UNIT ENTREPRENEURIAL PERSPECTIVES a PART-A SHORT QUESTIONS WITH SOLUTIONS 1. Define the concept of entropreneurship. a According to Pole, “Ent (Model Papers, QH(b) | May-18, Q1(a}) canine Cole. “aepeniip spars ati nig ef mae i acieesbeee ee ens Senora nln read ais natn War ny te ‘2. State the entrepreneurial motivations. — rine ee ‘ume, irs Mr Sperone aay eras Entrepreneurs ean use many motivational practices to motivate thee Soe ores y Practices to motivate the employees in achieving the set goals. Some of the 1. Rewards “xine a ly ae yrs tom of ny ad embetter 2 Goal Setting é One ofthe powerful motivational practices is "Goal Seting" I performance goals are set ina correct manner, then twill motivate the employees to great extent. 3. Flexibility Employees feel motivated when they are provided with flexi time, flexible benefits, MBO and ater such benefits. Js. Empowerment When the employees are empowered, they belive that they own the jobs. Thus, i leads to improvement in performance of employees {23._ Write about entrepreneurial stimulants. [Answer = Model Papers a) There are many factors that boosts/stimulates entrepreneurial etivity which leads to development in economy. Some ofthe entrepreneurial stimulants are, ‘Availability of capital and other necessary input Supportive government programmes. Innovative environment. “Acollaboratve relationship between research and business and theirefort in tansferrng the technology tothe market plac Sin GRouP CCTRUM ALLIN-ONE JOURNAL FOR ENGINEERING STUDENTS= ENTREPRENEURSHIP AND SMALL BUSINESS ENTERPRISES LNTU-HYDERAay (QA. In which areas policies and practices are required for entrepreneurial managemort, Answer : wee Following are the four imporant areas in which policies and practices ae required for entrepreneurial manage 1. The organization should be inovaive in nature and shoul accept change asa apport To ewe a emg timate, policies and practices are required. In entrepreneurial management, policies and practices ae needed or staffing, managing, onganizationa Sta yy compensation, incentives et. ‘There should be systematic measurement or appraisal f company's performance. To improve Performan be cats should ensure builtin earning In enteprenerial management. some ons’ shoul be remembered (3) Enirepreneuria units and managerial units shouldnt be mined {6) Innovation should not be ‘diversification, because if the innovative efforts fakes the Business Cut Of own yg then there are chances that the business would fail QS. What are the advantages of being an entrepreneur. Answer Mose Powe gy The following are the advantages of entrepreneurs, |. Under entreprencurship business, entrepreneurs are the owners of enterprises who can take their own decisions fog success ofthe business 2. Under this, entrepreneurs can implement their wn ideas in the busines. For example, starting new venture, adopting latest technologies ee 3. Under this, entrepreneur has the complete authority to select the type of business in which he is interested 4.___ Entrepreneurship business provide high evel of profits. Q6. Write briefly the importance of entrepreneurs? Answer + ol Pesto Entrepreneurs have an important role to play in developing the economy. The following points will help you undone the importance of entrepreneurs, 1, Entrepreneurs change th direction of national markets, industries and economics. 2. They create wealth and new job opportunities. 3, Entrepreneurs are considered as seds of industrial development which in tur result in employment opprain unemployed youth rise in pr capita income, inreased savings higher standard of ving, and revenue to govermme Q7. Write about motivation cycle? ‘Answer : ot apr ‘An entrepreneur is required to possess knawledge about the motivation process and tile this knowledge for igs? the organisational performance. Process of motivation ca be used to make apetson perfor effectively, build a good lata between managers and staf, fll the socal, economic and human needs ofan individual et. The proces of moti ‘motivation cycle aims at achieving some gol. The thre main elements in motivation cycle ae, 1. Motives 2, Behaviour and 3. Goals Look for the SIA GROUP Loco {J on the TTLECOVER1 Entrepreneurial Perspectives 13 unt Fe flowing. igure depicts “the process af Motivation” or Motivation Cycle, Figure: Process of Motiv Gp _Ustout the differences between Entrepreneur and Intrapreneur? answer = a) ome of the differences between entrepreneur and intrapreneur are, fave. | Basis Entrepreneur Intrapreneur 1 [befinition | According to Peter F, Dicker, “He is one who | Intrapreneurs are the innovators and software always searches fora charge, responds to it and| professionals who lend their innovative ideas to the’ exploit itas an opportunity”. ‘onganization under which they employed. Decision | Entrepreneurs.are greatly involved in the | Intrapreneur do not involve in the decision-making, | decision-making process. process and remains restricted to his work. Nature of | Entcepreneurs rewards vary with the changes | The inrapreneur get fixed rewards forthe work and also Rewards | in levels of risk, profit o loss. extra reward would be given for his/her innovations. ‘08. What are the measures to overcome barriers to entrepreneurship? Answer + Model Paper.v, an) Various barriers to entrepreneurial growth and development can be overcomed by the following measures, {0 Changing mind set of individuals and society (@ clung enteprencursip in academic cureulum. ai) Staring and establishing entrepreneurial development cells in collewes (a) Providing proper guidance and assistance by government. (0 Providing hassle-free ered and special incentives 10. What are the disadvantages of entrepreneurship? ; Model Paper. ab) Answer « ‘The disadvantages of entrepreneurship are as follows, Entrepreneurship involves high level of risk ‘der enirepeneuship eteprenew’s income i cera, he may eu come none moth a os in next month IF entrepreneurship isin partnership form then the authority of making decisions get divided between parers 4 Eotrepreneur have to work hard (day and night} fr the success of enterprise. Evemhe may not take a single leave during heavy work load. Sia GROUP WS |{VECTRUM @LLIN-ONE JOURNAL FOR ENGINEERING STUDENTS14 ft NTREPRENEURSHIP AND SMALL BUSINESS ENTERPRISES (JNTU-HYDE Rap, | r -PART-B ESSAY QUESTIONS WITH SOLUTIONS 2 1.1 EVOLUTION OF ENTREPRENEURSHIP q G11. Define entrepreneurship. Explain the evolution of entrepreneurship. > ‘Answer: Model Pape, Entrepreneurship According 1 AH. Cole,"Entrepreneuship isthe purposeful activity ofan indidal oa group of associated ing Undertaken to initiate, maintain or organize a profit oriented business unt by production or distribution of economic yay 8 services”, - ' a 00d ang Evolution of Entrepreneurship The evaluton ofthe concep ofan entrepreneur or enrerencuship is inthe following Sequence, 1 Fates Period 2 Middle Ages 3 178 Century 4 18. Century 5 1 and 20° Centuries igre: Evolution of Entrepreneurs (or Entrepreneurship 1. Earliest Period ‘The earliest period of evolution of entrepreneurs matks the finest example of Marco Polo, by acting as both and explorer, he discovered trade routes to the far eat and also entered into contacts with vacious capitalists forth sale ofa ‘goods. Mostly, merchant-adventurer loans were found to be common contacts during this period, wherein loan was offerl.g 22.5 percent interest rate which was inclusive of insurance. The capitalist had a passive role a a risk beaet, while the merch ‘adventurer played an active tading role holding the physical and the emotional ik, 2 Middle Ages ‘The word entrepreneur in the middle ages was used for an actor and a manager of large scale production projects, Te ‘manager of large scale production projects was not subjected to any risks and was only responsible to manage the projess with the help of available resources mostly being provided by the authorities ofthe nation, ‘A classic entrepreneur inthe middle ages was the cleric. A ceric is person who is a member of the clergy of a religg, Particularly a priest, preacher of a pastor. They were usually imposed by a responsibilty of giant architectures lke eat fortifications, public buildings, abbeys and cathedrals. 3. 