ati
oni sdoingsomet hingneworsomet hingdi f
ferent.
Ent repr eneur sconst antl
ylookoutt odosomet hi
ngdi ff
er entanduni quet omeet
thechangi ngr equirement softhecust omer s.Entrepr eneur sneednotbei nventors
ofnewpr oduct sornewmet hodsofpr oduct i
onorser vice,butmaypossesst he
abilityofmaki nguseoft heinventionsfortheirent erpri
ses.Forexampl e,inor der
tosat isfythechangi ngneedsoft hecustomer s,now- a-daysf rui
tjuice( mango,
fruitset c.
)inbei ngser vedintins,inst
eadofbot t
lessot hatcustomer scancar r
yit
andt hr owawayt hecont ai
nersaf t
erdrinki
ngt hej uice.Rat anTat adi dnoti nvent
aut omobi le.Foreseei ngthepeopl esdesiretohav esmal lcar satlowerpr ice,he
appl iednewmet hodsofmassmanuf acturi
ng, madeuseofnew, lightsand
relativ elycheapermat er
ial
s.Henceent r
epreneurshi pneedst oappl yinv entionson
acont inuousbasi stomeetcust omerschangi ngdemandsf orproduct s.

(
2)Riskbearing: Gi
v i
ngbirthtoanewent erpr
iseinvol
vesr i
sk.Doi ngsomet hi
ngnew
anddifferentisalsorisky.Theent er
prisemayear nprofitorincurloss, which
dependsonv ariousfactorsl i
kechangi ngcustomerpr eferences, i
ncreased
compet i
ti
on, shortageorr awmat eri
alsetc.Anent r
epreneurneedst obebol d
enought oassumet her i
ski nvolvedandhenceanent repreneurisar isk-bearer
notri
sk-av oi
der.Thisrisk-bearingabili
tykeepshi mtot r
yonandonwhi ch
ul
timatelymakeshi mt osucceed.Thought hetermsent repreneurand
entr
epreneur shipareusedi nterchangeable, y
ettheyareconcept uall
ydifferent
.
Therelati
onshi pbetweenent repreneurandent r
epreneurshipar ediscussed
16
bel
ow:

17
Rel
ati
onshi
pbet
weenent
repr
eneurandent
repr
eneur
shi
p:

Ther
elat
ionshi
pbet
weenent
repr
eneurandent
repr
eneur
shi
par
edi
scussedbel
ow

Entr
epr
eneur Ent
repr
eneur ship
1) Ent
repr
eneuri
saper son. Ent
repr
eneur
shi
pisapr ocess.
2) Ent
repr
eneuri
sanor ganizer. Ent
repr
eneur
shi
pisanor ganization.
3) Ent
repr
eneuri
saninnov ator. Ent
repr
eneur
shi
pisaninnov ation.
4) Ent
repr
eneuri
sariskbear er. Ent
repr
eneur
shi
pisariskbear ing.
5) Ent
repr
eneuri
samot i
vator. Ent
repr
eneur
shi
pisamot i
vation.
6) Ent
repr
eneuri
sacr eator. Ent
repr
eneur
shi
pisacr eati
on.
7) Ent
repr
eneuri
savisual i
zer. Ent
repr
eneur
shi
pisavision.
8) Ent
repr
eneuri
saleader . Ent
repr
eneur
shi
pisaleader ship.
9) Ent
repr
eneuri
sanimi tator
. Ent
repr
eneur
shi
pisanimi tati
on.

TheEnt repreneur i
alProcess
A wi der angeoff actorscouldi nfl
uencesomeonetobecomeanent repreneur
,
i
ncludingenv i
ronment al,social,personalones,oracombi nat
ionoft hem.Af terone
decidest obeanent repreneur,therearefourstepsoft
heent
repr
eneur
ialprocesshe/ she
hast ofollow:
1.Spotandassesst heoppor tunit
y.
2.Drawupabusi nesspl an.
3.Establishther esourcesneededandgett hem.
4.Runt hecompanycr eated.

