+BPEM Unit 2

CONCEPT OF INTRAPRENEURS

• This concept was coined in USA by Gifford Pinchot

• Term was coined in 1982

• “ He is a person within the large organization who takes direct responsibility for turning an
idea into a profitable one”

• They are also known as Internal entrepreneurs or entrepreneurial managers

• An intrapreneur is an employee of the organization who is paid remuneration according to

the success of the business unit, for which he/she is hired or responsible.

An intrapreneur is nothing but an entrepreneur within the boundaries of the organisation

• An intrapreneur is an employee who is given the authority and support to create a new
product without having to be concerned about whether or not the product will actually
become a source of revenue for the company.

CHARACTERISTICS OF AN INTRAPRENEURS

• Creates new venture

• Giving birth to new business from within

• Innovates products / Service

• Innovates products & services

• Proactive

• They are very active

• Grab the opportunity

• Lead the competition

• Risk Taking

• They have risk taking attitude

• They take action under uncertain situation

•  Courageous

Intrapreneurs are not afraid of failing and being criticised. Intrapreneurs are aware that they may
lose their job if they fail, however they have the courage to pursue their goals.

• Results driven

Intrapreneurs need to focus on outcomes in order to start and complete tasks that will
deliver the desired results. This requires the ability to execute ideas effectively and efficiently.
 ENTREPRENEUR INTRAPRENEUR

Entrepreneur refers to a person who Intrapreneur refers to an employee of the

set up his own business with a new organization who is in charge of undertaking
 Meaning idea or concept. innovations in product, service, process etc.

Resources Uses own resources. Use resources provided by the company.

Capital Raised by him Financed by the company.

Dependenc
y Independent Dependent

Risk Borne by the entrepreneur himself. Taken by the company.

Creating a leading position in the Change and renew the existing organizational
Work For market. system and culture

Advantages of Intrapreneurs

• Innovation

• Helps in reducing cost

• Helps in creating the goodwill

• Learning & development (learning curve)

• Part ownership (sole responsibility)

• Eligible for bonus, royalty

WOMEN ENTREPRENEURS

• “Any women or group of women's which innovates, initiates or adopts an economic

activity may be called women”

• Government of India:

• “An enterprise owned & controlled by a women having a minimum financial interest
of 51% of the capital & giving at least 51% of the employment generated by the
enterprise to women”

QUALITIES/ FEATURES

• She has a positive attitude.

• She can overcome obstacles.

• She is strong-minded.

• She is soft-hearted.

• She has balance in her life (work life balance)

• Goal Setter

• Sense of purpose

• Ambitious

• Confident

• Hard Working

• Passionate

CHALLENGES FACED BY WOMEN ENTREPRENEURS

• Problem of Finance

• Women do not generally have property on their names to use them as collateral for
obtaining funds from external sources. 

• the banks also consider women less credit-worthy and discourage women borrowers
on the belief that they can at any time leave their business. 

• Scarcity of Raw Material

• High prices of raw material

• Getting raw material at the minimum of discount

• Stiff Competition

• She is not having money for canvassing and advertisement.

• Limited Mobility
 • he has restricted timings for work due to which, she is not in a position to travel
frequently and be away for longer Durations

• Family Ties

• Duty to look after the children and other members of the family. 

• She has to strike a fine balance between her business and family. 

• Her total involvement in family leaves little or no energy and time to devote for
business.

• Lack of Education

• Illiteracy is the root cause of socio-economic problems.

• Women are not aware of business, technology and market knowledge.

• Male-Dominated Society

• Women are looked upon as abla, i.e. weak in all respects.

• Women are not treated equal to men. This, in turn, serves as a barrier to women
entry into business.

• She always has to consult and get approval of men.

• LOW RISK BEARING ABILITY

• This is so because right from the childhood, her parents take decisions for her and
after marriage her husband takes over.

• She is protected throughout and thus the risk bearing ability gets reduced.