17 Century in In the 17° century it was observed that individuals started entering into contracts with the government either to provide service or produce the demanded products on the price fixed by both the paris. In other words, the contract price wa fil ‘There were equal chances of either profit or loss to the entrepreneur. The famous entrepreneur of 17° century was John Law. John Law was a Frenchman who was permitted to start a royal bank. Very soon his royal bank tured into a new words trading company which was called as the Mississippi Company. Unluckily, the French trade’s monopoly resulted in John Law's ‘downfall, when he tried to increase hs stock price much higher than his company’s asset value, which ultimately lend to the wind of his company. Look for the SIA GROUP Loco {i on the TITLE COVER before you buy :Entrepreneurial Perspectives chard Cantillon in the 18th century established the alas the founder of the word entrepreneur. According 1o him an entrepreneur ers, craftsmen and sole proprietors “buy at @ certain price and sell at an uncertain price, : of et ker’ asthe merchant, aca wees pees were dn beeen capitalists andthe entrepreneurs athe 1 entry. In simple words, the individual who suc is as dstngibed rom the avidl who bad exp Cla indutialzaton was oe of the major cause or 8 gemton The 0 signiican entrepreneur ofthe 1centuy were El Whitney and Thomas Alva Edison. li Whitey aon it Ft Snted new technologies but were notin a position 1 anes tiem as they were lacking finanial eae ge and 20" Centuries neprseurs im the 19 century and 20% century can be studied from economic perspectives but not from managerial pst jn muishell cb enteprencur manages and controls an organization for one's owm selfinterest and profit. He bears the sea or te sent materials which re required nthe business, fr hese of lan, fr pesomal service and for «jo capal He pwovide his own resoutes, kills and creativity in planning organizing and controling the organization. se Shohols un an. assumption of possibility of ls and prof subjeted to unavoidable and unexpected condition. Lastly, he teen he esta amount whichis et ver afer making al he apne, whi called as profit rhe bestexstple ofan entrepreneur in 18%and 19% centuries was tht of Andrew Camegie. Andrew Camegie didnot invent gs anythin, ut he simply modifi and promoted the new technology for the development of economical products arp fsonae 1 2 poor Scottish family, He was the one who made the American sel industry as ne ofthe leading ses! opto in the word vi, his continsous competitiveness and not by merely innovations or reativy ‘hs in the mide of the 20° century, entrepreneurs were engaged in the production of innovative products either by eine he new products by improving the existing products. nthe present 21" century, few renowned entrepreneurs are Bill Gates (Microsoft), Murthy (Infosys), Sunil Mital (Airtel), sernens (amazon.com), Richard Brauson (Virgin and Michael Del (Dell computers). 4.2 CONCEPT OF ENTREPRENEURSHIP — 2. Define entrepreneurship. What are its elements and characteristics. answer # Model Papert, 2 of Entreprenetirship we Accoting to A.11 Cole, “Entrepreneurship iste purposeful activity of an individual or a group of associated individuals, pieaen to inital, maintain or organize a profit oriented busines unit by production or distribution of economic goods and ements of Entrepreneurship i S ‘wo asic elements of entrepreneurship are, (a) Innovation [novation to an entrepreneurs ike what waters toa fish, Innovation means either doing something new or unique from sheexsing products or services. Entrepreneurs nced tobe alert and updated about the changing tastes and preferences of the thse. Entepeencuts may or may not be inventor of new products or services, but they are competent enough to make use aft existing products, simply reinnowate them and sel at lower prices The latest example of innovation is mango-friy, which is now made available in small cartons instead of big bots. ‘se small cartons are disposable in nature, Once used they canbe disposed off and can be handled easily Thus, it canbe inferred thatthe entrepreneurs need to produce an innovative products as per the needs of customers. (0) Risk Bearing lying on sky isnot an easy task. One needs to putin extra efforts to reach that postion. In other words, to get higher retmnsonc nec to take higher risk Being an entrepreneur itself is arisky task. The organization or the enterprise may be enjoying ts or suffering loss because of cut-throat competition, changing tastes and preferences of the customers, scarcity of essential ‘onimoites and so on. An enteprencur must be capable enough to predict the levels oF risk involved. He must be a risk-taker tnd pa rsk-avoider tis his rsk-beaeing ability which motivates him to take ‘n’ number of ventures even if few of them fa ‘PEETROM ALLIICONE JOURNAL FOR ENGINEERING STUDENTS. SIA GROUP 13 = , a 41.6 ENTREPRENEURSHIP AND SMALL BUSINESS ENTERPRISES LOT Hoey ‘Characteristics of prencurship ‘The following are some of the important characteristic features of entrepreneurship. 1, Economie Activity The entrepreneurship is considered as an economic activity as it leads to the ereation and operation of 8 new entry focuses on the satisfaction of customers by producing and distributing the goods and services ~~ 2% Decision Making, ‘This is one ofthe main features of entrepreneurship. The enreprener takes the decisions of ener regarding hy ‘of business to be done and ways to be adopted For doing itn cae of uncertainty the entrepreveut should take proper deg 3. High Achievement Entrepreneurship isa function of high achievement. People are said to be successful entrepreneurs, Only When thy jg high urge for achievement 4. Innovation Innovation to an entrepreneur is like what water i oa fish. linovation means either doing something new or unigue the existing products or services. Entrepreneurs ned to be alert and updated about the changing tastes and preferences of aistomers, Entrepreneurs may oF may not be inventors of new products or services, but they afe competent enough o mikey, of the existing products simply reinnovate them and sell at lower prices, 5. Organization Building Organization building is one of te important ability for entrepreneurial development. This skill means that an ent can make the fim effectively by delegating authority fo others. In order to hecomtea successful organization builder, the enteprneg rust be good leaders and excellent administrators. 6 Manageriat Skit The most significant characteristis of entreprencurship is managerial skills and leadership. Entrepreneurship tusthy ‘understandable control of various situations including rsk and uncertainty. To maintain and manage the affairs of enterprise entrepreneur must have the ability and skill 7. Risk Bearing Capacity Flying on sky is not an easy taik. One nec t put in extra efforts io reach that postion. In other words, to get hie ‘returns one needs to take higher risk Being an entrepreneur itself isa rsky task. The organization ofthe enterprise may be eno ofits or suffering loss because of cut-throat competition, changing tastes and preferences of the customers, scatety of nea ‘commodities and so on. An entreprencur mist be eapable enough to predict the levels of risk involved, He must bears, and not a risk-avoider. It is is risk-bearing ability which motivates him to take ‘n’ number of ventures even if few of them fi 8. Resource Mobilisation ‘The most important feature of entrepreneurship is resource mobilisation, The enirepreneur’s job isto fill the gapah overcome the deficiencies which always exist inthe knowledge about the production function. The oceurrance of deficiencesa ‘due tothe inputs inthe production function which cannot be marketed for realising the final products. The entrepreneur shad mobilise all the inputs. Entrepreneurship isa function of input completing and gap fling. Q13. What are the factors influencing entrepreneurship? Answer ‘The factors which influences the entrepreneurship are as follows, 1. Educa Keeping in mind the requirements ofthe time, economic, social and politial environment, itis quite essential to big) radical changes in the educational patter, Training must be provided tothe youth so that Varioys opportunities indifferent W388 be created for self-employment, Designing suitable programmes for entreprencurial education and introducing ‘entrepreneutt as one ofthe subject at schoo! levels can help in bringing awareness about the importane of entrepreneurship, 2 Legal The law should safeguard te weak entepreneus tl the ne it The enepreneus in smal sets hod ie and therefor they ar ot ble compete with the largesse nua Fr stance era of os te oa for exclusive production in smal} sector protects the interests for small-scale entrepreneurs, Look for the SIA GROUP Loco 4} on the TITLE COVER before you buy 7 5 I ‘ iP us jeurial Perspectives york capital requirement mst be ule properly especially Whe ew enterprises starts serving and ero tenes cslh Sanit” inedand ised Financial resources restrict and prevents the pote is, at nthe shortage of epi (developing count). ‘communicational rover vnc uly appar bese ote ripe potentials compenton inthe market, technologt np THe swans among he eNTenc ot be reat a financial institutions and business con we succeed. tnfrmaion Teelogy and Commencation fon ehnologynow-a-daysis playing Vital le in every apes of uma through which