1

M.R.D.E.-004
ENTREPRENEURSHIP
AND RURAL DEVELOPMENT
Disclaimer/Special Note: These are just the sample of the Answers/Solutions to some of the Questions given in the
Assignments. These Sample Answers/Solutions are prepared by Private Teacher/Tutors/Authors for the help and guidance
of the student to get an idea of how he/she can answer the Questions given the Assignments. We do not claim 100%
accuracy of these sample answers as these are based on the knowledge and capability of Private Teacher/Tutor. Sample
answers may be seen as the Guide/Help for the reference to prepare the answers of the Questions given in the assignment.
As these solutions and answers are prepared by the private Teacher/Tutor so the chances of error or mistake cannot be
denied. Any Omission or Error is highly regretted though every care has been taken while preparing these Sample Answers/
Solutions. Please consult your own Teacher/Tutor before you prepare a Particular Answer and for up-to-date and exact
information, data and solution. Student should must read and refer the official study material provided by the university.
Long Answer Questions
Attempt any One of the following:
Q. 1. Why is it so very important to unleash rural entrepreneurship? Also briefly discuss what steps
should be taken to promote rural entrepreneurship.
Ans. The last three decades have seen major shifts in rural economies. Rural enterprises are important generators
of employment and economic growth internationally. It is important to stress that rural entrepreneurship in its
substance does not differ from entrepreneurship in urban areas. Entrepreneurship in rural areas is finding a unique
blend of resources, either inside or outside of agriculture.
We attempted to understand the role played by rural enterprises in economic development and how governing
bodies can help to foster its growth. The promotion of entrepreneurship and the understanding where entrepreneurship
comes from is as equally important as understanding the concept of entrepreneurship. The environment which is
considered most favourable for their growth forms the basis for the development of policies for entrepreneurship.
Policy implications for rural entrepreneurship development can be summarized as:
(a) Sound national economic policy with respect to agriculture, including recognition of the vital contribution
of entrepreneurship to rural economic development.
(b) Policies and special programmes for the development and channeling of entrepreneurial talent.
(c) Entrepreneurial thinking about rural development, not only by farmers, but also by everyone and every
rural organization.
(d) Institutions supporting the development of rural entrepreneurship as well as strategic development alliances.
However, despite their phenomenal growth rural enterprises have common systemic constraints to their
development. Governments and donors can help to address these constraints by facilitating efficient and unbiased
financial markets; a suitable business environment; education, training, and competitive capacity; and access to
information, networks and the global market.

2
 Government Measures Aimed at Reducing Rural to Urban Migration: Migration is the movement of people
from one place to another due to various motivations such as search of employment, educational facilities, etc.
Excessive rural to urban migration has led to negative impacts on Indian states overall development as it has led to
the growth of slums, unemployment, etc. The costs associated with rural-urban migration often outweigh the benefits,
leading to excessive urbanization. Therefore, discusses the measures that governments in Africa can take to curb
this trend.
Improvement of the rural subsistence sector: Governments should take measures to improve the subsistence
sector, so as to raise rural incomes and reduce the rural to urban gap. The first step to improve the economic
performance of this sector is the introduction of new forms of village organization. At the moment villages in some
Indian states are widely scattered vast areas and in most cases too small to form viable economic units. They should
regrouped into larger units to facilitate easy delivery of infrastructure, agricultural inputs, and other services. This
form of organization should be based on cooperative effort and self management. The new units should be established
in areas with high agricultural potential.
Establishment of basic social and economic Infrastructure: This involves the construction of feeder roads
to ease the transport of agricultural raw materials to processing industries, construction of schools and medical
services in rural areas. In addition to this, agricultural extension services should be developed and provided in rural
areas.
Provision of credit facilities: There should be provision of credit facilities in rural areas. The existing agricultural
financing organizations should devote most of their resources to finance new rural production units. To ensure that
rural production is properly marketed, there is a need to establish effective marketing organizations possibly on a
cooperative basis to distribute inputs such as seeds, fertilizers and equipments and to buy the produce.
Promotion of non-farm income sectors in rural areas: Recent research points out that the non-farm sector is
already an important source of income to rural households, and that different types of activities appear to be of
differing relevance to the poor. Agricultural wage labour and non-agricultural casual wage labour comprise an
important source of income to the poorest quintiles, while non-agricultural regular employment is associated with
the richest quintiles. Self-employment appears particularly important to the middle quintiles. This pattern suggests
that the non-farm sector can potentially function as both a route out of poverty and as a safety net, preventing the
poor from falling deeper into poverty and in the long-term engaging in rural to urban migration.