1.SpotandAssessTheOppor t
unity:toi denti
fyanoppor t
unit
yand anal yzeits
potential int erms of :mar ketneeds,compet i
tors and mar ketpot entialand
productl if
ecycle.I tisi mpor tantt he entrepreneurt ot esthi s/herbusi ness
i
dea/ conceptwi thpot enti
alcust omer s,aski
ngi ft heywoul dbuyt hepr oductor
service,doingsomer esearchtof indt hemar ketsizeandwhet herifitisgr owing,
stable orst agnating,f i
nding outabout hi s/ hercompet it
or s strengths and
weaknesses, threatsandoppor tuniti
es.
2.Draw upt heBusi nessPl an:. Thebusi nessplani sani mpor tantpar tof t he
entrepreneuri
alpr ocess.A wel lpl anned business wi llhave mor e chance t o
succeedal ltheot heraspect soft hecompanybei ngequal .Itiscr ucialfort he
entrepreneurtoknowhow t opl anhi s/heracti
onsandl ayoutst rategiesf orthe
businesst obecr eatedorunderexpansi on.

18
19
 3.Establi
sht her esourcesneededandpr ovidet hem:Theent r
epr eneurshoul duse
hi
s/ herplanningabi l
ityandbar gai
ningski l
lstogett oknow t hebestal t
ernati
ves
ont hef i
nanci ngmar ketf ort heirbusiness,thati s,whi chwillof fert hebestcost
benefitrati
o.
4.Runt hef i
rm cr eated:.Runni ngt hecompanycanseem t obetheeasi estpartofthe
entrepreneurialpr ocess,si ncet heoppor t
unityhasbeeni dentified,t hebusi ness
plandev elopedandt hesour ceoff undingprov ided.Butr unni
ngacompanyi snot
as st r
aightforwar d as i tseems.The ent r
epr eneurmustr ecogni ze his/
her
l
imitati
ons,r ecr ui
taf i
rstr atet eam tohel pmanaget hecompany ,implementing
acti
onst omi nimi z
epr oblemsandmaxi mi zepr of
its.Thati s,t hef irm hast o
produce mor e,wi t
ht he f ewestr esourcespossi ble,combi ning ef fi
ciencyand
effi
cacy .

Emer
genceofEnt
repr
eneur
ial
Class/Ev
olut
ionofEnt
repr
eneur
shi
p

Hi
storyofentr
epr
eneurshi
pandemer genceofent
repreneur
ialcl
assinIndi
amaybe
pr
esentedintwosect
ionsviz.ent
repr
eneur
shi
pduringpre-i
ndependenceandpost
-
i
ndependence.