communication has no mor iste, The quicker modes of communication atc vi petworking web technologies. All these have st. However. sco 07 industrial scenario though the quick and up-to-date informatie” ren levels of manageme a er pteipne substantial changes inthe process of deision-making and is implementation. smmunication gap. ‘Enireprencurs need to be aware of informs Teal and other developments so that they can successfully CAITY a efficiently and effectively by the governmen departments ficken communication is very smpotan the infor neeggerent 59S stakeholders sstakcholdrs ae more knowledgeable and hold the up-to-date information F008 the development of asa saya major role in providing cent information about the market conditions ‘which in turn rest preneit and the stakeholder. Tony's ihe indie these sak sts in vpvolvement of entre Globalization resent, busines functioning in an open environment saeomptn- Theor fr any company ih x 10 Ne this globally compet soni price, quality and delivery of produtservie = what ae the various barriers to entrepreneurship? How 0 ‘overcom aries tis has resulted in ~ 1 3, must be competitive here there are no geographical bound itive environment je such barriers. Model Paper: answer + sores to Entrepreneurship ‘The fllowing figure depicts the various bariers to entrepreneurship, Entry be [e,_.J ames 0 meas weprenewship amie Environmental Exit ‘aries Barrier: riers to Entrepreneurship 1 Rnty Barsers The tr which esti the gcess oss opporuniies rere as entry bates. They (0 Lack of inte by id prefe a Scepnics -determi resin business and efeenc to sevice and soured jobs det fico such income, access to power, job satisfaction and lack of motivation. : ee i (Looking forward to start an entrepreneurial venture with an aim to gain some experience. ‘WESTROM ALL-IN-ONE JOURNAL FOR ENGINEERING STUDENT = SIA GROUP.entrepreneurial venture 8 ENTREPRENEUHSHIP AND SMALL Gap Tablig w pln and arange financial resources required Wo star an iv) Absence of confidence to carryout business because of factors such as absence ‘of academic and technical Komeda of aegis and 30 on (0) Lack of suppor and eiivation from family and fends due t.a thought that entrepreneurship Survival Batters The factors which hinder the continuation of business entities are termed as: survival barriers. They are, @) Inability to cope up with ver changing technological tends. is risk oriented. i) Existence of restricting practices in the capital market. (iil) Inefficient management of resources. (iv) Absence of guidance and support from government. (9) Lack of necessary information, (+i) High degree of competition from new entrant. 3. Pxit Barriers “The factors which restrict the termination of ventures are termed as ‘exit barriers’. They ae, G)__Incapability of an entrepreneur to recognize the downfall of the business. Gi) Excess demand for managerial and marketing skills which isnot sufficiently available. Gil) Fear of failure. Barriers to entrepreneurship can also be categorized as follows, 4. Environmental Barriers “The limiting factors ftom the surroundings in which the business operates are environmental barriers. They are, (i) Lack of availability of raw material Gi) Scarcity of skilled workforce (iii) Innovative technology and advanced machinery. (iv) Existence of Bureaucracy and red-tapism, (9) Financial delays. $. —Persomal Barriers ‘The limiting factors inherent in an entrepreneur himself are known as personal barriers. They are, (3) Under motivated to achieve the targets. (ii) Absence of confidence. (ii) Non-supporting nature of friends and family. (iv) Expectation to get quick outcomes. 6. Societal Barriers ‘The limiting factors from the society are termed as societal barriers. They are, (i) Societal restrictions to start the business snce to service and security rather than risk oriented business. (ii) "Societal pre Overcoming Measures ‘Varios barriers to entreprencurial growth and development can be overcome by the following measures, i) Changing mind set of individuals and society. {)) Including entrepreneurship in academic curriculum, (iii) Staring and establishing entrepreneurial development cells in colleges. ivy Providing proper guidance and assistance by government, (v) Providing hassle-free credit and special incentives. (vi) Distribution of information at the correct time ans s0 oa, Look for the SIA GROUP G0 {YS on the TITLE COVER before you buy x , 'ar emepeneulPrpectes 19 cgmat are the advantages and di as \dvantages of entrepreneurship. , seen epreneurship business, entrepreneurs are the owners of enterprises who can take their own decisions for success ofthe business. Model Papor 20) 4 de i cone can implement their own ideas in the busines. For examples, stating new vente, adopting 2 jest technologies ete, Under this, entrepreneur has the complete authority to selec that type business in which he is interested. _Emveprencurship business provide high level of profits. Eneprenews ae creative, they express their creativity by executing ther new and creative ideas and ceating successful enterprise. reneuship is extn, bee oi Enepreneuhi i ecing, reas entrepreneurs ey ter wrk as ach ay comes wp with ne oppotiis which ‘challenge their determination, skills and abilities. a M " 4, Enepreneurs can set their oyn income and invest targets in the business as they own the enterprise, Entrepreneurs can actively involve in sotal family activities as entrepreneurship gives them flexibility. stages of Entrepreneurship ‘The disadvantages of entrepreneurship areas follows, 1, -Enreprencurship involves high level of risk 41 Under entrepreneurship entrepreneur's income is uncertain i he may earn income in one month and loose in next month. Ifentrepreneurship is inpartnership form then the authority of making decisions get divided between partners 44. Entrepreneur have to work hard (day and night) forthe success of enterprise. Even he may not take a single leave during heavy work load, 16. Define entrepreneur. Discus in detail classificationitypes of entrepreneurs. Answer : * Mose Papers, a3 Definition of Entrepreneur «good entrepreneur is one who is capable of inspiring confidence in people and has the ability to motivate them to work with him in fulfilling the economic goals set by im.” Casifcation/Types of Entrepreneurs Categorization of different types of entteprencurs based on different criteria is as follows, According to Business Type Based on the type of business, the types of entrepreneurs ae, (Business Entrepreneurs ‘Business entreprenurs are the people who initiate innovative ideas ofthe new products or services and create business. ‘They are mainly concerned with transforming ideas into reality. Entrepreneurs make use of marketing as well as production resources to promote their new business opportunity. They may establish either a large scale organization or small-scale organization. i) Trading Entrepreneurs Trading enireprencurs are those who deal with only trading and do not participate in any production activity. A trading cntteprencur recognizes the potential markels, creates demand for is company’s products and develops a desire aud interest inthe customers. A trading entrepreneur trades both atthe domestic level as well as a the intemational level (ti) Industrial Entrepreneurs Usually, industrial entrepreneurs are the manufacturers who recognize the essential needs of the customers and then produce ‘ormanufactures the similar kind of product according othe customer's needs inthe market and satisfy the market needs “They are product oriented people who basically establish an industrial unit with the hope and desire of making s new product. ‘ecrnaM ALLAVONE JOURNAL FOR ENGINEERING STUDENTS SIA GROUP 1SENTREPRENEURSHIP AND SMALL BUSINES® & =" 1.10 w ‘Corporate Entrepreneurs ‘Acorporate entrepreneur isa person who plans, develops ‘and manages a corporate body. He makes use of his ‘innovative and creative skills in organizing and managing corporate undertakings. Corporate undertakings are mostly registered under an Act, which provides it separate legal identity. For example, a tust which is resstered under the “Trust Act’, ora registered company under a "Companies Act” ‘Agricultural Entrepreneurs Agricultural entrepreneurs deal with the agricultural Activities such as ploughing and marketing crops, fertilizing and other related activities. This type of cntrepreneurs are encouraged to cary out agricultural activity by making use of machines irrigation facility and use of modem technology. Thus, agricultural feneurs perform agricultural and its related centrepr activities. ‘According tothe Technological Use ‘Types of entrepreneurs onthe basis of technology are 8s follows, o i «an “Techni 1 Entrepreneurs “Technical entrepreneurs are most often compared tothe “erafisman”. The technical entrepreneur enbances