Entrepreneurship & Innovation: Department of Computer Science and Engineering - (R19)

DEPARTMENT OF COMPUTER SCIENCE AND ENGINEERING – (R19)
INTERNAL EXTERNAL TOTAL

III B.TECH L T P CREDITS
MARKS MARKS MARKS
II SEMESTER
2 0 0 40 60 100 2
Code: 19BCC6TH01 ENTREPRENEURSHIP & INNOVATION
COURSE OBJECTIVES:
 Creating awareness among the students about the significance of entrepreneurship and its
social relevance.
 Imparting knowledge to the students on institutional support available to start a business
venture
 To understand the significance of entrepreneurial training in the development of new and
existing entrepreneurs
COURSE OUTCOME
CO 1: : Outline the concepts of Entrepreneurship.[K2]
CO 2: : Create the awareness on creativity and innovation.[K6]
CO 3: : Adopt the Entrepreneurship Development programs[K6]
CO 4: : Evaluate the project planning and feasibility studies.[K5]
CO 5: : Analyze the concept of small and micro enterprises.[K4]
SYLLABUS:
UNIT –I
ENTREPRENEUR AND ENTREPRENEURSHIP
Entrepreneur – Definitions, concept of entrepreneur, characteristics of entrepreneur, types of
entrepreneurs, concept of entrepreneurship, characteristics of entrepreneurship, role of
entrepreneurship in economic development, ethics and social responsibilities of an
entrepreneur, Financial institutional support to entrepreneurs(IDBI,SISI,DIC,NIESBUD,
Commercial banks etc.,
UNIT-II
CREATIVITY AND INNOVATION IN ENTREPRENEURSHIP
Meaning and concept of creativity - Nature and characteristics of creativity -Creativity
Process- Factors affecting creativity - Meaning and Importance Innovation - Process -
Distinguish the Creativity and Innovation.
UNIT –III
ENTREPRENEURSHIP DEVELOPMENT PROGRAMMES
Designing Appropriate Training Programme to inculcate Entrepreneurial Spirit -Training for
Entrepreneurs, Entrepreneurship Development Programme (EDP) – Need and objectives of
NARASARAOPETA ENGINEERING COLLEGE (AUTONOMOUS) Page 1

DEPARTMENT OF COMPUTER SCIENCE AND ENGINEERING – (R19)
EDP’s -Phases and evolution on EDP’s existing and new Entrepreneurs.
UNIT –IV
PROJECT PLANNING AND FEASIBILITY STUDIES
Meaning of a project, Project identification – Sources of new Ideas, Methods of generating
ideas, Project selection, - Project Feasibility Study -Project evaluation and Techniques (PBP,
ARR, NPV, IRR & PI).
UNIT –V
SMALL AND MICRO ENTERPRISES
Importance, definitions, MSME's Development Act 2006 – policies and their support to
MSMEs - Growth of Firm and growth strategies, Factors inducing growth – sickness in small
business and remedies.
TEXT BOOKS:
1. Arya Kumar , “Entrepreneurship”, Pearson, Publishing House, New Delhi, 2012.
2. VSP Rao, Kuratko, “Entrepreneurship’, Cengage Learning, New Delhi,2012
3. ShoimoMaital, DVR Seshadri, “Innovation Management”, Response Books 2007
REFERENCE BOOKS:
1. B.Janakiram, M Rizwana , “Entrepreneurship Development”, Excel Books, ND, 2011
2. P.C.Shejwalkar , “Entrepreneurship Development”, Everest Publishing House, ND, 2011
3. Vinnie Jauhari& Sudhanshu Bhushan, “Innovation Management”. Oxford University
Press, 2014.
WEB REFERENCES:
1. https://www.sciencedirect.com/science/article/abs/pii/S0362331900000604
2. https://www.emerald.com/insight/content/doi/10.1108/ET-02-2013-0018/full/html
3. https://openpress.usask.ca/entrepreneurshipandinnovationtoolkit/chapter/chapter-9-
innovation-and-entrepreneurship/
NARASARAOPETA ENGINEERING COLLEGE (AUTONOMOUS) Page 2
Bond007
NARASARAOPETA ENGINEERING COLLEGE, NARASARAOPET
(AUTONOMOUS)
DEPARTMENT OF COMPUTER SCIENCE AND ENGINEERING
III BTECH II SEMESTER, ASSIGNMENT-I, MARCH-2022
----------------------------------------------------------------------------------------------------------------
SUBJECT: ENTREPRENEURSHIP AND INNOVATION DATE: 14-03-2022
DURATION: 30 MIN MAX MARKS: 10
TIME: 09:30 TO 10:00
Knowledge
Q. Course Level as
Questions Outcome Per Marks
No (CO) Bloom's
Taxonomy
1. Explain the characteristics of entrepreneur. CO1 K2 5
2. Classify the various types of entrepreneurs. CO1 K4 5
3. Explain the characteristics of entrepreneurship. CO1 K2 5
Explain the role of entrepreneurship in economic

4. CO1 K2 5
development.
Classify the various ethics and social

5. CO1 K4 5
responsibilities of an entrepreneur.
6. Explain the concept of Entrepreneur. CO1 K2 5

(AUTONOMOUS)
III BTECH (CSE) II SEMESTER, ASSIGNMENT-II, APRIL-2022
----------------------------------------------------------------------------------------------------------------
TIME: 09:30 TO 10:00
Knowledge
Q. Course Level as
No (CO) Bloom's
Taxonomy
1. Define creativity and Explain nature of creativity. CO2 K4 10
2. Explain the characteristics of creativity. CO2 K4 10
3. Analyze the factors affecting on creativity. CO2 K4 10
4. Explain the process of creativity. CO2 K4 10
5. Explain the importance of innovation. CO2 K4 10
6. Distinguish the Creativity and Innovation. CO2 K2 5