Local economic development: Economic development in small towns can have a positive impact on the economy
of the surrounding rural areas, if the increase in purchasing power results in the purchase of agricultural and non-
agricultural products from the surrounding rural areas. This will obviously depend on the types of products produced,
their quality and cost and their competitiveness compared to products from other parts of the country. The development
of the local urban economy may also lead to a reduction in rural-urban migration to the larger urban centres and the
city and redirect migration flows to smaller towns in rural areas.
Urban service centres for rural areas: One of the main aspects of rural poverty is the lack of access to basic
infrastructure and services, such as roads, communication infrastructure, health care, credit, education, and market
information. Governments tend to develop infrastructure and provide services initially in the urban areas only,
because of their economies of scale. The scattered settlement pattern of the rural areas renders the provision of
infrastructure and services too expensive. Urban centre are expected to play a role as service centres for the rural
areas. Towns and secondary cities, therefore, require more investments in infrastructure and services for both the
growing urban population and the population in the surrounding rural areas. However, small towns are also actual

3
or potential destination for rural-urban migration. If they are destination for rural-urban migration, they need improved
urban infrastructure and services in order to reduce urban poverty. If they do not serve as destinations for rural-
urban migration and are by-passed by migrants who move directly to the city, the development of urban infrastructure
and services could help to redirect migration flows to smaller towns in rural areas rather than larger urban areas.
It is important to see which infrastructure and services can be decentralized from urban centres and which have
to be provided locally in the rural areas. The recent developments in the information and communication technology
(ICT) are creating new opportunities for the delivery of services in remote areas. However, it is important to understand
that ICT is only a vehicle for information and that the relevance of the information for the user is the more important
aspect. This applies not only to ICT, but also to other kinds of infrastructure and services.
Poverty Reduction Strategies: Policies that target poverty alleviation influence rural-urban migration. According
to recent research, the South African government has taken significant measures in order to improve education,
access to basic services and sanitation, and access to health services for the poor in rural areas. This strategy has
four components namely:
Expand Employment and Income Earning Opportunities: The majority of the poor in South Africa are
found in the rural areas. Policies promoting rural development, establishing micro-enterprises, developing
microfinance, and improving road infrastructure, are expected to decrease rural-urban migration by improving the
standard of living of people living in the rural areas.
Developing Productive Capacity: Developing productive capacity is synonymous to developing people’s
capacity by addressing health, education, sanitation and housing.
Increase Security and Participation: Protection of the elderly and vulnerability of young people is greatly
considered. Property rights and land tenure are also considered. Securing property rights, especially in rural areas,
would reduce rural-urban migration. In South Africa many rural people still do not have titles to their land. People
would feel secure if they knew that their land legally belonged to them. They would be more productive which
would lead to creation of rural employment opportunities. The more opportunities that are available in the rural
areas, the less migration there would be to the cities.
Promote Participation and Social Integration: This policy is intended to increase the participation of the
majority of people in decision-making, with a special focus on ethnic minorities.
Medium Answer Questions
Attempt any Two of the following :
Q. 1. Discuss Hagen’s Theory on Entrepreneurship.
Ans. An entrepreneur is someone who organizes, manages and assumes the risks of a business or enterprise. An
entrepreneur is an agent of change. Also, entrepreneurs are individuals who recognize opportunities where others
see chaos or confusion.
Entrepreneurship is the process of discovering new ways of combining resources. Entrepreneurship is the act
and art of being an entrepreneur or one who undertakes innovations or introducing new things. These new things can
be any of the start-ups. The most obvious form of entrepreneurship is of starting any new business. Entrepreneurship
relates to the pursuit of risky and innovative business ventures to capture new opportunities. Entrepreneurs are
innovators, willing to take risks and generate new ideas to create unique and potentially profitable solutions to
modern-day problems. Entrepreneurship is not so much a skill as a habitual state of mind. In this chapter, you will
learn who is an entrepreneur. You will be familiar with different theories of entrepreneurship. You will also understand

4
the meaning of innovation and adaptation in entrepreneurship. You will assess the factors responsible for creation of
entrepreneurs and hurdles in making of a good entrepreneur.