the quality of goods ina similar way ike that of aeraftsman. His crafismanship makes him lay more attention on production rather tha marketing Non-technieal Entrepreneurs Non-technical entrepreneur does not deal with the technical aspect ofthe busines, they lay more attention fon marketing and distribution strategies in order 10 -dovelop their business. Professional Entrepreneurs Professional entrepreneurs are those who are merely Jterested in starting up a business and not in either ‘maintaining it or promoting it aftr its establishment, ‘The professional entrepreneurs usually sells out the established business and starts up another venture ‘with the help of sale proceeds. Thus, professional enirepreneurs aire dynamic in nature and are very tceative and intelligent and develop alternative projects frequently. According to the Motivational Level ‘On the basis ofthe motivational levels entrepreneurs ae as follows, @ Pure Entrepreneurs A pure entrepreneur isan entrepreneur who is persuaded by the psychological and economic rewards. He enters into the field of entrepreneurship either for his personal Gi) w 0 a Taauced Entrepreneurs epreneurs are the one wh induced enttepre Ja Induced one rrcpereively du tthe gover entreprenk ree and measures which provide fnang policies and rts and other facilites Yo sa incentives, + syate agencies attract induced ent oa J technical and other facilities, soe eta n eT New ent fulfillmes ‘pont fp making wse of their innate qualities (naz taneous enfeprencurs are cTeatiVe, Confident aj, eoregs and -hard working which inspires them y for entrepreseurship. Spontaneous entreprenea greatly convinced by thie confidence level andi, capabilities. ‘According to the Growth On the basis of growth, types of entrepreneurs as Growth Entrepreneurs Mostly, growth enizepreneurs enter into high gop industry with higher growth prospects. Super-growth Entrepreneurs Super-growth entreprencur depict or highlight thy _arowth of performance in their ventures. The growh their performance is visible and clear from the igi of funds, profitability and gearing. ‘According to the Stages of Development (On the basis of stages of development, type: entrepreneurs are, 0 w ay First Generation Entrepreneurs, First generation entreprencur is an individual why creative and innovative in nature and he uses le skills and establishes an industrial unit, He is basa ‘an innovator, who amalgamates various technologs ‘order to produce a new product or a service. Modern Entrepreneurs “Modemnentrepreneus are those who take up he ng ventures ie, those ventures which ae gong along with the changing demand in the marke. Classical Entrepreneurs Classical entreprencur lay more attention ot! customersand the marketing needs withthe belpoft® Supporting venture Classical enrepreneuris as) enfreprencur whose main objective is to maximilet Profits aa constant level or withoutany growth Look for the SIA GROUP Loco {J} on the TITLE COVER before you buyStore Papa Ian hp eae i Gie 8 Comparison ofmale and Tamale anmranour ose! i . The following table shows the Comparison between male and female e o™ i fe ical analysis of results derived fr ald ull derived from various combination of factors. Innovate entrepreneurs are and they uilize their intelligence by making optimum utilization ofthe alternative opportunities. 1d wes of a dynamic information assembler and eneurs are those individuals who possess the characteristic feature of willingness to follow successful reprencurs copy the techniques and technology created by others. They are Model Papers, 030) ntreprencurs, Tointof | ie ci] purerciace Male Entrepreneurs Female Entrepreneurs Resta, | 0 Groene @ Goal oriented E (i) High-level of se confidence. Gi) Medium evel of self confidence. (iy Energetic and enthusiastic, (ii) Energetic and enthusiastic. (Gv), Wealistic and innovative. (iv) Realistic and erative | (0) Opinionated and persuasive. (¥) Tolerant and flexible Suppor | > Business Associates, (Spouse and Family roups riends and Spous 8 (ii) Friends and Spouse (id Trade association, (iy Professional aequsitaees like accountants | Groupe of proesinal women. Gv) spouse. (iv) Close fiends. Tipeot | Construction and Manufacturing Senvice related businesses such as public relations, Business ‘educational services and consulting suaed Sources oF | () Investors @) Personal fans. Pe (i) Bank financing (i) Personal savings and assets (ii) Personal savings and asets. (Gv)_Loans from family and friends Decupational | (i) Master in differenttypes of busines Functions. | () Occupational background is serviceeated Background |) Experience in line of work Gi) Administrative level experience inthe fel (ii) Recognized specials. (Gi) Experience in business arta, Pomot — [() Discharge or layof. () Frustration in the job. Peparture | (ji) Acquisition opportunity. }) Changes in personal environment. (ii) Out performance of present job, sideline in| (ii) Availability of opportunity in te field college or sideline fo curent job. Economic [(@) Age at the startup of business: 25-35. (Age atthe startup of business: 3545, Deedee (ji) Had self employed father. (ii) Had self employed father | (ii) First bom cl (ii) First bom chit. (iv) Received degree in technical area or in] (iv) Received degree in liberal art. business. © [Achievement | (Achievement getting the things done. (@ Achievement achieving the goal (ii) Personal independence-making self image | (i) Independence to carryout their work alone L and status 2 Sia GROUP WS SPECTRUM ALLIN-ONE JOURNAL FOR ENGINEERING STUDENTS1.12 ENTREPRENEURSHIP AND SMALL BUSINESS ENTERPRISES [JNTU'HYDERAgg Q18. Differentiate between entrepreneur and manager. Answer t The following are som ofthe differences between entrepreneur and manage, Difference Entreprene Manager ture “An eniepreneur is eourageous, self-confident | Managers are goal-oriented and ambiiggy>s ‘and optimistic, He makes his own fortune. | they are scared of other's ability with 4 ponte say ce AE | ne ae ll and market. Entrepreneurs are moderate risk] activities and they do not take any ris, takers and they invest heavily 3. |Market research | Market research is conducted to create néw| Market research is conducted in products, to discover needs and Buide pays conceptualisation 4. | Suatus Entrepreneurs do not care about theit status | Managers are very much concerned abou ya, symbol status symbol 5. |Decision making | They are independent with regards to the| They are highly dependent upon yyy decision making process and do not requit | superiors and CEOs o take any decision ng anybody's consent ‘organization, 6. | Failures and Entrepreneurs consider fullures and mistakes | Managers avoid mistakes and postpone fig, mistakes 4s the stepping stones to success and fear | recognition. from these experiences. F 1. [Problem solving | Eareeus ity maak ples ty Managers assign the sks and Soke y spprach oping thei gwm_approeies without | robles SSromaisly considering forma suc. 8 |Famiy twckgound | Enreprenews monly come fom thos Manages belongs to eda ans fame, who eter. had. sal business | mst thee fami members had word or agicutual backgound. Most of the| ped orgnizaon. Manaess a ma enueprencu te have poor reltions wit independent of motes, hold prod lao itt rb a wher andar ite dpendet 9. [educations vet [Enteprenis re citer grt orks Mangers are highly clued and than th, Bt they pes ces mi ofonls sd posses uique ula calfatios ike high chovement motive, |in tems of good management, eve ral thinking, predicting sill, rik bearing| hoy and rast. and so on. Rewards Entrepreneur's reward is his profit which is| Manager enjoys a handsome salary evey not certain, ‘uonth which i fixed and certain in nature. 