(AUTONOMOUS)
III BTECH II SEMESTER, ASSIGNMENT-III, MAY-2022
----------------------------------------------------------------------------------------------------------------
TIME: 09:30 TO 10:00
Knowledge
Q. Course Level as
No (CO) Bloom's
Taxonomy
1. Explain the need of FDPs. CO3 K1 10
2. What are the objectives of FDPs? CO3 K2 10
3. List and explain the phases of FDPs. CO3 K1 10
4. Illustrate the characteristics of project. CO4 K2 10
Explain the various steps process of project

5. CO4 K4 10
identification.
6. What are the sources of new ideas? CO4 K2 10

(AUTONOMOUS)
III BTECH II SEMESTER, ASSIGNMENT-IV, JUNE-2022
----------------------------------------------------------------------------------------------------------------
TIME: 09:30 TO 10:00
Knowledge
Q. Course Level as
No (CO) Bloom's
Taxonomy
1. List out the methods of idea generation CO4 K4 5
2. Explain the project feasibility analysis CO4 K2 5
3. Discuss the various steps of feasibility analysis CO4 K6 5
4. Explain the types of feasibility analysis CO4 K2 5
5. Explain the importance and features of MSME's CO5 K2 5
Discuss the various policies and their support to

6. CO5 K6 5
MSME's
NARASARAOPETA ENGINEERING COLLEGE: NARASARAOPET
(AUTONOMOUS)
III BTECH II SEMESTER, MID-I-DESCRIPTIVE, APRIL-2022
----------------------------------------------------------------------------------------------------------------
SUBJECT: ENTREPRENEURSHIP & INNOVATION DATE: 18-04-2022
TIME: 02:30 PM TO 4:00 PM
Answer all Questions
Knowledge
Q. Course Level as
No (CO) Bloom's
Taxonomy
a) Explain the characteristics of an entrepreneur. CO1 K2 5

1. b) Explain the role of entrepreneurship in economic
CO1 K2 5
development.
a) Analyze the factors affecting on creativity. CO2 K4 5

2.
b) Distinguish the Creativity and Innovation. CO2 K2 5
Explain the importance of entrepreneurship

3. CO3 K2 5
development programme.
NARASARAOPETA ENGINEERING COLLEGE: NARASARAOPET
(AUTONOMOUS)
III BTECH II SEMESTER, MID-II-DESCRIPTIVE, JUNE-2022
----------------------------------------------------------------------------------------------------------------
SUBJECT: ENTREPRENEURSHIP & INNOVATION DATE: 20-06-2022
TIME: 02:30 PM TO 4:00 PM
Answer all Questions
Knowledge
Q. Course Level as
No (CO) Bloom's
Taxonomy
Explain the Phases of entrepreneurship

1. CO3 K5 5
development programme.
a) Analyze the sources of new Idea. CO4 K4 5

2. b) Discuss the methods of generation ideas
CO4 K6 5
Innovation.
3. a) Explain the importance of MSME’s. CO5 K5 5
b) List out the various types of growth strategies CO5 K4 5

UNIT-I
ENTREPRENEUR AND ENTREPRENEURSHIP
INTRODUCTION
An entrepreneur is ordinarily called a businessman. He is a person who combines capital and

labour for the purpose of production. He organizes and manages a business unit assuming the
risk for profit. He is the artist of the business world.
In the words of J.B. Say, “An entrepreneur is one who brings together the factors of
production and combines them into a product”. He made a clear distinction between a
capitalist and an entrepreneur. Capitalist is only a financier. Entrepreneur is the coordinator
and organizer of a business enterprise. Joseph A Schumpeter defines an entrepreneur as “ one
who innovates, raises money, assembles inputs and sets the organization going with the
ability to identify them and opportunities, which others are not able to fulfil such economic
opportunities”. He further said, “An entrepreneur is an innovator playing the role of a
dynamic businessman adding material growth to economic development”.
An entrepreneur is the founder of the enterprise who identifies opportunities, assembles

skilled manpower and necessary resources for the operation of the enterprise, attracts persons
and financial Institutions and takes psychological responsibility for managing the enterprise
successfully.
The word ‘Entrepreneur’ is derived from the French word “Entreprendre” means, “to
undertake.”
Entrepreneurs are action-oriented highly motivated individuals who take risks to achieve
goals.
CONCEPT OF AN ENTREPRENEUR
An entrepreneur is a highly achievement oriented, enthusiastic and energetic individual. He is

a business leader. He has the following characteristic:
 An entrepreneur brings about change in the society. He is a catalyst of change.
 Entrepreneur is action-oriented, highly motivated individual who takes risk to achieve

goals.
 Entrepreneur accepts responsibilities with enthusiasm and endurance.
 Entrepreneur is thinker and doer, planner and worker.
 Entrepreneur can foresee the future, seize market with a salesman’s persuasiveness,
manipulate
 Funds with financial talent and smell error, frauds and deficiencies with an auditor’s
precisions.
Y.SURESH, MBA, M.Com (M.PHIL)
 Entrepreneur undertakes venture not for his personal gain alone but for the benefit
ofconsumers, government and the society as well.
 Entrepreneur builds new enterprises. He possesses intense level of determination and

a desireto overcome hurdles and solves the problem and completes the job.
 Entrepreneur finds the resources required to exploit opportunities.
 Entrepreneur does extraordinary things as a function of vision, hard work, and

passion. Hechallenges assumptions and breaks rules.
 Although many people come up with great business ideas, most of them never act
on theirideas.
Characteristics of an Entrepreneur
An entrepreneur is a person who is action-oriented and highly motivated to take a risk and to
achieve such a goal dot brings about a change in the process of generating goods or services
or re-initiates progress in the advent of creating new organizations. Therefore, experts have
nine characteristics for the entrepreneur from different conceptual viewpoints.
9 characteristics of an entrepreneur are;
Entrepreneur is an agent.
Entrepreneur is a risk taker.
Entrepreneur is a profit maker.
Entrepreneur is an achievement motivator.
Entrepreneur is a capital provider.
Entrepreneur is the determinant of the nature of the business.
Entrepreneur is an innovator.
Entrepreneur is a reward receiver.
Entrepreneur is a challenge taker.
The characteristics that encompass the concept of the entrepreneur are discussed below:

1. Entrepreneur is an agent
An entrepreneur is perceived as an economic agent who assembles materials for producing

goods at a cost that ensures profits and re-accumulation of capital. He is also understood as a
change agent who brings about changes in the structure and formation of the organization,
market and the arena of goods and services.
2. Entrepreneur is a risk taker: An entrepreneur is a person who identifies the nature of

risk and takes a decision. Entrepreneur is a risk taker while undertaking a venture.
3. Entrepreneur is a profit maker: An entrepreneur is an individual who establishes and

manages the business for the principal purpose of profit and growth.
4. Entrepreneur is an achievement motivator: “entrepreneurs are action-oriented, highly’

motivated individuals.” Therefore, entrepreneurs have to have a deep-rooted need for
achieving their goals.
5. Entrepreneur is a capital provider: Entrepreneur a person who operates a business by

investing his or her capital. They perceived entrepreneur as the founder of an enterprise who
assembles necessary resources for the operation of the enterprise.
6. Entrepreneur is the determinant of the nature of the business: Entrepreneur is the

person or group of persons who perform the task of determining the kind of business to the
operated.
Therefore, entrepreneurs promote diversified and distinct types of business in society.
7. Entrepreneur is an innovator: Entrepreneur as a person who takes a small venture to the

edge of success by his efforts, innovation and motivation. Innovation is an action that
introduces a product, a new quality, a new method of production, new market and new
organization.
8. Entrepreneur is a reward receiver: An entrepreneur is a person who creates something

new of value by devoting time and efforts and in tum receives monetary and personal
rewards.
9. Entrepreneur is a challenge taker:
It perceives entrepreneur as a person who accepts challenges for developing and exercising
vigilance about success and failure to take a risk and to generate products.
The above-mentioned characterizes of an entrepreneur show’ that an entrepreneur is a

dynamic person who promotes society and civilization by taking ventures that give an
enormous variety of goods and organizations to bring about changes in the arena of industrial
activity.

Examples of Entrepreneurs
Eddie hopes that his entrepreneurial gamble will pay off as well as the gambles of other well-
known entrepreneurs, such as:
1).Bill Gates, founder of Microsoft. There are probably not many people that have not been
touched by one of his products, such as Microsoft Windows, Microsoft Office and Internet
Explorer.
2).Steve Jobs, co-founder of Apple computers, which produces Macs, iPods and iPhones, as
well as Apple TV.
3). Mark Zuckerberg, the founder of Facebook.
4). Pierre Omidyar, founder of eBay.
TYPES OF ENTREPRENEURS:
Entrepreneurs may be classified in a number of ways.
ON THE BASIS OF TYPE OF BUSINESS.
Entrepreneurs are classified into different types. They are
Business Entrepreneur: He is an individual who discovers an idea to start a business and

then builds a business to give birth to his idea.
Trading Entrepreneur: He is an entrepreneur who undertakes trading activity i.e; buying

and selling manufactured goods.
Industrial Entrepreneur: He is an entrepreneur who undertakes manufacturing activities.
Corporate Entrepreneur: He is a person who demonstrates his innovative skill in

organizing and managing a corporate undertaking.
Agricultural Entrepreneur: They are entrepreneurs who undertake agricultural activities

such as raising and marketing of crops, fertilizers and other inputs of agriculture. They are
called agripreneurs.
ON THE BASIS OF USE OF TECHNOLOGY:
Entrepreneurs are of the following types.
Technical Entrepreneur: They are extremely task oriented. They are of craftsman type.
They develop new and improved quality goods because of their craftsmanship. They
concentrate more on production than on marketing.
Non-Technical Entrepreneur: These entrepreneurs are not concerned with the technical
aspects of the product. They develop marketing techniques and distribution strategies to
promote their business. Thus they concentrate more on marketing aspects.

Professional Entrepreneur: He is an entrepreneur who starts a business unit but does not
carry on the business for long period. He sells out the running business and starts another
venture.
ON THE BASIS OF MOTIVATION:
Entrepreneurs are of the following types:
Pure Entrepreneur: They believe in their own performance while undertaking business
activities. They undertake business ventures for their personal satisfaction, status and ego.
They are guided by the motive of profit. For example, Dhirubhai Ambani of Reliance Group.
Induced Entrepreneur: He is induced to take up an entrepreneurial activity with a view to

avail some benefits from the government. These benefits are in the form of assistance,
incentives,subsidies, concessions and infrastructures.
Motivated Entrepreneur: These entrepreneurs are motivated by the desire to make use of
their technical and professional expertise and skills. They are motivated by the desire for self-
fulfillment.
Spontaneous Entrepreneur: They are motivated by their desire for self-employment and to
achieve or prove their excellence in job performance. They are natural entrepreneurs.
ON THE BASIS OF STAGES OF DEVELOPMENT: They may be classified into;
First Generation Entrepreneur: He is one who starts an industrial unit by means of his
own innovative ideas and skills. He is essentially an innovator. He is also called new
entrepreneur.
Modern Entrepreneur: He is an entrepreneur who undertakes those ventures which suit