• ADMINISTRATIVE AND REGULATORY REQUIREMENTS

• Micro enterprises of all types can experience problems in meeting administrative

and regulatory requirements, because of the disproportionate effect of compliance
costs on small companies 

DEVELOPMENT OF WOMEN ENTREPRENEURS – WITH REFERENCE TO SELF HELP GROUP

• Self-Help Group (SHG) is a small voluntary association of poor people

• It is rural based financial intermediary

• Group of 10 to 20 members , usually local women

•  Usually, the number of members in one SHG does not exceed twenty.

• Supported by NGO or government

• A self help group is defined as a "self governed, peer controlled information group of people
with similar socio-economic background and having a desire to collectively perform common
purpose."

NEED
 • SHGs enable them to Increase their income, improve their standard of living and status in
society.

• to make the people of below poverty line hopeful and self-reliant. 

• To inculcate the habit of savings

• To develop entrepreneurship

• To assist the member's financially at the time of need

• To build up teamwork

• To help in recovery of loan

• To organize training for skill development

• To develop leadership quality

OBJECTIVE:-

• To create group feeling among members.

• To develop collective decision making among members.

• To encourage habit of saving among members and facilitate the accumulation of their own
capital resource base.

• To collect enough capital which is later used for lending to the group members for any
specific purpose

PROCESS :

• 5 to 20 women's come together

• Appointment of leader

• They open a bank account (for parking funds)

• Members contribute small & regular saving

• These deposits are made available to the people

• The members borrow the amount

• The interest rate & term of loan is decided by the group

ADVANTAGES

• Improves Efficiency of the credit system

• to meet the credit requirement off the poor

• To improve credit system

• Promotes the habits of saving

 • People are promoted to save because of benefits

• Helps them to linking to banking system

• Resource mobilization

• Plays very important role in mobilizing savings

• Who individually do not make use of banking system

• Women Empowerment

• Helps women economically, Socially & politically ,more empowered

• Helps them to participate & won panchayat election

• Reduce the influence of unorganized sector

• Chit funds, money lenders etc. are not regulated by RBI

• They charge very high interest to the rural poor

• Develop individual skills of group members

• Working as a members of SHG, they develop certain skills

• Negotiation, accounts, marketing, problem solving , leadership skills etc.

• Improve the living condition of the poor

• Helps in reduction of poverty

• Help the people to generate income & contribute to family income

• Financial independence

• Helps to bring financial independency among rural people

• Helps to eliminates the exploitation from money lender

• Promote Socio – Economic Justice

• Helps to promote economic justice

• Helps to reduce poverty

• Empower to women belonging to Schedule Tribe, Minorities

MEASURES / INITIATIVE TO DEVELOP WOMEN ENTREPRENEURS

• ENTREPRENUERSHIP DEVELOPMENT PROGRAMMES

• This programme helps to upgrade the skills & potential of women

entrepreneur

• Some of the training & development institution incudes

• NIESBUD
 • SIDO (Small Industrial Development Organization)

• EDII

• NISIET

• WOMEN CELL

• This cell is developed by Development Commissioner (DC)

• This cell provides assistance to women entrepreneurs

• SCHEME BY SIDBI: ( Small Industries Development Bank of India )

• They have 2 special scheme

• Mahila Udyam Nidhi – exclusive scheme for providing equity

• Mahila Vikas Nidhi – provides women with development assistant ( training)

• Provides credit on soft terms

• Scheme of BOI

• ‘Priyadarshan Yojana”

• Bank has appointed entrepreneurial development counsellor at every zone

• They provide financial assistant & guidance (fund utilization)

• Scheme of SBI

• Stree Shakti Package - Amount of loan is more than ₹2 lakhs. 