18. Differentiate, (2) Entroproncur, entreprenourship and enterprise. (b)_Entropreneur and intrapreneur. Answer (2) Entrepreneur Vs Entreprencurship Vs Enterprise Differences between Entrepreneur, Entrepreneurship and Enterprise are classified a follows, Entrepreneur Entrepreneurship Enterprise Meaning [According to Robert D. | Ascording to Schumpeter, enrsprencurship| Enterprise isa corpora Hiscch, entrepreneur isis based on purposeful and systematic business firm, — company a person who is going| innovation, It includes not only. the registered group estas to establish a successful | independent businessman butalso company |a specified purpose new business venture directors and managers who actually carry rust also be a visionary | out innovative functions. leader, a person. who dreams great dreams, Mosel Papert Look for the SIA GROUP LOGO {J on the TITLE COVER before you buyEnirepreneurial Perspectives unit THis a business organiz He isa person by nature Wis a plan or action by nature objective is| Its main objective is to implement plan| Its main objective is to produce | to become a successful successfully for achieving enterprise | goods and services and carn | businessmen, objectives, profit He is @ planner and | It involves process of planning and decision | It provide base for planning and decision maker. making 2 ‘pairepreneur Vs Intrapreneur ‘Some ofthe differences between entrepreneur and intrapreneur are, onjective | His me o = 7 Tniraprencer Tairaproneurs are the innovators and software professionals who lend their innovative ideas to the rzanization under which they employed. | Intrapreneur doesnot gts involved in the decison | taking process and remains restricted to his work. | Nature of | Entrepreneurs rewards vary with the changes | The inrapreneur gst fixed rewards for the work and Rewards | in levels of isk, profit or loss. also extra reward would be given fo his innovations Riskand | Heisthesole responsible person forall the risk | He faces medium or average evel of sk tnvertaingy [and uncertainties associated with the busines. Incther words he face high risk. Enirepencurhimselftkes-are ofthe business as well a the customer. sponsore. Basis Entrepreneur Definition | According to Peter F. Ducker, “He is one who always searches fora charge, responds ait and exploit itas an opportunity” Decision | Entrepreneurs are greatly involved in the decision-making process, Intrapreneur serves himself as custome: and the 4.4 ENTREPRENEURIAL COMPETENCIES 20. What are the characteristic features of an entrepreneur? Answer: Robert D. Hisrich has contributed eight characteristics of an entrepreneur. He suggests that an entrepreneur must be endowed wvih adequate commitment, motivation and skills to start a business. The list of characteristics according to him are as follows, 1 Motivator 2, Self-eonfidence 3. Long-term involvement 4. High energy levels, 5. Persistent problem solver, 6. Initiator 7. Goal seter/objective maker 8. Moderate risk bearer. 1. Motivator “An entrepreneur must be a great motivator. He should motivate people and form teams and groups and must also ensure thatthe group members are motivated on a regular bass. Besides this, an entrepreneur must also create such an environment wherein the individual seeks growth and experiences career development. 2 Self-confidence Self-confidence is an important skill of an entrepreneur without which he/she will not be in a position to motivate his/her ‘employees in achieving collective goals. 3 Long-term Involvement ‘The minimum number of years an entrepreneur must invest in one’s own business varies from’ to 7 years. One must not ‘pect any miracle to take place over night or ina short span of time. The entrepreneurs must be determined and committed once ‘hey get into the business. SPECTRUM ALLIN-ONE JOGRNAL FOR ENGINEERING STUDENTS SIA GROUP QDENTREPHENEUNo: High Energy Levels ‘An entrepreneur must be energeti a success of any individual is highly dependen hhardwork he’she putin his/her tasks. nd dedicated as the ion the efforts and 1 element in entrepreneut’s 1 needs to be ambitious 10 5, Persistent Probles Creativity is an essential characteristics. An entreprenet ‘accomplish a task or solve a problem 6 Mnitiator itor. He must come UP [An entrepreneur mast be an iit vith innovations and new creations and also at the sa Thust be capable of making appropriate and optimum wtilization ofall the resources 7... Goal Setter ‘An entrepreneur must be able to set challenging but realistic goals An entrepreneur must set goals and should define the waystoachieve them. They must avoid deviations and follow the right path 8, Moderate Risk Bearer “Amentrepreneur must bea moderate risk bearer and must team from the failures. It has been rightly said that, “Failures are the stepping stones to success” ‘G21. “Entrepreneurship is the act of creating business or businesses while building and scaling it to generate a profit”, justify the Statement by “xploring the entrepreneurial Competencies and brief on the types of entrepreneurs. Answer: (Wtodst Papert, 2 | May18, 02) ‘Entreprencurship isthe act of creating a business of businesses while building and scaling it to generate a profit” ‘This staement can be justified by exploring the entrepreneurial competencies and types of entrepreneurs. Entrepreneurial Competenci Entreprencurial competencies as per the two studies are discussed below, 1. Entrepreneurship Development Institute of India (EDI study IL Individual Research Studies (IRS). Entrepreneurship Development Institute of India (EDI) Study ‘The EDI study was conducted at Ahmedabad by Entrepreneurship Development Institute of India (EDI) to find ‘out what makes an entrepreneur successful. Few competencies ‘which were identified by this study areas follows, Initiating Nature Entrepreneurs are basically initiative in nature, who take an initiative to establish an enterprise. 10. a 2 1B. M4. 18, Opportunity Seeker i isan opportunity seeker. He ver gy sus opportunities and sets the bey serves wf makes optimum use of i. of these and mal aes inact et rca ra Ea enim = eee commensal cone neal te eine Sree ers aan ‘Anentrepreneur greatly believes in hechis strengtiss Assertive Entrepreneurs are good in asserting their problems others forthe bettermeft of thei enterprise. Convincing Entrepreneurs hold the ability o convince others 8) what they want. Good Controller Enrerneurs very rally examine wd ig other’ work and see to it that itis done according set standards, on Wellwisher of the Employees Entrepreneurs consider employees as an asetof enterprise and therefore make efforts towards ens their welfare. Employees are being treated as one factors of production with emotions and feelings Effective Strategist Establishes the most proficient strategies to inf ‘employees to achieve their goal Look for the SUA GROUP LOGO {J} on the TITLE COVER before you buyurr-_Enveprenewial Perspectivos Tedinidual Research Studies (HRS) Many individual scholars have conducted research sas dezmine he enepeteral compete. James sa ort a each hy at Maas (Chena) cy eta idenied he following compen, 1, Enterprising nature 2, Growth oriented 3. Innovative 4, Welcomes the advanced and latest technology Keenly watches and adapts the changes MeCrory states the following points regarding the eiepenourial competencies, 1, Invests income in enterprise : Emphasizes on quality Versatile in nature ‘Makes optimum use of an opportunity ‘Makes optimum utilization ofthe limited resources. (CTandon enlists the following characteristics, 1. Risk-bearer 2. Flexible 3, “Authoritative 4. Good organizer 5. Good manager. ‘Thus after going through various research studies, ican te coneluded thatthe major entrepreneurial comipetencies can teas follows, 1. Enterprising 2 | Risk-bearer Creative Aspirational High need achievement 3 4 8 6 Change-agent 7. Hard worker 8 “Good organizer 9. Efficient manager 10, Able administrator 11. “Quick decision maker 12. Highly committed 13, Firm determination Types of Entrepreneurs For answer refer Unt ais. 1.15 (022, How entrepreneurial competencies can be developed? Answer + Compétencies are the underlyitg characteristic features ‘an individual, which results in superior performance. This is showeased by an individual's unique/dfferent behaviour in different situations or individuals behaving differently in dif- ferent situations. The Kakinada experiment has proved that the “entrepreneurial competency can be induced among youngsters via ‘education and training. Competency finds expression in human ‘bchavivur. The process of developing competencis follows four steps.as follows, 1. Competency recognition 2.” Selfassessment 3. Competency application 4, Feedback. Competency Recognition “The first step involved in developing a competency is recognizing a competency. Firstly, itis quite essential 10 identify a competency before developing it. Aequiring a new. ‘behaviour develops by understanding and recognizing a specific ‘competence, 2, Self-assessment ‘As soonas the competency is recognized and understood, the next step towards acquisition of a specific behaviours to see ‘whether one possesses the specific competency or not. If yes, then see how Frequently one depicts that competency in her/his real life 7 Depending upon self-assessment the individual is rated nd with the help ofthese ratings the competence level of an individual is determiged 3. Competency Application After knowing one's position and ratings in a particular competency tis essential to practise them on a regula basis in different activites. For the purpose of making new behaviour ‘part and parcel of one’s personality, the particular behaviour needs to be applied more lumber of times even in the simplest activities of one’s day-to-day life. As ithas been correctly said that, “practice makes a man perfect” 4. Feedback ‘After understanding, making new behaviour a part of ‘one’s behavior and then practising a particular behaviour or ‘vompetenee, itis