(
1)Entrepr eneur shipdur ingpr e- i
ndependence:I nt heex cav ati
oni nHar appanand
Mohanj odar ot hehandcr afti t
emsandmet almol dedi temswer ef ound.I tisal so
found t hatt hecr af tsmenoft het imemade,handi cr afti t
emsaspar toft hei r
contribut i
ont ot hesoci etyi nwhi cht heyl i
v ed.Theent repreneur shipt omake
handicr afti temsexi sted i nIndi aar ound2500B. C.Peopl edev elopedt hei rown
socialsy stem andv i
llageeconomy i nI ndia.I ndiaal sodev elopedcast -based
divi
sionsofwor k,whi chhel pedi nt hedev elopmentofski ll
sofar ti
sans.
Thear ti
sansi ndif ferentpar tsofI ndiagr oupedt ogetheranddev elopedt hei rown
arti
factsandwer ewel lknownf ort heirqual it
y.Theci tiesl ikeBanar as,Gay a,Pur i
,
All
ahabadandMi rz apur , whi chwer eont hebanksofGangaRi v er,est abl i
shedt hei r
ownt y peofhandi craft swor k.Ther oyalpat ronagebyt hel ocalki ngsoft hatper iod
helpedar tisani ndust riest of lour i
sh.Thehandi craftsi ndust ryoft het imewas
basicallyski l
l basedandst ar t
edast i
nysect or.
Thepopul ationi nI ndi agr ewi nt hemi ddl eageandspr eadt ot hef ullgeogr aphi cal
area.Thel ocalki ngsgav epat ronaget ot hehandi cr af t
s,si lk,cot ton-war eand
developmentofot hercot tagebasedi ndust r
iesf orconsumpt ionofhi ghersect ion
oft hesoci et y.Thedev elopmentofagr iculturepr oduct sl i
kespi ces,Ay urv edic
medi cinesal sof l
our ishedi nsomepar tsoft hecount r yandst artedexpor tt hem.
Spicesf r
om ker al
a,Cor ahf rom Bengal ,Shawl sf rom Kashmi randBanar as, br ass
and Bi dr i
war e,Si l
kf r om Nagpurand My sor e enj oy ed pr est i
gi ous st at us i n
i
nternat ionalmar kett illear liery ear sof 18t h cent ury .Thecr aftsmengat her ed
togetheri nhal l
s,whi chwer ecal led‘ Kar khanas’ .
Unfortunat elyt hepr est igiousI ndi anhandi craft sindust r i
eswhi chwer ebasi callya
cottageandt i
nysect ordecl inedatt heendof18t hcent ur y,becauseoft he
foll
owi ngr easons.
 Di sappear anceofr oy al pat r
onaget ot hehandi cr aft
s
 Lukewar m at titudeofBr i
tishcol onial towar dsI ndiancr af t
s
20
 Imposi
tionofheavydut
yonimport
sofIndi
ancr
aft
s
 LowpricedBri
ti
shmadegoods
 Changesinthetast
esandhabi
tsofdev
elopi
ngI
ndianci
ti
zenset
c.

21
 I
notherwor dsEastI ndiaCompanyhandi cappedI ndiancot t
ageandt i
ny
sectors.Thecompanyi nj
ect edv ar iouschangesi ntheI ndi aneconomyby
exportingrawmat erial sandi mpor toff i
nishedgoodsi nI ndia.‘Par sis’establi
shed
goodr eportwi t
hcompany .Thecompanyest ablishedt hef irstshi pbuil
di ng
i
ndust ryinSur athandf rom 1673Par sisst artedmanuf act uringv essel sforthe
company .I
n1677Manj eeDhanj eewasgi vent hecont ractofbui ldingl argegun-
powder -mil
l i
nBombay .In1852aPar siforemanwhowaswor kingi nt hegun
factorystartedst eel indust ryi nBombay .Thati stosayEastI ndiaCompanymade
somecont ri
but iont owar dent repr eneur i
al growt hinIndi a.
Theact ualemer genceofmanuf acturingent erpr isecanbenot i
cedi nthe
secondhal fofni net eent hcent ury .In1854Cowasj eeNanabhoyst ar t
edt exti
lemi l
l
atBombay ,R.Chot elalst artedt ext i
lemi llin1861i nAhamdabad,andi n1880
Nawr ojeeWadi aopened ami lli nBombay .Jamshadj eeTat aest ablishedfirst
steelindustryi n1911.Thoughl at e,othercommer cialcommuni tynamel yjains,
vaishyaschangedt hei rat tit
udef rom commer ci
alent repr eneur shipt oi ndustr
ial
entrepreneurshi p.The‘ swadeshi ’campai gnpr ovi
dedaseedbedf orinculcati
ng
anddev el
opi ngnat ional i
sm i nt he count ry.Jamshadj eeTat awasi nf
luencedby
thisandnamedhi sf irstmi ll‘swadeshimi ll’
andKr ishnai ni tsadv er ti
sementmade
the appeal“ ourconcer ni sf i
nanced by nat i
ve capi taland i s undernat i
v e
managementt hroughout ”.