themodern marketing needs.
Classical Entrepreneur: He is one who develops a self-supporting venture for the

satisfaction of Customers’ needs. He is a stereo type or traditional entrepreneur.
CLASSIFICATION ON THE BASIS OF ENTREPRENEURIAL ACTIVITY: They

are Classified as follows:
Novice: A novice is someone who has started his/her first entrepreneurial venture.
Serial Entrepreneur: A serial entrepreneur is someone who is devoted to one venture at a

time but ultimately starts many. He repeatedly starts businesses and grows them to a
sustainable size and then sells them off.
Portfolio Entrepreneurs: A portfolio entrepreneur starts and runs a number of businesses at

the same time. It may be a strategy of spreading risk or it may be that the entrepreneur is
simultaneously excited by a variety of opportunities.

CLASSIFICATION BY CLARENCE DANHOF: Clarence Dan of, On the basis of
Americanagriculture, classified entrepreneurs in the following categories:
Innovative Entrepreneur: These are the ones who invent the new ideas, new products, new
production methods or processes, discover potential markets and reorganize the company’s
structure. These are the industry leaders and contribute significantly towards the economic
development of the country. The innovative entrepreneurs have an unusual foresight to
recognize the demand for goods and services. They are always ready to take a risk because
they enjoy the excitement of a challenge, and every challenge has some risk associated with
it. Ratan Tata is said to be an innovative entrepreneur, who launched the Tata Nano car at a
considerably low cost.
Imitating Entrepreneurs: The imitating entrepreneurs are those who immediately copy the
new inventions made by the innovative entrepreneurs. These do not make any innovations by
themselves; they just imitate the technology, processes, methods pioneered by others. These
entrepreneurs are found in the places where there is a lack of resources or industrial base due
to which no new innovations could be made. Thus, they are suitable for the underdeveloped
regions where they can imitate the combinations of inventions already well-established in the
developed regions, in order to bring a boom in their industry.
Fabian Entrepreneurs: These types of entrepreneurs are sceptical about the changes to be
made in the organization. They do not initiate any inventions but follow only after they are
satisfied with its success rate. They wait for some time before the innovation becomes well
tested by others and do not result in a huge loss due to its failure.

Drone Entrepreneurs: These entrepreneurs are reluctant to change since they are very
conservative and do not want to make any changes in the organization. They are happy with
their present mode of business and do not want to change even if they are suffering the losses.
Commercial Entrepreneurs: They are those entrepreneurs who start business enterprises for
their personal gain. They undertake business ventures for the purpose of generating sales and
profits. Most of the entrepreneurs belong to this category.
Social Entrepreneurs: They are those who identify, evaluate and exploit opportunities that
create social values and not personal wealth. Social values refer to the basic long standing
needs of society. They focus on the disadvantaged sections of the society. They play the role
of change agents in the society. In short, social entrepreneurs are those who start ventures not
for making profits but for providing social welfare.
DEFINITION OF ENTREPRENEURSHIP
In the words of Stevenson and others, “Entrepreneurship is the process of creating
value by bringing together a unique package of resources to exploit an opportunity.”
According to A.H. Cole, “Entrepreneurship is the purposeful activities of an individual or
a group of associated individuals undertaken to initiate, maintain or organize a profit
oriented business unit for the production or distribution of economic goods and services”.
All activities undertaken by an entrepreneur to bring a business unit into existence

are collectively known as entrepreneurship. It is the process of changing ideas into
commercial Opportunities and creating values. In short, entrepreneurship is the process of
creating a business enterprise.
NATURE AND CHARACTERISTICS OF ENTREPRENEURSHIP
Features of entrepreneurship are summarized as follows:
1) It is a function of innovation.
2) It is a function of leadership.
3) It is an organization building function.
4) It is a function of high achievement.
5) It involves creation and operation of an enterprise.
6) It is concerned with unique combinations of resources that make existing methods
orproducts obsolete.
7) It is concerned with employing, managing, and developing the factors of production.
8) It is a process of creating value for customers by exploiting untapped opportunities.
9) It is a strong and positive orientation towards growth in sales, income, assets,
andemployment.

ROLE OF ENTERPRENUERSHIP IN ECONOMIC DEVLOPMENT
1. Employment opportunities
Entrepreneurs employ labour for managing their business activities and provides employment
opportunities to a large number of people. They remove unemployment problem.
2. Balanced Regional Development

Government promotes decentralized development of industries as most of the incentives are
granted for establishing industries in backward and rural areas. Thus, the entrepreneurs to
avail the benefits establish industries in backward and rural areas.
They remove regional disparities and bring balanced regional development. They also help to
reduce the problems of congestion, slums, sanitation and pollution in cities by providing
employment and income to people living in rural areas. They help in improving the standard
of living of the people residing in suburban and rural areas.
3. Mobilization of Local Resources

Entrepreneurs help to mobilize and utilize local resources like small savings and talents of
relatives and friends, which might otherwise remain idle and unutilized. Thus they help in
effective utilization of resources.
4. Optimization of Capital
Entrepreneurs aim to get quick return on investment. They act as a stabilizing force by
providing high output capital ratio as well as high employment capital ratio.
5. Promotion of Exports
Entrepreneurs reduce the pressure on the country’s balance of payments by exporting their
goods they earn valuable foreign exchange through exports.
6. Consumer Demands
Entrepreneurs produce a wide range of products required by consumers. They meet the
demand of the consumers without creating a shortage for goods.
7. Social Advantage
Entrepreneurs help in the development of the society by providing employment to people and
paves for independent living they encourage democracy and self-governance. They are adept
in distributing national income in more efficient and equitable manner among the various
participants of the society.
8. Increase per capita income