essential to examine one’s own behaviour in order to sharpen and stengthen one's competency. This is nothing but “feedback”. In short, ‘feedback’ is the way of analyzing and determining the strengths and weaknesses of an individual's new behaviour. This would help in knowing hhow the new behaviour has been rewarded, which would further allow an individual to either sustain or give up the exhibition of a particular behaviour in her/his future life. ‘SPECTRUM @LL-IN-ONE JOURNAL FOR ENGINEERING STUDENTS Sia GROUP QZAnswer : sours required because they ire the nes who can deveip gy creates wealth and eeate wealth, the economy must crate obs and job creation Forall this to happen, a supportive regulatory environment should he crested, vengge an enters tied out and a strong capital market should be established. The following five areas must be focuneg ye an entrepreneurial capacity In India, the eneeprenars wth managerial mindset A country cannot develop unti ath through entrepreneurial activity 1. Building Skins An important part of entrepreneurship is experimental leaming. An entrepreneur must develop five important si Personal skills, leadership skills, communication skill, sales skills and negotiation skills. The Indian education system imake Sure thatthe curriculum in universities, colleges and schools is designed to meet business needs. Is also essential ght centres of entrepreneurial excellence in institutions that support entrepreneurship. 2. Enabling Networking and Exehange To carryout the business successfully, people use their personal contacts in professioiial or business networking {he time of crisis, «network willbe of great support to the entrepreneurial firm. Business networking ean be established ay business associations, social networking websites, trade fairs and alumni networks. 3. Creating the Right Eco-System ‘An cco-system isa system in which stakcholdrs are interconnected with each other. The stakeholders include instiagy and individuals. The linkage of individuals inthe eco-system will lead to efficient production and spread of usefl knowl, ‘Thus, itis very important to boost and enhance the eco-system. Institutional support systems, ineubators, venture capitalists, government schemes ete are the components ofthe ecoays for commercialization 4. Providing Access to Capital ince along time, the entrepreneurs of India are facing the problem of insufficient capital, For the suecess of anew basee 's crucial to determine capital requirements, design fund-raising and financial strategies and handle the financial process) policy of government should be attractive to venture capitalist, foreign investors, angel investors, financial institutions ee, that they make investment in new ventures. 5. Providing Incentives, Tax Benefits id Simplify the Bureaucratic Process ‘Tax rates can be reduced to encourage the entrepreneurs to carryout their entreprencurial activity effectively and tol, their earning without paying much tax. One way to give incentives to entrepreneurs is to reduce legal costs to hiring, Bureaus process should be simplified by reducing government mandated paper work at different points while operating the busines 4.6 ENTREPRENEURIAL TRAINING METHODS i j 24. Discuss the popular training methods for entrepreneurial training? Answer + Model Paperah@ ‘The following training methods are used while conducting entrepreneurial training programmes, These progrannesb ‘you create a learning situation. 1. Lecture Method In lecture method, a knowledgeable person delivers a lecture to an audience. itis one of dl method of training. It is used along with other methods that involve conferences, workshops, seminal panel discussions, the simulation method and the laboratory method. nost popular and buzz groups eb 2. Participative Methods In participative training methods, the content of training programme's discussed. Trainees participate and undetsto ‘group process. It involves discussion of things like belief, knowledge, attitudes and experi ring, The various pati training methods are discussed as follows, Look for the SLA GROUP Loco JB on the TITLE COVER before you buyay-t_Entepreneural Perpectvos Seminar when a small r0up Of people give a formal presentation pec toni whichis f eommon interest everyone, ota 3 “mina”. The pesnation allowed by @ ‘sete i ower Conference ‘Tis method is usually used when a particular subject is ined before stating a project, Ina conference, E earl 1a conference, Experts sed to give their ideas onthe subject. In the initial ses. elie conference te chanperson spells out the purposes, eve sone and specifi pis fr dscusion ‘Buzz Group Buzz groups are nothing but the sub-division ofa large sp Inhis method, everyone is given an opportunity to ex- scr option on the topic. There are only 5-10 participants feSjue in the discussion and interaction. The leader ofthe ‘rou presents atopic andthe discussion takes pce in the eS @ o e nel Discussion In panel discussion, the participants are given an op- rity 1 hear the viewpoint of different people who have ire knowledge on a particular topic, The moderator starts ff dscussion, leads the discussion, closes the discussion and sels the discussion Case Method Most of the entrepreneurs use this method to ensure ac- ivepartisipation and participative learning. This method helps ‘improving the skills, owledge and attitude of trainees. The tsemethod works effectively when the trainer prepares the case tn liver it ina classroom situation in an effective manner. (Role Play In role play method, participants are given a particular tleto perform. Role play helps the participants to understand ‘setehaviour of other individuals and their own emotions and ‘eines. This technique works effectively in bringing area time sation in the classroom. (@) Laboratory Method In laboratory method, participants are encouraged to Sar experience, so that others can lean from it. This method. ‘abo inownas D-group, F-group, L-group, sensitivity traning ‘The main assumption of this method is thatthe collective ‘werk ofthe people wil increase the productivity and efficiency elie group, (®) Simulation Method The simulation method testo create ane rel life situ- ‘tin the form of a game. This method gives an opportunity ‘tains to understand how their behaviour impacts the situ- ‘on. Using this method, response and reactions are generated on the participants ral feelings. 17 (Workshop In workshop method, training activities are designed Jo solve specific problems. The main objective of this method is to take contributions from all individuals and to effectively Utilize the available resources to solve problems and to plan necessary action for future. The success of workshop depends ‘nthe participants. @ Syndicate Method Syndicate method is designed for teaching and learning situations, especially in top-level management training. Par- ticipants are divided into small groups, each group containing. 8 10 participants. This small group is called as "syndicate". ‘he instructor gives a brief to each syndicate along with a background poper. The syndicate makes a discussion on the various issues involved inthe subject area. This method helps ‘the participants in learning things from their own participation and fiom other members involved in discussion. 417 envnceRenciRRL MARE 25. Define motivation. What are the various motivational practices available for entrepreneurs. Answer : Model PapersV, 3a) Motivation ‘The term ‘motivation’ has been derived from the word ‘motive’. Motive is defined as one's inner state of mind that moves or activates or energizes and directs one's behaviour towards one's objectives, Dalton E. SfeFarland defines, "motivation refers to the ‘way in which urges, drives, desires, aspirations or needs direct ‘contol or explain the behaviour of human being”. ‘Thus, itcan be inferred that motivation isa process which ‘motivates the inlividual to perform action and forces him to Continue the same action forthe accomplishment of goals. ble for Entrepreneurs reprencurs can use many motivational practices to ‘motivate the employees in achieving the set goals. Some ofthe Motivational Practices A, important practices are, 1 Rewards Employers are greatly motivated by rewards in the {form of seniority and membership, job status, competency and performance, 2 Goal Setting One ofthe powerful motivatiGnal practices is "Goal Set- ting". Ifperformanee goals are set in a correet manner, then it will motivate the employees toa great extent, 3. Flexibility Employees fee! motivated when they are provided with flexi time, flexible benefits. £80 and other such benefits, ‘ECTRUM GLLAN-ONE JOURNAL FOR ENGINEERING STUDENTS, SIA GROUP QS118 ENTREPRENEURSHIP AND SMALL BUSINESS ENTERPRISES ru nroena 4 Empowerment ‘When the employees are empowered, they believe that they own the jobs. Ths, it ead to improvement in of employees. : St Pefoma, S OBMod Organizational chaviour mosifcation or OB mods Human Resource Management ecique we 1 OVE jogs behaviour of emplayess, This technique i based onthe principle of law of effet. According to this Principle a Psy pet ‘the samme behaviour depending on its earlier outcomes. If earlier consequences are postive the person FePEAS the behayig (OB mod can be used as a powerfull motivator as itis based on the principle of law of effet. 