E.E. Hagen’s Theory
The theory of social change was propounded by E.E. Hagen. He observed that entrepreneurial development is
based on how a traditional society in which continuing technical progress takes place. Hagen’ stressed on the prime
importance of creative personality for the change from traditional society to a society within modern industrial
economy. He distinguishes between the creative personality and the uncreative personality. He associates the
unrealistic personality with the traditional society as to appears to explained a great deal about its complexities,
which is otherwise not possible. He is of the view that all societies once upon a time were traditional and continue
to remain so because of the traditional authoritarian child rearing practices leading to uncreative personality. Some
societies have changed into ones with modern economies and other have remained to be traditional. These creative
personality in order to restore their status position, long being the cause of anxiety of the group, channelize their
energies mainly to activities from which the elites keep away. In the traditional societies the elites keep away
from the economic activities, considering them to be mundane.
How a traditional society becomes one in which continuing technical progress takes place. The theory exhorts
certain elements which presume the entrepreneur’s creativity as the key element of social transformation and economic
growth. Reveals general model of the social-inter-relationship among physical environment, social structure,
personality and culture. Thinks economic theories are inadequate. Political and social change-catalyst for
entrepreneurs. Rejects follower’s syndrome imitating western technology. Technology is an integral part of socio-
cultural complex. Historic shift as a factor initiates change.
Q. 2. What do you know about Grameen bank?
Ans. Grameen Bank Bangladesh: The Grameen Bank is a Nobel Peace Prize-winning microfinance organization
and community development bank founded in Bangladesh. It makes small loans (known as microcredit or “Grameen
credit”) to the impoverished without requiring collateral. The name Grameen is derived from the word gram which
means “rural” or “village” in the language. Micro-credit loans are based on the concept that the poor have skills that
are under-utilized and, with incentive, they can earn more money. A group-based credit approach is applied to use
peer-pressure within a group to ensure the borrowers follow through and conduct their financial affairs with discipline,
ensuring repayment and allowing the borrowers to develop good credit standing. The bank also accepts deposits,
provides other services, and runs several development-oriented businesses including fabric, telephone and energy
companies. The bank’s credit policy to support under-served populations has led to the overwhelming majority
(96%) of its borrowers being women. Grameen Bank originated in 1976, in the work of Professor Muhammad
Yunus, professor at University of Chittagong, who launched and search project to study how to design a credit
delivery system to provide banking services to the rural poor. Based on his positive results, in October 1983 the
Grameen Bank was authorized by national legislation as an independent bank. In 2006, the bank and its founder,
Muhammad Yunus, were jointly awarded the Nobel Peace Prize. In 1998 the Bank’s “Low-cost Housing Programme”
won a World Habitat Award. In 2011, the Bangladesh Government forced Muhammad Yunus to resign from Grameen
Bank, saying that at age 72, he was years beyond the legal limit for the position. Muhammad Yunus earned a
doctorate in economics from Vanderbilt University in the United States. He was inspired during the Bangladesh
famine of 1974 to make a small loan of US$27 to a group of 42 families as start-up money so that they could make
items for sale, without the burdens of high interest under predatory lending. Yunus believed that making such loans
available to a larger population could stimulate businesses and reduce the widespread rural poverty in

5
Bangladesh.Yunus developed the principles of the Grameen Bank (literally, “Bank of the Villages” in Bengali) from
his research and experience. He began to expand microcredit as a research project together with the Rural Economics
Project at Bangladesh’s University of Chittagong to test his method for providing credit and banking services to the
rural poor. In 1976, the village of Jobra and other villages near the University of Chittagong became the first area
eligible for service from Grameen Bank. Proving successful, the Bank project, with support from Bangladesh Bank,
was extended in 1979 to the Tangail District (to the north of the capital, Dhaka).The bank’s success continued and
its services were extended to other districts of Bangladesh. By a Bangladeshi government ordinance on October 2,
1983, the project was authorized and established as an independent bank. Bankers Ron Grzywinski and Mary
Houghton of Shore Bank, a community development bank in Chicago, helped Yunus with the official incorporation
of the bank under a grant from the Ford Foundation. The bank’s repayment rate suffered from the economic disruption
following the 1998 flood in Bangladesh, but it recovered in the subsequent years. By the beginning of 2005, the
bank had loaned over USD 4.7 billion and by the end of 2008, USD 7.6 billion to the poor. The Bank continues to
expand across the nation. By 2006, Grameen Bank branches numbered over 2,100. Its success has inspired similar
projects in more than 40 countries around the world, including a World Bank initiative to finance Grameen-type
schemes. The bank has gained its funding from different sources, and the main contributors have shifted over time.