Entrepreneurs help to increase the per capita income of the country in various ways and
facilitate development of backward areas and weaker sections of the society.
9. Capital formation
A country can attain economic development only when there is more amount of investment
and production. Entrepreneurs help in channelizing their savings and savings of the public to

productive resources by establishing enterprises. They promote capital formation by
channelizing the savings of public to productive resources.
10. Growth of capital market

Entrepreneurs raises money for running their business through shares and debentures.
Trading of shares and debentures by the public with the help of financial services sector leads
to capital market growth.
11. Growth of infrastructure

The infrastructure development of any country determines the economic development of a
country, Entrepreneurs by establishing their enterprises in rural and backward areas influence
the government to develop the infrastructure of those areas.
12. Development of Trader

Entrepreneurs play an important role in the promotion of domestic trade and foreign trade.
They avail assistance from various financial institutions in the form of cash credit, trade
credit, overdraft, short term loans, secured loans and unsecured loans and lead to the
development of the trade in the country.
13. Economic Integration

Entrepreneur reduces the concentration of power in a few hands by creating employment
opportunities and through equitable distribution of income. Entrepreneurs promote economic
integration in the country by adopting certain economic policies and laws framed by the
government. They help in removing the disparity between the rich and the poor by adopting
the rules and regulation framed by the government for the effective functioning of business in
the country.
14. Inflow of Foreign Capital

Entrepreneurs help to attract funds from individuals and institutions residing in foreign
countries for their businesses.
Ethics and Social Responsibility for an Entrepreneur

Social Responsibility means eliminating corrupt, irresponsible or unethical behaviour which
might harm to the community, its people and the environment.
 Public image: The activities of entrepreneur towards the welfare of the society earn
goodwill and reputation for the business. People prefer to buy products of a company
that engages itself in various social welfare programs. Again good public image also
attracts the honest and competent employees to work with such employers.
 Employee Satisfaction. Employees are the part of the society. If you satisfy your
needs, then you are doing social work.
 Ethical Leadership. It is the belief that what entrepreneur does has a strong influence
on employees. If manager cheats, Lies, steals or manipulates, then they are sending
wrong signals to employees.

 A social Entrepreneur is an individual or organization who seeks out opportunities
to improve society by using practical, innovative and substantial approaches. Since
last three decades, HDFC contributes 7% of its income to support community needs.
Mahindra Tech employees donated one day salary to help victims of Bihar floods.
Wipro has set up a foundation named Azim Premji Foundation to help improve
education of the elementary schools in rural India.
 Environment Management. Managers and Organizations can do many things to

protect and preserve the natural environment which includes plastic less business by
giving paper bag, creating eco-friendly product, by eliminating production.
 Consumer Awareness. Consumers have become very conscious about their rights. If
you are giving high quality products at cheap rate, that is kind of social
Responsibility.
Need of Ethics to An Entrepreneur The social dimensions of business ethics cannot be
overlooked because many problems arise from the relationship of business to the boarder
society. Ethical considerations are significant for managers due to the following reasons:
2) For every individual job is the Centre of life. Unless job values are in harmony with the
rest of life, he cannot be happy and healthy person.
3) Modern society is an industrial society. Therefore, business value becomes the value of
the society as a whole.
4) An entrepreneur must take into moral and social consideration because these are the
real motivating factors.
5) When an organization fails to behave in accordance with the social expectations, it may
lose not only its image and market share but it’s very right to exist.
6) The study of business ethics insulates high level of integrity to an entrepreneur.
7) Ethical knowledge will help the entrepreneur in setting highly responsible tone for the
organization in individual judgments and decisions whether ethical or not.
FINANCIAL INSTITUTIONAL SUPPORT TO ENTREPRENURS
The Industrial Development Bank of India (IDBI)
The industrial bank of India (IDBI) was established on 1st July, 1964 under the industrial
development bank of India act, as a wholly owned subsidiary of the reserve bank of India. In
terms of the public financial institutions laws (Amendment) Act, 1975, the ownership of the

lDBI has been transferred to the central government with effect from 16 the February 1976.
The most distinguishing feature of the IDBI is that it has been assigned the role of the
principal financial institution for co-ordinating, in conformity with national priorities, the
activities of the institutions engaged in financing, promotion or developing industry. The
IDBI has been assigned a special role to play in regard to industrial development.
Functions of IDBI:
The main function of the Industrial Development Bank of India, as its name itself suggest is
to finance Industrial enterprises in both private and public sector. Financial assistance is
provided either directly or through special financial institutions.
(a) Direct Assistance: IDBI assists Industrial unit directly by way project loan, underwriting
of and direct subscription to industries securities (Share & Debentures) soft loans, technical
development fund loans and equipment finance loan. IDBI provides direct assistance for
project costing more than Rs. 3 Crore under the Project finance scheme.
(b) Indirect Finance: IDBI Indirect assistance is provided basically to tiny, small and
medium enterprises mainly.
(i) By way of refinance of Industrial loan granted by SFCs, SIDCs, and commercial banks,
co-operative banks an RRB.
(ii) Rediscounting of bills arising out of safe of Indigenes machinery a deferred payment
basis.
(iii) Seed Capital assistance to new enterprise never generally through SFCs & SIDCs.
(c) Special Assistance: IDBI Act 1964, provide Development Assistance fund. This find to
be used by the IDBI to assist those Industrial concerns which are not able to secure funds in
the normal course either because of heavy investment or low rate of returns both.
(d) Direct Assistance to Industries: The IDBI has been empowered to finance industrial
concerns directly under the following structural arrangements:
(i) To grant financial accommodation up to a 16 year period for export of capital goods and
other commodities,
(ii) To grant loans or to subscribe to the shares and debentures of industrial concerns. Such
loans, advances, and debentures can be convened into equity shares at the option of the Bank,
(iii) To underwrite new issues of Industrial concerns and accept, discount or rediscount
bonafide commercial bills or promissory notes of industrial concerns,
(iv) To guarantee deferred payment due from industrial concerns for loan raised by them in
the market or from scheduled banks etc.