6 Job Design Jol esi refers to a process of assigning task toa job, Employes can use thi tol to avivateeTDIONES. The ggg roaches to job design are job enrichment, job rotation, job enlargement, ergonomics, social technical systems et, 7. Give Chance to Employees Employees who are nit abe to perform well shouldbe given a chance by giving them a diferent tsk OF by shifting gy ‘onew work environment. This will motivate the underpecforming employees to perform well If the employee fails even after the chance is given, then the management will not be left with any other option. sespend the workers and fre the managers. ‘@26. Discuss the model for entreprerteurial motivation. Answer : ‘An analysis of why individuals stata venture and how they difer from other unsuccessful businessman helps in ngs standing the relationship between nterensr'smotvaton and ish sunning beavis Inn connection Heron nig 4 Sapienza state that, "Because motivation plays an important pat inthe eretion of new organizations, theories of organi ‘reaton that fail to adress tis notin are incomplete". One more researcher added to this by saying that understanding mg vidual by his orher psyehologcal profile isa valuable research as individuals are only the enerpizers of entrepreneurial pag In other words, entrepreneurial motivation can be identified as an individual's search fora new venture creation nd § desire to sustain that venture. Enteprencurial deste o sustain the ventures directly linked with entrepreneurial satisfaction, Ga attitudes and background determines entrepreneurial satsfaeton. In his connection an approach ora mode! for entrepeneg, motivation was developed to understand the motivational process and entrepreneur expericnees, ‘The illustration below represents a model of entrepreneurial motivation Expectasoneaus| ‘ompanson, Rewards Decision tobenave Envepreneaal Envepeneusal PC + PE + PG + BE + Idea —>{ cavironmeatly, sates ‘management Vente oatcom| Exccation/Oucome ereption Where, PC ~ Personal Characteristics, PE — Personal Environment, ~ Personal Goals, BE ~ Business Environment. Figure: A Model of Extraproneuria! Motivation, Look for the SIA GROUP LOGO on the TITLE COVER before you buytt Enrorenerial Perpocvos 1.19 ‘nbepene's dechon obeaveentetesurily i combination and ivavemnt of vet factors ch as -PC pf, Band He abou basins, cle ndrstanding ofall these specs makes an nv hae a a etepene Pics next proceeds by the strategy applied and entrepreneurial management hat went nto venture outcomes (success! ep ses a sere ten uch sucesreuts inrvards exis). Finally, the ener express ard with actual oulcomes/results, p sao eco ue expected outcomes ae fess thar achieved resuls, the entrepreneurs are motivated 6 continue the same entrepreneurial ennicut Hf failure occurs then the entrepreneurs get demotivated and this demotivation effects the decision to Behave repeal gat. What are the varlous needs to be fulfilled to motivate entrepreneurs? Explain answer! itis very important to motivate the entrepreneur forthe growth of entrepreneurial activity: According to McClelland, pieverent motivation is important because itis the bass of entrepencurial personality. When entrepreneurs are motivated, it “ied to ezonomie and social development. Motivation fulfils the following needs of entrepreneurs, 1, Need for aiiaion. Need for power. is Need for achievement, According to McClelland, the above needs work simultaneously ona person, However, the need for achievement dominates ite tbr need when it comes to entrepreneurs 1 Need for Afitiation Need for afi tions with people jon refers tothe need of establishing and carrying out cordial and amiable re ‘Man being a social animal, like to interact and be with others in situations where they el they belong and are accepted, ele wth high need for afiiation usualy derive pleasure from being loved and tend to avoid the pain of being rejected. They rPtoncerned with maintaining pleasant social relationship, enjoying a sense of intimacy and understanding and enjoy consoling {nd helping others in trouble. 1. Need for Power [Need for power refers to ai individual's wish to control and dominate others via physical objects and actions. Power is the ability to induce orinfluence behaviour Power motive hasbeen formally recognized and studied fora relatively lang time, Power isthe need to manipulate others or the drive for superiority over others. Individual high in ned for power (n! PUR) enjoy being “incharge”, strive fo influence over others, prefer tobe placed into competitive and status - oriented situations uted to be more concerned with prestige and gaining influence ove others than with effective performance. People with high power need are forceful, outspoken, hard headed and demanding, 3. Need for Achievement [Need for ahievement refers to an individuals wish o achieve something with hisher own efforts. n other words, it means that an individual will achieve excellence in efforts. [Need for achievement is a distinct human motive that ean be distinguished from other needs. Its the desire to excel, to achieve in elation to a set of standards and o stive to succeed. The need to achieve acts asa motivating factor for entrepreneurs. Besides this it also motivates and encourages the employees to achieve a set objectives ofthe enterprise. An entrepreneur can ‘ntivate the cmployee by ereating a desire to attain the set objectives. MeClelland points out few characteristics ofthe people sib igh need for achievement areas follows, (Thee goals ae average, real and achievable in nate. (i) They require correct and real feedback of their performance (a) They posses ned for achievement for achieving the st goals (6) They take up challenging tasks. (0) They select sucha situation wherein they ean find solution to their problems. SPECTROM ALL-IN-ONE JOURNAL FOR ENGINEERING STODENTS SIA GROUP 31.20 1.8 MODELS FoR ENTREPRENEURIAL DEVELOPMENT €28. List out the three models for entrepreneurial development. Discuss in detail psychological ‘models for development of entrepreneurship. Answer : Model Paper, a3(a) ‘Models of Entrepreneurial Development The three models of entreprencurial development are, 1. Psychological models 2. Sociological models 3. Integrated models, Psychological Models The Psychological model is built on the bass of psycho- logical approach to entrepreneurship. The idea of psychological theory is based on the understanding of the differences in the attitudes of individuals. The theory states that a person becomes suecessful entrepreneur because of his internal ability toanalyze and forecast a situation Following are the vatious psychological modelstheories Proposed by different psychologists and professors, (a) McClelland’s Theory of Achievement Motivation David McClelland explained the development of ‘entrepreneurial activity from a psychological point of view: According to him, entrepreneurs prefer doing things in a better way and make effective decisions in uncertain situations. ‘Therefore, it is very important to motivate entrepreneurs for the growth of entrepreneurial activity. According to the McClelland’ theory of achievement motivation, there are three motives for achieving things, 1. Need for power, 2. Need for affiliation and 3. Need for achievement. (b) Theory of Withdrawal of Status Respect According to Everett Hagen's theory of withdrawal of status respect, entrepreneur is a creative personality who want to bring about a change and is motivated to achieve something. ‘The theory suggests that the growth of entreprencurship has been very slow and there are less chances that it wll ake place in the same generation, Everett Hagen argues that the stability of traditional society may get disrupted by some societal changes which may also bring psychological change in an individual or a group. According to him, the withdrawal of status respect may take place, (i) When traditional group is displaced (by force) from its previous status. Gi) When the group migrates to some other place'or a new Look for the SIA GROUP LOGO {JB on the TITLE COVER before you buy ENTREPRENEURSHIP AND SMALL BUSINESS ENTERPRISES [JNTU-HYDERAgg) (¢) _Interna-External Locus of Control Theory Ths inert eta ew of cota tay se er LD Ree of Ohio ive PC fate cna pore’ selFconfidence and how best sec omertad ernet become ane col ae mea fc 8 erin eh inhisow ably selfeonhaaes