Aft
erthef i
rstwor l
dwart heI ndiansagr eedt o‘ discriminat
ing’pr otecti
on t o
certainindustriesandmadecompani esshoul dber egi steredinIndiawi thrupees
capitalandhav eapr opor t
iontheirdirectorsasI ndians.Thesemeasur eshel pedi n
establishi
ng andext endingt hefactorymanuf acturingi nI ndi
adur i
ngt hef ir
stf our
decadesof20th cent uryduringwhi cht her elati
vei mpor tanceofPar si sdecl ined
and Guj arati’s,Mar awar i
s,and Vai shyas gai ned t heiri mportance i nI ndi a’
s
entrepreneurialscene.The emer gence ofmanagi ng agencysy stem t ri
gger ed
Indi
anent repr eneur ship.In1936Car r,Tagor e&Coassumedt hemanagementof
Calcuttasteam t ugassoci at
ion.Dwar akanathTagor eencour agedot her stof or m
j
oint-stockcompani esi nwhichmanagementr emainsi nt hehandsof‘ fi
rm’ rather
than ‘indi
vidual ’.The Eur opean managementagencyhouses,af terEastI ndia
Companyl oosi ngi t
smonopol yent eredbusi ness,t radeandbanki ng.I tisst ated
thatthemanagi ngagencyhouseswer ether ealent repreneur sandt heseagency
housesemer gedt oov ercomet hel imi t
ationsi mposedbyshor t
ageofv ent ure
capitalandent repreneur i
alacumen.

(
2)Entr
epreneur shipduringpost -
independence:I n1948I ndi
an government came
for
war dwi t
ht hef i
rstIndustr
ialpolicy,whichwasr evi
sedfrom ti
met oti
me.The
governmenti denti
fi
ed the responsi bil
it
yoft he stat
et o promote,assi
stand
devel
opi ndust r
iesi
nt henationalinterestandrecogni
zedtheroleofpri
vat
esector
i
naccel erat
ingindustrialdev
elopment .
Thegov ernmentt ookt hr
eeimpor tantmeasur esnamely:

 Tomaintai
naproperdistr
ibuti
onofeconomicpowerbet
ween
pr
ivat
eandpubli
csector.
 Toencouragei
ndust
ri
alizati
onfrom ex
ist
ingcent
erst
ootherci
ti
es,

22
t
ownsandv
il
lages.

23
  Todisseminat
etheent
repreneurshipacumenconcentr
atedina
fewdominantcommuniti
estoal argenumberofindust
rial
l
y
potent
ial
peopleofv
ari
edsoci al
state.

Toachi evet his,gov er nmentaccor dedemphasi sondev elopmentofsmal lscal e

i
ndust riesint hecount rybypr ovidingv ariousi ncentivesandconcessi onsi nt hef orm of
capi t
al,techni calknow- howmar ket sandl andt otheent r
epr eneur si nt hepot enti
alar eas
tor emov et her egi
onali mbal ancesi ndev el opment .Tof acili
tatet henewent r
epr eneur sin
settingsupt hei renter pri
ses, Gov ernmentest ablishedsev eralinst i
tut i
onsl ikeDi rect orate
ofI ndust ri
es,Fi nanci alCor por ations,smal lscaleindustriescor por ations, smal lindust r
y
serv i
cei nstituteset c.Becauseoft hissmal l
-scaleuni t
semer gedv eryr apidl yandt heir
numberi ncr easedf rom 1, 21, 619i n1966t o1, 90,727i n1970.Ther ear eal soexampl es
thatsomeent repr
eneur sgr ew f rom smal lt omedi um-scal eandf rom medi um t ol arge
scal emanuf act uri
nguni t
sdur ingt heper i
od.
Wi t
ht hei nv
ent ionofdi gital comput er ,
informationt echnologyer astartedi n1970.
IBM wasoneoft hepi oneer si nt hisf ield.Thesof twaredev elopment scr eat
ednew
oppor tuniti
esandt heser vicei ndust riesst artedgr owingf astert han manuf act ur i
ng
i
ndust ryaf ter1980.The hi ghgr owt hofnewi ndustri
esal sohadhi ghr isks.Thenewt op
rated ent repr eneurshi p oppor tuni ti
es ar ose such as communi cat i
on,f ood ser vi
ces,
enter t
ainment ,mer chandi sing, cosmet ics, andappar elwitht heelect roni ccommuni cat i
on
reducing t he di st
ances t o a Gl obalVi llage.The mar ketsi zei s gr owi ng and t he
entrepreneurhast obenchmar khi mselfwi tht hegl obalstandar ds.