(e) Assistance to other financial institutions: IDBI has carried out the following refinancing
functions: IDBI can refinance term advances of 3 to 25 years maturity made to industrial
concerns by IFCI, SFCs and other financial institutions which may be notified by the
Government. It can similarly refinance term loans of 3 to 10 years maturity made by
scheduled banks and State Co-operative Banks. It can also refinance export credit of 15 years'
maturity where primary lending institutions grant loans to person in India and to parsons
outside India repayable within a period of 12 years.
(f) Creation of Development of Assistance funds: The Bank created a development
assistance fund in 1965 with an initial contribution from Central Government. This fund is
intended to provide assistance for industries which for various reasons like, heavy investment
involved or low anticipated return on capital, may not be able to obtain funds in the normal
course. The prior approval of the Central Government is necessary for any assistance from
the Fund.
(g) Soft loan scheme: The soft loan scheme came into existence in November 1976 for
financing the modernisation programme of five selected industries, namely, cotton, textiles,
jute, cement, sugar and specified engineering industries. The scheme aims at modernisation,
replacement and renovation of industry which has become necessary to achieve a more
economic level of production in order to enhance their competitiveness in domestic and
international markets.
(h) Technical Development Fund Scheme: Technical Development Fund Scheme was
introduced in March 1979 with the object of promoting fuller capacity utilization,
technologies up gradation, and export development. The fund can provide foreign exchange
for small value imports with the object of procuring technical know- how, foreign
consultancy service, drawings and designs.
(i) Automatic Refinancing Scheme: The main features of Automatic refinancing scheme are
as follows:
(a) Sanction and disbursement of refinance in respect of loans upto Rs. 5 lakhs from the
eligible institutions to small scale industries including those in the tiny sector which are
normally covered under the IDBI Credit Guarantee Scheme,
(b) The IDBI will not levy commitment charges on credit institutions in respect of refinances
under the ARS (c) Only one general agreement will be taken from the eligible institution
covering drawls of refinance under different schemes of the IDBI

(j) Rediscounting: IDBI has introduced a scheme for rediscounting of bills against the sale
of machinery to enable the indigenous machine manufacturing industry to purchase
equipment on deferred payment basis.
Small Industries Services Institutes (SISIs):
The SISIs were set up in state capitals and other industrial cities in the country. There are all
together 28 SISIs and 30 branch SISIs in India. Their performances are overseen by the office
of the DC (SSI).
The main functions of SISIs include:
- Technological development services and consultancy services
- Interface between Central and State Government.
- Entrepreneurship Development programme.
- Promotional programmes.
- Ancillary development.
- Promotion of export.
District Industries Centre (DICs):
In May 1978 DIC was initiated for the promotion of small scale and cottage industries
beyond big cities and state capitals to the district headquarters. It was started as a centrally
sponsored scheme with the aim of developing small, tiny and cottage industries in the
country.
The District Industries Centres (DIC) Programme was launched on 1st May, 1978, with a
view to providing an integrated administrative framework at the district level which would
look at the problem of the industrialisation in the district in a composite manner.
Main services of DICs are:
- Provide machinery and equipment
- Economic investigation of local resources
- Provide raw material
- Marketing
- Quality input
- Consultancy and extension services.
Functions of the District Industries Centres (DICs):
The main functions of the DICs are enumerated as follows:
 To survey existing traditional and new industries, raw materials, and human resources
to identify schemes and give a market forecast for different items and to prepare

sample techno economic feasibility reports and to offer investment advice to
entrepreneurs.
 To assess the requirements of machinery and equipment for various types of small
scale, tiny and village industries to assess sources of availability of machinery and
equipment for different machines to advise entrepreneurs, to liaise with Research
Institutions regarding research and development arrange machinery on hire-purchase
basis.
 To arrange for training courses for entrepreneurs of small and tiny units and liaise
with SlSIs, SIET, and other institutions. To keep abreast of research and development
in selected product lines and quality control methods.
 To ascertain raw material requirements of various units, their sources and prices and
to arrange bulk purchases of raw materials and their distribution to the entrepreneurs.
 To liaise with lead banks and other financial institutions, appraise applications,
monitor flow of industrial credit in the districts and to the entrepreneurs.
 To organise marketing outlets, to liaise with Government procurement agencies,
convey market intelligence to the entrepreneurs, organise market surveys, market
development programmes, etc.
National Institute for Entrepreneurship and Small Business Development (NIESBUD):
In 1983, the Ministry of Industry, Government of India established National Institute for
Entrepreneurship and Small Business Development (NIESBUD) for entrepreneurship
development especially in area of SSIs. NIESBUD was established as an apex body to co-
ordinate the activities of various institutes and agencies engaged in entrepreneurship
development to organise and conduct training programmes for them. The Institute is
registered as a society under Government of India Societies Act, XXI of 1860 and started
functioning from 6th July, 1983. It is also the secretariat of the National Entrepreneurship
Development Board the apex body which determines policy for entrepreneurship in the
country. The institute provides training to various target groups by evolving standardised
model syllabi for the respective groups. The programmes organised by the Institute are
government funded and its training activities are restricted to stimulating, supporting and
sustaining entrepreneurship, in areas where the demand for such programmes is high or
where there are no organisations conducting such programmes.
NIESBUD plays a supportive role in developing the efficiency of organisations which
are directly or indirectly engaged in promoting entrepreneurship. The main objectives of the
Institute are to accelerate the process of entrepreneurship development and to support and