temas ten yi 7 Totes of nual ip In dterining divi ks the ca achieve the gal the iia ts Neral cue conor oug AN rec omehne cool xeral ow of eye logical mo ay @29. Explain the soc! a entrepreneurial development. fo Answer: Model Pia ‘Accoxding tothe sociological theory of entrepren social cultures are the major driving forces byyt entrepreneurship. The entrepreneurs ty t0 carryout i businesses as per the expectations of the society ‘expectations are usually based on customs, beliefs and “There are sociological modelsthcores proposed by Max Wag, Frank W. Young, Thomas Chochran and Hozelist, 1. Max Weber's Theory of Religious Beliefs ‘According othe theory of Max Weber, ntep aetiviy isinflunced by religious belies. Religious tay have animportantrole to play indetemining the entepreneag, attitude towards limiting oF Benetating profits. Acton ‘Weber, the growth ofan entrepreneurial activity depends pay ‘on society's ethical values | ‘Weber think that "spirit of capitalism” helps the sa, in acquiring wealth Capitalism encourages the soviet ofa ‘on hard work, discipline and honesty. When the society hang spirit of capitalism along with the motive of prof itean by 4 large number of sucessful businesses. Weber also made a istition between the "spiitofegh talism” and “adventurous spirit. While the spint of caiag focussed on tit discipline, the adventurous sprit i epa nthe fee fre of impulse. Anentepreneur becomes sce ‘when he/she is able fo strike a balance between discipline sy impabs. : 2, Frank W. Young's Theory of Group Level Patten According to Frank W. Young, In a society, there et _gr0ups which may react in two conditions, (@) When a group have more institutional resources other groupsa the same sytem level Ina lagers ifthereexsta sub-group with low status it wil die an entrepreneurial behaviour provided that it ast institutional resources than othe in that society. (©) When group isnot allowed to access importa network and experiences low recognition and sas will ty to compete with other groups to acquire sit recognition isHoselist’s Soci-Cultural Theory According to Hozelist's socio-cultural theory, there can uothincatrepreneurship through a specific social ule. sncurial activity OCCUFS as a result of cultural ct ee fate nctons and role expectations. Hozelist suggests tha sera roth 06 the socks tha allow Variability in choice of paths of life and Non-standard socialization of individuals ‘The approach of hozelist focusses on the theory of de- ane anit a0 Bas assumption that those who bring about ‘oc nthe society must deviants Because they dont follow nal ways anymore Ww 44 Thomas Cochran's Theory of Entrepreneurial Supply Thomas Cochran agrees with the approach of hozilist coding to Thoma, the éotrepreneural urge ofan individual eemined by the environment in which heshe fs gown up fnesuggst that the performance ofa business/entrepreneur is, ermined bythe values and role expectations ofa specific so- troup 19 which the entrepreneur belongs The attitude of an cur towards an oecupation determines his performance cil (30. Discuss ‘models for entrepreneurial development. Answer = Model Papert ata) Integrated models for entrepreneurial development iacludes, 1. Entrepreneurial disp ion proposed by TV. Rao Il, Stages for promoting small entrepreneurship by BSS, Venkata Rao. LIL. Entrepreneurial evelopment cycle by M.P.Akhori 1 TLV. Rao had included some factors in entrepreneurial Uisposition. The existence of all these factors fosters teteprencutship development. The factors are as follows, {a) Inn entrepreneurial activity, long-term involvement isthe goal at activity level or at thinking level. Long- term involvement is seen as target to be achieved by an entrepreneur (b). Social resources, material resources and personalresources _are essential to achieve success in entrepreneurial (©) Socio-poltial system is essential to set-up, develop and expand the enterprise. (@ Need for motive (Achievement motivation) isthe main reason behind entrepreneurial activity SPECTROM ALL-IN-ONE JOURNAL FOR ENGINEERING STUDENTS small entrepreneurship. The fi e stages are, Stage-1: Stimulation ‘timation isthe fist stage in which, people in backward areas are educated about entrepreneurship and their intrest in undertaking industrial activity is activated. The various activites carried out at stimulation stage ae, (Setting up industrial environment. Gi) Defining policy statement highlighting the role of smatl ‘enterprises. (Gi) Planning special schemes and organizing industrial development programmes. (iv) Establishing suppor institutions. Stage 2: Identification “The prospective entrepreneurs may be identified from, (9 Workers in factory. Gi) People who had completed graduation in business administration and management. (Gi) Rural artisans (iv) _ People trained in engineering and technolony. ‘Stage-3: Development Development includes development of managerial training programmes and motivation programmes. Stage-4: Promotion Promotion stage includes initiatives ofthe government to promote stall entrepreneurs. Siage-S: Follow-up, In this stage, the policies and programmes of the goverment are reviewed with an intention to improve the effectiveness of such policies and programmes. IML, Entrepreneurial Development Cycle Entrepreneurial development cycle is proposed by MP. [Akhori The following figure depicts ‘entrepreneurial develop- ‘ment eyele [ENTREPRENEURIAL DEVELOPMENT1.22 1 Stimulatory Activities Stimulatory activites include, (Planned publicity for entrepreneurial opportunities Gi) Providing education related to entrepreneurship Gi) Tdentifying the best entrepreneurs using scientific methods iv) Setting up forums for entrepreneurs. (9) Recognizing and giving reward to existing entrepreneurs 2. Support Activities ‘The various suppor activities include, (Registration of enterprise Gi) Developing product prototype. (Gil) Arrangement of and, finance, power and common facility Gv) Getting approvals and licenses. 3 Susta ing Activities The sustenance activites include, (Modernization, (i) Diversification. (iil) Expansion (iv) Getting additional finance. (8) Research and developinent suppor for enterprise survival (vi) Providing support forthe growth of entrepreneur. 1.9 THE PROCESS OF ENTREPRENEURIAL 7 DEVELOPMENT Q31. Explain the entrepreneurial motivation approaches and discuss the process of entrepreneurial development with appropriate illustrations. Answer + Moti Approaches for Entrepreneu The three entrepreneurial motivation approaches are, 1. Need for Achievement (nAch) 2. Need for Power (nP) and 3. Need for Affiliation (nM. 1, Need for Achievement (nAch) Need for achievement refers to an individuals’ wish to achieve something with hisTher own efforts. In other words, it ‘means that an individual will achieve excellence in efforts, 2, Need for Power (nP) [Need for power refers to an individual's wish to control and dominate others via physical objets and actions. 3. Need for Affiliation (nAM1 ‘Need for affiliation refers tothe need of establishing and carrying out cordial and amiable relations with people: ENTREPRENEURSHIP AND SMALL BUSINESS ENTERPRISES [JNTU-HYDERABay, Process of Entrepreneurial Development Thee ar thee sages involved Mong py become entrepreneur, Figure: Pracess af Entrepreneurial Development In this stage, stimulatory activities are catied oy ‘ereate interest in entrepreneurs. These activities acta for deyeloping entrepreneurs in the society. The stimuli setivities include, (i) Planned publi (ii) Providing education related t entrepreneurship, (ii) Providing motivational traning and counselling t yoy cenlreprencuts. (iv) Wentifying the best entreprencurs using scicaig methods. (6). Guiding the enrepreneurs in selecting product or ser and preparing project repors. (vi) _ Setting up forums for entrepreneurs. (oi) Recognizing and giving reward to existing entrepeng Stage-2: Support Stage In support stage, support activities that facilitate creation of business are implemented, Entreprencursip ‘nurtured and promoted when support activities are carried ag “The various support activities include, (Registration of enterprise. i) Developing product prototype. ‘ (ii), Armangementofland, finance, power and common fai centre, Gv) _ Providing management consultancy services and ‘marketing support, : (9) Guiding the entreprencurs in selecting the machina it plant. (vi) Getting approvals and licences, Stage-3: Sustenance Stage Sustenance activities are implemented in this stag, Ths activites help the entrepreneurs in operating their buss eliciently within a society. The sustenance activities lel, ‘Modernization Diversification me Expansion Getting additional finance Research and development support for enterprise suit Providing support for the growth of entrepreneur Look for the SIA GROUP Loco {QB on the TITLECOVER before you buy a1?