• Loans are provided upto 25000/-

• Eligibility for this scheme –

• Women should have at least 51% of financial stake in business

• They should manager business by herself

• Scheme of KVIC

• Khadi village Industries Commission

• They provide financial & non Financial Assistant

• They provide loan to set up Cottage industries

• Women Industries Fund Scheme

• Women entrepreneurs get 15% seed capital of total cost of project

• Maximum amount is 1 lakh

• Maximum amount of project should not exceed 10 lakhs

• Own funds should be 10%

• Scheme is operated through nationalized bank

 •  Annapurna Scheme

• Offered by the State Bank of Mysore for those women entrepreneurs who are
setting up food catering industry in order to sell packed meals, snacks. Etc

• maximum amount of money that is granted is ₹50,000

• Repayment in 36 months

• Dena Shakti Scheme

• This scheme is provided by Dena bank 

• entrepreneurs in the fields of agriculture, manufacturing etc

• The interest rate is also decreased by 0.25% 

• maximum loan amount being ₹20 lakhs for retail trade; education and housing

• Mudra Yojana Scheme For Women

• Govt. of India for individual women wanting to start small new enterprises

• businesses like beauty parlors, tailoring units, tuition centres, etc.

• The loan doesn’t require any collateral security

• Shishu – loan amount is limited to ₹50,000 and can be availed by those businesses
that are in their initial stages.

• Kishor – loan amount ranges between ₹50,000 and ₹5 lakhs and can be availed by
those who have a well-established enterprise. 

• Tarun – loan amount is ₹10 lakhs and can be availed by those businesses that are
well established but require further funds for the purpose of expansion 

SOCIAL ENTREPRENUER

• A person who establishes an enterprise with the aim of solving social problems or effecting
social change.

• They are private business established by entrepreneurs with an emphasis on human values
rather than just profit.

• They are the individuals with innovative solutions to society (most pressing social problems)

• It is a blend of profit making goal along with the aim of working towards society

• Rather than leaving it on the government or business sectors, social entrepreneurs find
what is not working & solve the problem by changing the system

• Social entrepreneurs presents the idea that are user friendly, understandable, ethical & will
get maximum support from the people.

• They act like change agent in the society

CHARACTERISTICS OF SOCIAL ENTREPRENEURS

• Willingness to self correct

 • Admitting defeat on one road allows the social entrepreneur to other routes

• Willingness to share the credit.

• Part of the profit for mission

• Willingness to work quietly

• Many of the projects are not well known

• Need to have strong ethical Motivation

• They are driven by ethical success

• CHANGE AGENT

• They see opportunities in social problems

they develop means& strategies to overcome them

• INNOVATION

• They also deals with developing new models & pioneering innovative approaches

NGO

• Non – Profit Organization

• Voluntary association, service oriented for the benefits of the society

• Helps to develop the communities

• It is an organization initiated & governed by its own members

• They have sense of commitment to human development .

• A non-governmental organization (NGO) is a nonprofit organization that is independent of

governments and international governmental organizations. 

NGOs are referred in many ways.

• NPOs or Not for profit

• VOs or Voluntary Organisations

• CSOs or Civil Society Organisations

• CBOs or Community Based Organisations

• Charitable Organisations

IMPORTANCE OF NGO

• Development of infrastructure

• Helps to develop land, construct housing, provide infrastructure .

• Technical assistance & training

 • The NGOs are active to promote education, particularly among that section of population,
which has remained un-benefited or less benefited by the measures adopted by the
government.

• Create awareness/ Reduce illiteracy levels

• Undertake various activity to create awareness.

• They undertake activity to teach people.

• Protect human right

• People belonging to different sector or section

• Violation of human rights

• Encourage rehabilitation

• Drug addict

• Mentally handicapped . Socially handicapped

• Protect environment

• Eco friendly technology

• Make eco – friendly goods

• Gainful employment

• Motivate people to earn through hard work

• Lead a respectable life

• Combat Man made crises

• Communal riots ,

• Ensure supply of food & medicines

• Useful service to the people at time of natural calamities

Entrepreneurship Development Program

• EDP is a programme meant to develop entrepreneurial abilities among the people. 