Bar
ri
erst
oEnt
repr
eneur
shi
p

Alar
genumberofentr
epreneur
sparti
cul
arlyint
hesmallenter
pri
sesfail
duetosever
al
pr
oblemsandbar
ri
ers.Thegreat
estbarr
iertoent
repr
eneurshi
pisthefai
lur
eofsuccess.

Kar
l.H.Vesperhasi
dent
if
iedt
hef
oll
owi
ngent
repr
eneur
shi
pbar
ri
ers:

1.Lackofav i
ableconcept
2.Lackofmar ketknowl edge
3.Lackoft echnicalskil
ls
4.Lackofseedcapi tal
5.Lackofbusi nessknowhow
6.Complacency —l ackofmot i
vation
7.Socialsti
gma
8.Timepr esenceanddi stracti
ons
9.Legalconstraintsandr egul
ations
10.Monopol yandpr ot
ect ioni
sm
11.I
nhibi
t i
onsduet opat ents

24
 Theor
iesofEnt
repr
eneur
shi
p

Mai
ntheor
iesofent
repr
eneur
shi
par
esummar
izedasf
oll
ows:

(1) Entrepreneur
shi
p:AFunct ionofInnovati
on:JosephA.Schumpet er(1934),fort
he
fi
rstt
ime,putt hehumanagentatt hecent
r eofthepr ocessofeconomi cdev el
opment
and assigned a cri
ticalrol
et othe entrepr
eneurshipi n hist heory ofeconomi c
devel
opment .Heconsideredeconomicdevelopmentasadi scr
etetechnologicalchange.
Theprocessofdev el
opmentcanbegener al
izedbyfivediffer
enttypesofev ents:

(
i) Fi r
stly,i
tcanbet heoutcomeoft heint
roducti
onofanewpr oducti
nthemar
ket
.
(
ii
) Secondl y ,i
tcanbet her
esultofanewpr oducti
ontechnology.
(
ii
i) Thirdly
,itmayariseonaccountofanewmar ket
.
(
iv) Fourthl
y,itmaybet heconsequencesofanewsour ceofsuppl y.
(
v) Fi f
thly,i
tmaybeduet othenewor gani
zati
onofanyi ndustr
y.

Accor
dingt
oSchumpet
er

(i
) Dev elopmenti snotanaut omat icpr ocess,buti
tmustbedel i
beratelyandacti
vely
promotedbysomeagencywi thinthesy stem,Schumpet ercall
edt heagentwho
i
niti
atest heabov echangesasanent repreneur.
(i
i) Hei stheagentwhopr ovideseconomi cl
eadershipthatchangest heini
ti
al
conditi
onsoft heeconomyandcausesdi sconti
nuousdy namicchanges.
(i
ii
) Bynat ure,heisneithertechnician, noraf i
nanci
er,butheisconsi deredaninnovator
.
(i
v) Ent repreneurshipi
snotapr ofessionoraper manentoccupationandt heref
ore,i
t
cannotformul ateasocial cl
assl i
kecapi talist
s.
(v) Psy chological,
entrepreneur sarenotsol el
ymotivatedbypr of
it
.