In the initial years, donor agencies used to provide the bulk of capital at low rates. By the mid-1990s, the bank
started to get most of its funding from the central bank of Bangladesh. More recently, Grameen has started bond
sales as a source of finance. The bonds are implicitly subsidized, as they are guaranteed by the Government of
Bangladesh, and still they are sold above the bank rate. In 2013, Bangladesh parliament passed ‘Grameen Bank Act’
which replaces the Grameen Bank Ordinance, 1983, authorizing the government to make rules for any aspect of the
running of the bank. The bank is also engaged in social business and entrepreneurship fields. In 2009, the Grameen
Creative Lab collaborated with the Yunus Centre to create the Global Social Business Summit. The meeting has
become the main platform for social businesses worldwide to foster discussions, actions and collaborations to
develop effective solutions to the most pressing problems plaguing the world. Grameen Bank is founded on the
principle that loans are better than charity to interrupt poverty: they offer people the opportunity to take initiatives
in business or agriculture, which provide earnings and enable them to pay off the debt. The bank is founded on the
belief that people have endless potential, and unleashing their creativity and initiative helps them to end poverty.
Grameen has offered credit to classes of people formerly underserved: the poor, women, illiterate and unemployed
people. Access to credit is based on reasonable terms, such as the group lending system and weekly-instalment
payments, with reasonably long-terms of loans, enabling the poor to build on their existing skills to earn better
income in each cycle of loans. Grameen’s objective has been to promote financial independence among the poor.
Yunus encourages all borrowers to become savers, so that their local capital can be converted into new loans to
others. Since 1995, Grameen has funded 90 per cent of its loans with interest income and deposits collected,
aligning the interests of its new borrowers and depositor-shareholders. Grameen converts deposits made in villages
into loans for the more needy in the villages (Yunus and Jolis 1998). It targets the poorest of the poor, with a
particular emphasis on women, who receive 95 per cent of the bank’s loans. Women traditionally had less access to
financial alternatives of ordinary credit lines and incomes. They were seen to have an inequitable share of power in
household decision-making. Yunus and others have found that lending to women generates considerable secondary
effects, including empowerment of a marginalized segment of society (Yunus and Jolis 1998), who share betterment
of income with their children, unlike many men. Yunus claims that in 2004, women still have difficulty getting
loans; they comprise less than 1 per cent of borrowers from commercial banks (Yunus 2004). The interest rates

6
charged by microfinance institutes including Grameen Bank are high compared to that of traditional banks; Grameen’s
interest (reducing balance basis) on its main credit product is about 20%. Grameen Bank is best known for its
system of solidarity lending. The Bank also incorporates a set of values embodied in Bangladesh by the Sixteen
Decisions. At every branch of Grameen Bank, the borrowers recite these decisions and vow to follow them. As a
result of the Sixteen Decisions, Grameen borrowers have been encouraged to adopt positive social habits. One such
habit includes educating children by sending them to school. Since, the Grameen Bank embraced the Sixteen
Decisions, almost all Grameen borrowers have their school-age children enrolled in regular classes. This in turn
helps bring about social change, and educate the next generation.Solidarity lending is a cornerstone of microcredit,
and the system is now used in more than 43 countries. Although each borrower must belong to a five-member
group, the group is not required to give any guarantee for a loan to its members. Repayment responsibility rests
solely on the individual borrower. The group and the centre oversee that everyone behaves responsibly and none
gets into a repayment problem. No formal joint liability exists, i.e. group members are not obliged to pay on behalf
of a defaulting member. But, in practice the group members often contribute the defaulted amount with an intention
to collect the money from the defaulted member at a later time. Such behaviour is encouraged because Grameen
does not extend further credit to a group in which a member defaults. No legal instrument (no written contract) is
made between Grameen Bank and its borrowers; the system works based on trust. To supplement the lending,
Grameen Bank requires the borrowing members to save very small amounts regularly in a number of funds, designated
for emergency, the group, etc. These savings help serve as an insurance against contingencies. In a country in which
few women may take out loans from large commercial banks, Grameen has focussed on women borrowers; 97% of
its members are women. While a World Bank study has concluded that women’s access to microcredit empowers
them through greater access to resources and control over decision making, some other economists argue that the
relationship between microcredit and women-empowerment is less straightforward.
In other areas, Grameen has had very high payback rates–over 98 per cent. However, according to the Wall
Street Journal, in 2001 a fifth of the bank’s loans were more than a year overdue. Grameen says that more than half
of its borrowers in Bangladesh (close to 50 million) have risen out of acute poverty thanks to their loan, as measured
by such standards as having all children of school age in school, all household members eating three meals a day, a
sanitary toilet, a rainproof house, clean drinking water, and the ability to repay a 300 taka-a-week (around 4 USD)
loan.