• it refers to inculcation, development, and polishing of entrepreneurial skills 

•  Thus, the concept of entrepreneurship development programme involves equipping a

person with the required skills and knowledge needed for starting and running the
enterprise.

Objectives of EDP

•  Develop and strengthen the entrepreneurial quality, i.e. motivation or need for
achievement.

•  Select the product.

• Formulate proposal for the product.

 • Know the pros and cons in becoming an entrepreneur.

• Let the entrepreneur himself / herself set or reset objectives for his / her enterprise and
strive for their realization.

• Prepare him / her to accept the uncertainty in running a business.

• Enable him / her to take decisions.

• Enable to communicate clearly and effectively.

• Know the sources of help and support available for starting a small scale industry.

• Make him learn compliance with law

PHASES OF EDP

PRE TRAINING
EDP

TRAINING
FOLLOW UP

• PRE TRAINING:-

• It consists of all the activities & preparation to launch training programme

• Selection of entrepreneurs.

• Selecting of the guest.

• Arrangement for the infrastructure

• Selection of the committee

• Making provision for publicity

• Taking necessary steps for inauguration

• TRAINING:-

• It consists of training programme to develop motivation & skills

• To develop competency amongst the potential entrepreneur

• To impart theoretical & practical knowledge

• To motivate the entrepreneur to accept it as a career

 • To impart him with sufficient knowledge on technology

• To impart him with traits

• How should he behave like entrepreneur

• FOLLOW UP PHASE (POST TRAINING):-

• To develop competent entrepreneurs

• It’s a review phase (evaluation of work)

• Review of the pre - training

• Review of the actual work

FACTORS INFLUENCING ENTREPRENEURSHIP DEVELOPMENT PROGRAMS

 ECONOMIC FACTORS
 NON ECONOMIC FACTORS

ECONOMIC FACTORS

• Availability of economic resources

• Depends on the availability of adequate funds, land, labour etc

• Resources availability i.e factors of production availability

• Economic condition

• Economic conditions refer to the present state of the economy in a country

• A country's economic conditions are influenced by numerous factors such as   -

Stable in inflation rate, unemployment levels, exchange rated, Per capita income ,
purchasing power

• Tariff policy

• A tariff is a tax imposed by a government on goods and services imported from or

exported to other countries 

• Good policy encourage people to take up entrepreneurship

• Support service:

• Support from financial institution – divided into 4 levels: 1. Central Government 2.

State Government 3. Non-Government Support System 4. District Industries Centres
(DIC).

• Capital help from bank

• Trade policy

• Good trade policies are required to start & encourage potential entrepreneur
 • General trade policy objectives is to achieve a more outward-
oriented trade regime, increased market access for exports, and greater global
integration etc

• Helps to ensure sufficient supply of goods & services

• Labour policy

• Effective labour policy encourage the entrepreneurs to take up the activity

• he term Labour Law is used to denote wages, working conditions, industrial

relations, social security and labour welfare

• Incentives

• Incentives are needed to encourage entrepreneurship

• Eg. Interest free loan, rebate, wealth tax exemption, Subsidy, bounty

NON - ECONOMIC FACTORS

• Social Factor

• A rational society would encourage entrepreneur to take the decision

• Cultural Factor

• Protestant countries are more prone to entrepreneurial growth - due to their

work ethic – more emphasize on value of working

• Countries with economically or monetarily oriented culture

• Technology factors

• New technology offers people the opportunity to explaoit these opportunities

• Leads to high growth

• Personality factors

• in less developed countries entrepreneur is viewed as a exploiter

• Thus this affects the entrepreneur personality

• Educational factors

• psychological factors

• Physiological factors in entrepreneurship mean feelings, inspirations, tendencies,

self-thinking, and physical, economic and social atmosphere

• Hence, behaviors of entrepreneurs are guided by physiological tendencies, past

trends and mental .