(2) Ent repreneurshi

p:AnOr ganizat
ionBuildi
ngFuncti
on:Fredr
ickHarbi
sonstatest
hat
the '
or ganizati
on buil
ding'abi l
it
yi st he mostcrit
icalski
llneeded f
ort he i
ndustr
ial
development .According to him entrepr
eneurshi
p means t he skil
lt o bui ld an
organizati
on.Har bisonspot st hecr uxoft heentr
epreneur
shipinhisabil
i
tytomul t
iply
himselfbyef fecti
velydelegat
ingr esponsi
bil
iti
estoother
s.Themai nf
eatur
esare:

(i
) Unl ike Schumpet er, Har
bison's entrepreneur i
s not an i nnovator but an
'
organi
z at
ionbui l
der'whomustbeabl etohar nessthenewi deasofdif
fer
entinnovators
totherestoft heorgani
zat i
on.
(i
i) Suchper sonsarenotal wayst hemenwi thideasormenwhot rynew
combinationsofr esourcesbuttheymaysi mpl ybegoodl eadersandexcel
lent
admini
st r
ators.
(i
ii
) Har bison'sdefi
nit
ionofent r
epreneurshiplaysmorestressonthemanagerialskil
l
s
andcreativi
tysof arasor gani
zat
ionisconcer ned.

(3) Entr
epreneurshi
p: AFuncti
onofManager i
alSkil
landLeadershi
p:Hosel
i
tzstates
thata personwho i st o becomean i ndust
rialentrepr
eneurmusthave
addi
ti
onalpersonal
it
ytrai
ts.I
nadditi
ontobeingmot i
vatedbytheexpect
ati
onsofprofi
t
hemustalsohav esomemanager ialabi
l
iti
esandmor eimportanthemusthaveabil
i
tyto
25
l
ead.Hosel
i
tzmai
ntai
ns

26
thatfinancialski l
ls hav e only a secondary considerati
on inent
repr
eneur
shi
p.
According t o hi m manager i
alskil
l
s and leadershi
p aret he i
mpor
tantfact
s of
entr
epr eneurship.Hei denti
fi
esthreety
pesofbusinessl eader
shi
pinthe anal
ysi
s of
economi cdev el
opmentofunderdev el
opedcountri
es:
□ Themer chantmoneyl endert
ype
□ Themanager ialt
ype
□ Theent r epreneurtype.

(4) Entr
epreneurship:A Funct ionofHi ghAchi evement :McCl ell
andst atest hata
busi
nessmanwhosi mplybehav esi ntraditi
onalway sisnotanent repreneur .Moreov er,
entr
epr eneuri
alr ol
eappear stocallf ordecisionmaki ngunderuncer tainty.McCl elland
i
dentifi
edt wochar acter
isticsofent repr
eneur shipfir
stly"doingt hingsinanewandbet t
er
way"and secondl y"decisionmaki ngunderuncer t
ainty"
.Per sonswi t
hhi ghachievement
wouldt akemoder aterisks.Theywoul dnotbehav et raditi
onal l
y( no r i
sk).Thehi gh
achi
ev ement i s associ ated with betterper formanceatt askswhi ch requir
esome
i
magi nat i
on,ment al mani pulat
ionornew way sofput ti
ngt hingst oget her,andsuch
peopledobet t
erat nonr outi
ne t askt hatr equir
esomedegr eeofi nit
iati
veorev en
i
nventiveness.Peopl ewi thhi ghachi evement ar enoti nfl
uencedbymoneyr ewar das
compar edt opeoplewi t
hl owachi evement .Peopl ewi t
hl owachi evementar epreparedt o
work har derf ormoney orsuch ot herext ernalincent i
ves.Forpeopl e wit
h hi gh
achi
ev ement ,profi
tisameasur eofsuccessandcompet ency .

