Class 1

Concept of Entrepreneurship

1
 Session -1 Objectives
• To understand the course plan
• To study the relationship between
entrepreneur , entrepreneurship and the
enterprise
• To identify the characteristics of an
entrepreneur
• To list the benefits of becoming an
entrepreneur

2
 Meaning of terms
• Who is an Entrepreneur –person

• What is Entrepreneurship – process

• What is Enterprise – object / firm/company

3
 3 E’s Relationship
.

EE E E
Entrepreneur Entrepreneurship Enterprise

PERSON PROCESS OBJECT

4
 Input-output(I/O)Model
Environment
• (stakeholders)
Inputs Throughput
PROCESS
(Resources)
Physical

Human OUTPUT
VALUE TRANSFORMATION
Financial

Information

Feedback

5
 Characteristics of Resources
• Scattered
• Scarce
• Unorganized
• Diversity
• Output capability
• Dynamic
• Uncertainty

6
 Activity1 :
Answer the given Question?
• Distinguish one most significant difference
among the various resources shown in the I/O
Model?

• Answer in a sentence in the “chat box” in not

more than 3 minutes

7
 Systems theory
• Systems theory is one of the dominant
organizational theories in management today.
• Management of an organization as a system
involves monitoring inputs, throughputs,
outputs, and feedback loops and making
changes necessary to increase organizational
effectiveness or goal achievement.

8
9
 System Theory
• Elements
GOALS OF FIRM
• Goals
• Interaction X x x x x x
• Boundary x
x
x
x x
• Subsystems x
x
x
x
x x
x
• Entropy X x x x

10
 Systems theory
• A systems theory is a theoretical perspective that
analyzes a phenomenon seen as a whole and not
as simply the sum of elementary parts.
• The focus is on the interactions and on the
relationships between parts in order to
understand an entity's organization, functioning
and outcomes.
• Changing one part of a system may affect other
parts or the whole system. It may be possible to
predict these changes in patterns of behavior.
11
 Information and Decision making
• All decisions are made supported with information
• High , medium risk , low risk defined depending on
information and probability
• Risk and reward inversely related .
Certainty- Uncertainty-
100% 0 % information
information Calculated risk

RISK AREA
MEASURED THROUGH PROBABILTY

Low risk-low reward High risk-high reward

12
Visualizing Risk Impact and Probability
• The standard way to show risk exposure, or severity, is via a 3x3 risk
exposure matrix. This is sometimes called a risk assessment matrix
or grid, and it’s the formal PM method of qualitatively displaying
the combination of a risk’s probability and impact.

• To help visualize the relationship between the probability (i.e.,

likelihood of a risk occurring) and the impact (i.e., the consequence
of the risk happening), here’s a simple graphic to illustrate how Risk
Exposure = Probability x Impact:

(Copyright © 2018-2022 Mark H. Warner | The Project Management Blueprint.

All rights reserved. https://www.theprojectmanagementblueprint.com/blog/risk-
management/risk-exposure-equals-probability-times-impact)

13
14
 Risk Exposure = Risk Probability x Risk Impact

Copyright © 2018-2021 Mark H. Warner | The Project Management Blueprint

15
 Qualities needed to become
entrepreneur
• Need to achieve
• Moderate risk
• Creativity and innovation
• Perseverance
• Ability to explore opportunities
• Analytical ability
• Using feedback
• Facing uncertainty

16
 Case study 1
• Read the case 1 attached .
• Question: Apply the concepts learned in
todays class to the given case.
• Limit your answer to about one page
• Submission : Before 7 pm on 7th Feb 2022

17
 Assignment-1
1. Identify any three definitions each for
entrepreneur and entrepreneurship –identify
one important common keyword /tag among
the definitions for entrepreneur and
entrepreneurship.
2. Apply system theory to a small enterprise and
discuss its significance?
3. Both questions to be answered in about a page
each.
Submission: Before 8 Feb 2022, 8 pm.
18