OPTIONS AVAILABLE TO ENTREPRENUER

I. FRANCHISING
Franchise is a continuing relationship between the parent company (called the franchiser) and an
individual business unit (called the franchisee); under which the parent company provides a licensed
privilege to the business unit to use its trade mark, in return for a royalty payment made to the
parent company.

• It’s a form of contract in which the franchisee ( a retailer) enters into an agreement with
franchisor ( producer) to sell the goods & services for a specialized fee .

• It is a contract between two parties, especially in different countries involving transfer of

rights and resources.

• Legal and commercial arrangement concerning the successful business of a franchisor.

• Use of franchisor’s trade name, format, system and/or procedure under license.

• Payment by franchisee by way of royalty, licensee fee or other means.

• It can solve all start-up problems

FEATURES

• The term of franchise may be for 5 years or more; and the franchise agreement may be
renewed with the mutual consent of both the parties.

• The franchisee agrees to pay specified royalty to the franchiser, as per terms of the
franchise agreement.

• The franchiser virtually sets up the business for the franchisee.

•  (i.e. style of interior decoration);

• Franchisee is supposed to follow parent company’s policies regarding mode of business

operations, as per clauses in the franchise agreement.

• Franchiser may give training to personnel working in the franchisee’s organization.

ADVANTAGES

• Expansion of Business:

• The franchiser is able to expand his business, and gain wider acceptance of his brand
name or trademark, because of franchise agreement

• Regular Income for franchicer:

• The franchiser receives a regular income by way of royalty from the franchisee at no
extra cost

• Economical Advertising for the franchicee:

• Advertising done by the franchiser benefits the franchisee also. Thus, under
franchise, advertising proves very economical, in the long-run.

• Little Investment Needed:

• The franchisee can start business with lesser investment than would be required had
he to start an independent business of his own.
 • Advantage of Goodwill to Franchisee:

• Franchisee gets the immense advantage of the goodwill created by the franchiser

• Reduce the chances of failure

• Enters the business which is already tested

• Benefits of R & D

• The franchisee enjoys the benefits of R & D done by the franchisor

• Enables easy finance

• franchisee can obtain the finance easily

DISADVANTAGES

FROM THE VIEWPOINT OF THE FRANCHISER:

• Danger of image tarnishing:

• If the franchisee does not maintain standards of quality and service; there is a
danger that the goodwill and image of the reputed franchiser is tarnished.

• Problems and costs for the franchiser:

• Vocal and demanding attitude of franchisee

• (b) Problems and costs of communicating with franchisees located at distant places

• (c) Costs of training, financing and advertising, done for the franchisees.

FROM THE VIEWPOINT OF THE FRANCHISEE:

• Lack of freedom:

• The franchisee does not have the freedom to run his business in an independent
manner.

• Fixed royalty payment:

• The franchisee has to make payment of royalty to the franchiser on a regular basis.
This considerably reduces the income of the franchisee.

• Lack of creativity:

• Expected to deliver & act as per format

II. ANCILLARISATION

• It is an industrial undertaking having investment in fixed assets in plant and

machinery whether held or on ownership or on hire purchase not exceeding 100
crore.

• A Small scale unit become ancillary unit to another company

• Supplies 50% of production to another company or parent company

• Engaged in
 • Manufacturing parts, components, tools, intermediates etc.

• They not only cater to parent company, but also cater to create their own
brand

• They also sell their own patented goods

ADVANTAGES

• Specialization

• Ancillary unit specialize in the manufacturing of certain products,

• Used & demanded by many other industries

• Economies of scale

• Mass production

• Thus the benefit is passed onto the larger manufacturing

• Benefits reaches to the end customer

• Share Financial burden

• Large size of organization outsource their place ‘

• Thus fixed investment gets reduce

• Land, building, etc.