Short Answer Questions
Write short notes on any Five of the following :
Q. 2. Panchayat Udyogs
Ans Panchayat Udyog refers to a village council in India. It is a former group of five influential older men
acknowledged by the community as its governing body. Panchayat Udyog is an elective council of about five
members organized in the republic of India as an organ of village self-government.
Basically Panchayat Udyog create wooden furniture, steel furniture, agriculture implements cement products,
handloom textile, storage appliances, cart with types, etc. Their products could be purchased by the Government
Department without issuing any tenders or Quotation. State did not provide any financial aid or grants to Panchayat
Udyog. These are handled by their joint committees utilizing the share money invested by shareholders the Gram
Sabha. They may get financial loans form the interest accumulated by Gram Sabha funds at a subsidized interest
rate of six per cent recoverable over ten years in equal instalments.

7
 The basic objective of establishing Panchayat Udyog was to provide durable products like furniture, agriculture
implements and sanitaryware to village residents at low rates in the village itself by decreasing their dependence on
the urban market. The profit which we get form these Panchayat Udyog were distributed to all the share holders and
can be utilize for the development and construction work thus providing job to the skilled and unskilled manpower
form the village area. Skilled people who trained in ITI also employed in Panchayat Udyog. These Udyog provide
jobs to more than ten thousand people by 1984. It was created to hand over certain major industrial projects and
expand Panchayat Udyog, including that of manufacturing locks, soaps, and detergent, handloom clothes, cold
storages, etc.
Objectives of Panchayat Udyog
1. To provide mass organization for industrial development in development blocks.
2. To decentralize industries, import technical and scientific knowledge and provide villages with minor machine
based production.
3. To develop local entrepreneurial resources.
4. To provide an opportunity to the Gram Sabha Panchayat to invest finances in productive work so as to
augment their income utilizing local resources.
5. To provide employment to village artisans.
6. To replace individual contractor with contribution form Panchayat in discharging gainful and productive
work.
Q. 4. Rural Tourism
Ans. Rural Tourism: India is the oldest culturally richest and culturally rich country yin the world. We can
found loy of colours and a lot of civilization with varies flaura and fauna. The Indian cuisine are mouth watering,
natural scenes is breathtaking the Indian folk dance are simply mesmerizing and we can have wide range of tourist
attraction from the valley of Himachal to the scenic valley of Uttaranchal beautiful forest of north-east plateau of
the south India and the river of Ganga are the main attraction for the rural tourism in India. India is the country with
full of diversity and that is why we termed India as Incredible India.
Two third of the total India population live in the rural areas. Main attraction for the tourist origin is the rural
area. Mostly all the tourist centres are located nearby the urban centres and near to the rural set-ups. We can see the
variety of art, craft, performing art and culturally diverse things in the rural set-ups.
Potential of Rural Tourism in India
India needs to get rid for the travails from the city life. For the foreigners the main attraction is the rural centres
they fell more inclined to the life in the rural centres. Now-a-day main attraction is the rural tourism at the international
level India should to possible effort to promote the trend of the rural tourism. Most of the tourist destination is
located near the rural centre and it is noticed that the most of the tourists like to visit the destination outside the
urban centres. State Tourism Corporation also started the notion of the rural tourism like Rajasthan, Kerala, West
Bengal, Punjab, Himachal, Uttarakhand Madhya Pradesh, Jharkhand and Bihar. Atleast some of the villages have
developed the heritage village complex which is the potential for promoting the tourist attraction and promoting the
rural India. We need to create the rural areas as the place which is the main destination for the heritage village. For
example, Surajkund craft mela in Faridabad and Chauki Dhani in Jaipur, Vishaal in Ahmeadbad are the main
attraction of the rural tourism department. Government need to promote the rural tourism. Delhi Hat is the example
where the government has done possible effort to promote the rural tourism and to make the people aware with the
rural India and its rich culture and heritage. The national tourism policy was formed to promote the concept of the

8
rural tourism in the remote areas and inferior places where the actual India lives. The basic objective to create the
understanding between the people to create the employment opportunity and to make social economic benefit to
the Indian people. This was promoted in the interior and remote areas and to make balance and development,
protection and preservation of the natural resources and the environment to achieve the development. The new
policy of the tourism seeks to promote the tourism arrivals and promote he rural tourism in a manner so that it make
adverse effect on the cultural pollution and to minimize the degradation of the environment. The new tourism
policy focus on the stay of foreign tourist in India, to the the journey pleasant and memorable and significant to
provide the rural service at the reasonable cost. The policy focus on to encourage the repeated visit to India The
policy was to promote the traditional philosophy of giving the respect and honour to the guest who come to visit
India. The notion of the cottage tourism is located in the each country which is the other form of village tourism or
services. This policy was aimed to promote the rural tourism and to create the environment which may be known
as non-urban life-style. The government of Rajasthan is very actively engaged in promoting and encouraging the
idea of the rural tourism in the country.