(5) Entr
epr eneur ship:AFunct ionofSoci al ,Pol it
icalandEconomi cst r
uctur e:John
Kunkelst at
est hatt hei ndust rialent repr eneur shi pdependsuponf ourst ructureswhi ch
arefoundwi thinasoci etyorcommuni ty.
(i
) Limit
at i
on St ructure:The soci et yl imi ts speci fic act ivi
ti
es t o member s of
parti
cul arsubcul tures.Thi slimi tationst ruct ureaf fectsal lt
hemember sofasoci et y
.
(i
i) DemandSt ruct ure:Thel imi tati
onst r
uct ur ei sbasi call
ysoci alandcul t
uralbutt he
demandst r
uct urei smai nlyeconomi c.Thedemandst ructureisnotst atic,andchanges
witheconomi cpr ogr essandgov ernmentpol i
cies.Demandst ruct urecanbei mpr ovedby
providingmat erialrewar ds.
(i
ii
) Oppor t
uni tiesSt ruct ure:Thi sst ruct urei snecessar ytoi ncreaset hepr obabi li
tyof
entrepreneurialact ivity.Theoppor tunityst ructur econst i
tutest heav ai
labili
tyofcapi tal
,
management and t echnol ogicalski l
ls,i nfor mat ion concer ningpr oduct i
onmet hods,
l
abour s and mar ket s.Al lt heact i
viti
esassoci ated wi t
ht heef fect
ivepl anni ng and
successf uloper ationofi ndust r
ial enterpr ises.
(i
v) Labor sSt ruct ur e:Kunkel arguest hatt hel abor ssuppl ycannotbev iewedon
parwi t
ht he suppl y ofot hermat erialcondi tions l ike capi tal.Hest atest hatl abors
means ' men'andi saf unct i
onofsev eralv ariables.Thesuppl yoff act oryl aborsi s
gover nedbyav ai l
abl eal ternativemeansofl ivelihood,t raditi
onal ism andexpect at i
onsof
l
ife.

(6)Entrepreneurship:'InputCompl et
ing'and 'Gap f i
ll
ing' Funct i
on: Li ebenst
ein
i
dentif
iedgapf il
lingasani mportantcharact
eri
sti
cofent repreneur
ship.Ineconomi c
theor
yt hepr oduct i
onf unct
ionisconsi der
edtobewel ldefinedandcompl et
elyknown.
Butthet heoryissi l
entaboutt hekeeperoftheknowledgeofpr oducti
onf uncti
on.Where
andtowhom i nt hef i
rmt hi
sknowl edgeissupposedtobeav ai
l
ableisnev erstat
ed.I
tis

27
theent
repreneur
ialfuncti
ontomakeupt
hedef
ici
enci
esort
ofi
l
lthegaps.Thesegaps
ari
sebecausealltheinput
sinthe

28
productionfuncti
oncannotbemar ketedbecausesomei nputsli
kemot ivat
ion,l
eader
shi
p
etc.arev agueintheirnatur
eandwhoseout putisunderminate.This"gap-fi
l
li
ng"act
ivi
ty
gi
v esriset oamosti mportantentrepr
eneurialf
unctionnamely"Input-
Compl eti
ng"
.He
hastomar shalal
ltheinputstoreal
izefi
nalproducts.

(7) Ent r
epreneurshi p:AFunct ionofGr oupLev elPat t
ern:Fr ankW.Youngwasr eluctant
toacceptt heent r
epr eneurialchar acteristi
csatt hei ndividuallevel
.Accor di ngt ohi m,
i
nsteadofi ndi
vidual,onemustf i
ndcl ust erswhichmayqual i
fyi
tsel
fasent r
epreneur ial
groups,as thegroupswi t
hhi gherdi ff
er enti
ati
onhav et hecapaci tytor eact.Hedef i
ned
'
reacti
veness'orsol idarit
y'ast hedegr eet owhi cht hemember soft hegr oupcr eat e,
maintai
nandpr oject acoher entdef initi
onoft heirsituation;and' diff
erentiati
on'i s
defi
nedast hediversity,asopposed t ocoher ence,oft hesoci almeaningsmai ntai
nedby
thegroup,whenagr ouphasahi gherdegr ee ofinstit
utionalandoccupat i
onaldi versity,
rel
ati
vetoitsaccept ance, i
ttendst ointensifyit
sinternalcommuni cat
ionwhi chgi v
esr ise
toaunifi
eddef i
nit
ionoft hesituation.

20