help institutes/agencies involved in entrepreneurship development to improve their
efficiency. The other objectives are to evolve standard processes of selection, training,
support and sustenance to potential entrepreneurs, to provide vital information and to provide
functional forums, for interaction and exchange of experiences helpful for policy formulation
and modification at various levels. The policy direction and guidance to the institute is
provided by its governing council whose chairman and vice-chairman are the Union Industry
Minister and Union State Minister of Industry respectively.
OBJECTIVES OF NIESBUD
 To standardize and systemize the processes of selection, training, support and
sustenance of potential and existing entrepreneurs.
 To support and motivate institutions/organizations in carrying out training and other
entrepreneurship development related activities.
 To serve as an apex national level resource institute for accelerating as well as
enhancing the process of entrepreneurship development, to measure the impact of the
same within different strata of the society.
 To provide vital information and support to trainers, promoters and entrepreneurs by
organizing research and documentation activities relevant to entrepreneurship and
skill development.
 To create a holistic environment to train the trainers, promoters and consultants in
diverse areas of entrepreneurship and skill Development.
 To offer consultancy nationally/internationally for promotion of entrepreneurship and
small business development at national and international level.
 To provide national/international forums for interaction and exchange of ideas for
policy formulation and its refinement at various levels.
 To share experience and expertise in entrepreneurship development across national
frontiers to create awareness on it at national level.
 To interchange international experience and expertise in the field of entrepreneurship
development for mapping its development at international levels too.
COMMERCIAL BANKS
Commercial banks are profit-based institutions that offer financial products like loans, as
well as services like deposit, electronic transfer of funds, etc. to their customers.
Commercial banks have a significant role in a country’s economy as these
organisations fulfil the short and mid-term financial requirements of industries.

Functions of commercial banks are primarily based on a business model of accepting
public deposits and utilizing that fund for various investment purposes. Such
functions can be classified into two categories, primary and secondary functions.
What are the Functions of Commercial Bank
Following is a brief overview of both primary and secondary functions undertaken by a
commercial bank –
Primary Functions
1. Accepting Deposits – Commercial banks accept deposits from their customers in the
form of saving, fixed, and current deposits.
• Savings Deposits – Savings deposits allow a customer to credit funds towards their
accounts for up to a certain limit. These deposits are preferred by individuals with a
fixed income, utilized to create savings over time.
• Fixed Deposits – Fixed deposits come with a predetermined lock-in period. Fixed
deposits are also referred to as time deposits as the funds are deposited for a specific
time frame.
• Current Deposits – Current deposits allow account holders to deposit and withdraw
money whenever necessary. In some cases, current accounts also offer overdrafts until
a pre-specified limit to individuals and businesses.
2. Providing Loans – One of the main functions of commercial banks is providing credit
to organisations and individuals, and profit from the earned interest. Usually, banks
retain a small reserve for their expenses while offering the remaining amount to
customers as various types of short and long-term credits.
Commercial banks provide both secured and unsecured loans, categories are-
• Cash Credit – Commercial Banks and its Functions include extending advances to
individuals and organisations against bonds, inventories, and other types of securities.
This facility, commonly known as cash credit, provides a more substantial sum when
compared to other forms of credits.
• Short-Term Credits – Short-term loans are usually pledged without any security,
offering a smaller loan amount and repayment tenor. These are also referred to as
personal loans.
3. Credit Creation – A unique function of commercial banks is credit creation. Instead of
offering liquid cash, banks create a line of credit and transfer the loan to a business or
commercial body all at once.

Secondary Functions
The following can be considered as the secondary functions of commercial banks –
1. Providing locker Facilities – Commercial banks provide locker facilities to customers
who want to store valuables safely. Locker facilities eliminate the impending risk of
theft or loss, which prevail when kept at home.
2. Dealing in Foreign Exchange – Commercial banks help provide foreign exchange to
individuals and organisations which export or import goods from overseas. However,
only certain banks which have the license to deal in foreign exchange are eligible for
such transactions.
3. Exchange of Securities – Another function of commercial banks is to trade in bonds
and securities. Customers can purchase or sell the units from the financial institution
itself, which offers more convenience than alternate approaches.
4. Discounting Bills of Exchange – The main function of a commercial bank in today’s
date is to discount bills of businesses. Bill discounting is considered as a profitable
investment for banks. Bills create a steady flow of funds, while not becoming a risky
venture during payment as it is considered as a negotiable instrument. These also do
not involve the financial institution in any litigation.
5. Bank as an Agent – Commercial Bank and its Function also requires them to provide
finance-related services to customers, fulfilling the role of an agent. These services
usually include –
• Acting as an administrator, trustee, or executor of a customer-owned estate.
• Assisting customers with tax returns, tax refunds, and other similar tasks.
• Serving as a platform to pay premiums, repay loan installments, etc.
• Offering a platform for electronic transaction of funds, processing of cheques, drafts,
bills, etc.