The basic objective of promoting the rural tourism is to add the income creation, employment generation,
economic stability and equality and the entire possible infrastructure in the rural India. This activity also helps in
promoting India to national and international level and to attract the tourist who have liking for the rural tourism.
The notion of the rural tourism will help in attract the tourist, generate extra income, help in boosting the activity,
service and amenities provided by the farmers. The notion of the rural tourism will give the advantage to the local
people by giving them entrepreneurial opportunity, employment generation opportunity, conservation and
development and preservance of the natural village heritage and environment. The government of India has sanctioned
the rural tourism project report to some state governments. The government of the Tamilnadu planning to developed
the rural tourism in the state level and the main destination in the Tamil Nadu are Sursnkundram in Kanchipuram
district and Sutthamali in Tirunaveli district. Tamilnadu tourism also planning to developed tourist village circuit.
The package of the tour focus on making aware the tourist with the life and tradition of the village and making ware
with the soico economic condition of the village. The tourism department also focuses to create the ethnic art and
craft to ensure the market exposure. The rich had varied culture and heritage of the Tamilnadu not only attract the
international tourists also the domestic tourists from the different part of the country. The report prepared by the
FICCI reveals that the tourism department has the scope of highest employment investment ratio. Every additional
investment has the scope and potential to generate numerous job opportunities. The effect and the consequences of
the tourism generate very high revenue capital ratio. It is calculated that the entire tourist and the visitors may add
revenue of billion of rupees for the industry. FICCI states that the benefit of the tourist department must be preserved
for the promotion and establishment of more tourist destination.
Q. 5. Partnership
Ans. Partnership
There is another person who will share all the responsibility and profit with you. The characteristic of partnership
are two or more persons. In the partnership the trust and understanding is must in the partnership. They should
complement each other. They should trust each other. There should be sense of understanding among each member
of the group contractual relation, lawful business, sharing of profits, no separate legal existence, unlimited liability,
restriction on transfer of shares, utmost good faith.
The basic requirement to run a successful partnership is mutual understanding, good faith, common approach,
written agreement, registration, capital, skill and stability. The Partnership is formulate by the Indian Partnership

9
Act 1932. The merit of Partnership are ease of organization, combined talent judgement and skill, increased sources
of capital and credit and improved chance of growth. The demerit of partnership is unlimited liability, limited life,
divided authority and danger of personal disagreement.
Q. 6. Cooperatives
Ans. Cooperatives: Firm owned, controlled, and operated by a group of users for their own benefit. Each
member contributes equity capital, and shares in the control of the firm on the basis of one-member, one-vote
principle (and not in proportion to his or her equity contribution). A cooperative is an autonomous association of
persons united voluntarily to meet their common economic, social, and cultural needs and aspirations through a
jointly owned and democratically-controlled enterprise. International Cooperative Alliance (ICA) defines cooperative
as “A cooperative is an autonomous association of person united voluntarily to meet their common economic-
social and cultural need and aspiration through a jointly owned and democratically controlled enterprise.”
Cooperatives operate according to seven basic principles. Six were drafted by the International Cooperative
Alliance (ICA) in 1966, based on guidelines written by the founders of the modern cooperative movement in
England in 1844. In 1995, the ICA restated, expanded and adopted the 1966 principles to guide cooperative
organizations into the 21st century.
Q. 7. Market Research
Ans. What is Market Research?: Market research is the process of collecting valuable information to help
you find out if there is a market for your proposed product or service. The information gathered from market
research helps budding entrepreneurs make wise and profitable business decisions. The key to any successful
business is to understand what it is that your customers want and giving this to them in a way that is profitable for
you. Many entrepreneurs make the mistake early on of thinking that they know what their customers want without
ever asking them. This can result in some very expensive mistakes later on. In order to find out what exactly it is that
your customers want you must undertake a process called ‘Market Research’. This module will give you a basic
understanding of the concept of market research, its various uses and provide guidance on how you can design your
own market research questionnaire for your mini-company.

10