• Insurance

• They act as insurance for the large scale manufacturer

• Entrepreneurship development

• Helps small scale units blossom

• Encourages to take up the small scale unit

Disadvantages

• Dependency

• Larger industries are dependent on small units

• Delay in supply can directly impact the efficiency

• Even ancillary units are dependent on large organization

• Low degree of flexibility

• Any changes or switch to a different category of products is capital intensive

• Co-ordination issue

• Both the unit require close co ordination for smooth functioning

• Any changes by large company should be communicated to the small companies

 • Financial Vulnerability

• Delay in payment may put ancillary companies in big trouble

• Large companies put financial pressure on ancillary units

• Quality Control

• It is essential for both the parties to maintain QC

failure in quality could lead to financial losses.

III. BPO

• It is a contract whereby a firm transfers its processes along with the associated operational
activities and responsibilities to a third party.

• It is any activity , job, operation, or process that is not performed by employees within a
company.

• It is contracted to an outsider

• BPO is the contracting of a specific business task.

It is often divided into two categories :

• Back Office Outsourcing which includes internal business functions such as billing
or purchasing.

• Database management , payroll, finance

• Front Office Outsourcing which includes customer-related services such as

marketing or tech support.

• CRM, technical Support

ADVANTAGES

• Optimum utilisation of the resources:

• BPO enables optimum utilisation of resources of scarce resources. 

• Outsourcing helps to capture new efficiencies and reallocate the resources. 

• Reduction in cost:

• BPO not only helps in reducing cost but also increase productivity and raise
revenue significantly.

• Outsourcing helps the company maintain lower rates with better service solutions,
thereby giving them a better market position.

• Cater to changing customer demands:

• Many BPOs provide the management with flexible services to meet the customers’
changing requirements, and to support company acquisitions

• Organizational effectiveness:

• This expertise in a particular field leads to expertise

 • Better & improved services

• Focus:

• Efficient business strategy is essential to take the business to the top. Outsourcing
enables the top management level to hand over critical but non-core activities of
the business to the third party. 

• Sophisticated technology at lower cost:

• Technology is the leading area of outsourcing. It makes much of the work of

modern organisation easy. 

IV . MERGER

• When two or more firm combine together

• The merger means the fusion of two or more than two companies voluntarily to form a
new company. 

• when two firms of similar size merge, stocks of both are surrendered to form a new stock.

Types of Merger

a) Horizontal Merger:

• When two or more business firm engaged in same business

• Horizontal mergers involve two competitors merging

• Facebook's acquisition of Instagram in 2012

b) Vertical merger

• A merger between two companies producing different goods or services for one
specific finished product.

• A vertical merger occurs when two or more firms, operating at different levels
within an industry's supply chain, merge operations.

• Backward Integration

• Forward Integration

Backward Integration

• Backward integration is a form of vertical integration that involves the purchase

of, or merger with, suppliers up the supply chain
Companies pursue backward integration when it is expected to result in improved
efficiency and cost savings. 

• A general example of backward integration is when a bakery business moves up

the supply chain to purchase a wheat processor and/or a wheat farm.

Forward integration

• Forward integration is a business strategy that involves a form of vertical

integration whereby business activities are expanded to include control of the
 direct distribution or supply of a company's products.
This type of vertical integration is conducted by a company moving down the
supply chain.

c) Concentric Merger

• A congeneric merger is a type of merger where two companies are in the same or

related industries but do not offer the same products

• In a congeneric merger, the companies may share similar distribution channels,

providing synergies for the merger.

d) Conglomerate merger

• Conglomerate mergers are mergers of two business firms engaged in unrelated

business activities. 

• They have no actual connection.

• Conglomerate merger in which merging firms are not competitors

ADVANTAGES OF MERGER

• Increasing the earning capacity

• Enable firms to diversify

• More opportunities to firm

• Economies of scales by enlarging area of operation

• To merge their power and control over the markets.

• Optimum utilization of resources

• Prevents the loss making unit from becoming sick unit

• Provides the benefits of synergy