UNIT-II
CREATIVITY & INNOVATION IN ENTREPRENEURSHIP

Creativity
Creativity is thinking new things, the ability to develop new ideas and to discover new ways
of looking at problems and opportunities.
Innovation
Innovation is doing new things, the ability to apply creative solutions to those problems and
opportunities in order to enhance people’s lives or to enrich society
According to Drevdahl, ''Creativity is the capacity of a person to produce composition,
products or ideas which are essentially new or novel and previously unknown to the
producer''
Nature of Creativity
1. Creativity is the capacity to accept challenges.
2. Creativity is the freedom to exercise choice
3. Creativity is the readiness to change self and the environment
4. Creativity knew no special medium, place person, or time.
5. Creativity is a process as well as a product
6. Creativity is a complex, dynamic and serious process.
7. Creativity is the result of some interaction
8. Creativity is the ability to synthesize ideas or objects.
9. Creativity is the ability to create new ideas theories or objects.
10. Creativity is the ability to develop something original
11. Creativity has several dimensions.
CHARACTERISTICS OF CREATIVITY
Flexibility: This is a key characteristic because it involves a mind-set that suggests that there
may be more than a single answer or solution to any particular issue or problem. Flexible
thinkers are not hemmed in by being overly-focused on one way of doing things and tend to be
open to innovation. They also have the capacity to understand when something is not working
and then to change to an alternative solution/approach.

A sense of intense curiosity: Creative thinkers are fascinated with the world around them.
They ask lots of questions, and tend to develop a very intense focus that takes them into
almost a reverie as they try to discover how something works, or the detail of a beautiful
structure, or anything else they set their mind on.
Positive attitude: A positive attitude is essential for thinking creatively as it is this positivity
that spurs the mind on to seek detail, wonder, and, indeed, solutions. This is linked strongly to
my previous point about intense curiosity. A person who thinks negatively tends to block out
possibilities, and not look at the world around them with such detailed wonder.
Strong motivation and determination: This is where the hard work of the creative comes in.
So, we can all have creative thoughts — but what use is creativity if it doesn’t actually show
itself to the world in an act of construction or creation? From creating software solutions for
major problems, through to creating social capital through community building, or painting a
work of art, creativity requires the follow-through that can only come from strong motivation
and determination. Without this, creative ideas will only reside within the mind of the
individual without having the opportunity to influence society and/or the community.
Fearlessness: This is an interesting characteristic because highly creative people tend to

believe in the VALUE of the ideas they come up with. Remember, they are also flexible, so
they are willing to change; however, they do not seem to be worried about whether their idea
is right or wrong because they believe that their idea brings value to the field in which it
resides, even if it may later be debunked.
PROCESS OF CREATIVITY
1) Preparation
The key to this step is to fully immerse oneself in the material. This step usually involves a
creative brief and includes things like researching a brand, the target audience, or gathering
inspirations from other sources. If you’re a writer, you’re reading other works in the same
area. If you’re a musician, you’re listening to other pieces of music that inspires you. The
same applies for the creative class of graphic designers and digital artists.
2) Incubation
This step is where the “magic” happens for most creatives. After we absorb all the
information from the Preparation phase, the next step is to let the ideas marinate in our
subconscious. This is when you step away from the problem and do something else; that
could be grabbing lunch, going for a run, watching TV, taking a shower, doing laundry, or
getting a good night’s rest. For me, some of my best ideas come during nighttime drives
through Dallas, admiring the lights of the city skyline.
3) Illumination
This is the light bulb moment - the “Aha!” moment, The “Eureka!” - The moment when the
perfect idea hits you like a bolt of lightning. As a mentor of mine once said, the best ideas
come when two unrelated ideas bounce around in your brain for a while and collide together
to create something amazing. When this moment hits, a person might rush to their sketchbook
or keyboard to jot it down before it escapes them.
4) Evaluation

This is the hard part, where you look at all the ideas before you and narrow it down to which
ones work and which ones don’t. This is usually the phase when client feedback comes into
the mix and you, your team and the client weigh different options and decide what works for
the problem at hand.
5) Implementation
You’ve done the work, you’ve narrowed it down, you’ve decided on a direction, now go!
This is the part where the final product gets produced, where things like skill, experience,
knowledge, and hours of work come in to play. This is the writer’s final draft, the artist’s
finished piece, the musician’s live performance. The satisfaction of a job well done after this
stage makes all the hours of hard work worth it.
People in creative industries spend thousands of hours repeating and perfecting this process
to figure out what works for them, but that doesn’t mean only designers and writers can use
it. I encourage you to use these 5 steps in your work to help make work that’s more creative,
more revolutionary and will be sure to impress your clients and yourself.
FACTORS AFFECTING ON CREATIVITY
Creativity is something which cannot be taught as well as not something you are born with
either. But it certainly is the most important part of any brilliant innovators success.
Experiences: Experiences are a key player in creative thinking, the more you experience more
influenced you get. These experiences define your ideas and creativity which are presented
through your work.
Fearlessness: Fearlessness is a major factor having impact on one’s creativity. A person who
thinks that he is not creative can never be. Having doubts is ok, but being worried about the
success of an idea clearly shows that you lack faith in your ideology. Experts say ‘Be fearless
with your creativity and you’ll open more doors for new ideas.
Desire: Desire is factor of creativity which is overlooked but it is as vital as any other criterion
for growing as a creative individual. Science bluntly states that, if you simply don’t want to
change things (or solve problems or inspire others or do new things) then you won’t.
Atmosphere & Environment: Yes! It all about the world around us. Atmosphere and
Environment both go hand in hand to influence an individual’s creativity levels.
‘Environmental factors affecting creativity and innovation’ say’s: Although innovation and
creativity can emerge in a variety of settings and situations, some environments are more
conducive to the creative process. In one large study, it was found that having a vision, being
strong oriented, and engaging in external communication had a strong relationship to
creativity and innovation.
Space & Time: Productivity may increase under pressure but creativity has no positive
influence if the undisturbed space and right amount of time is not provided. John Cleese’s talk

on creativity states: that having a start and end time to keep your creative space open is
essential. Without a dedicated time block, it is easy to leave a creative mind-set to focus on
trivial matters that are easier to deal with than to take the time to do things that are important.
It also take time to get into your creative mode.
INNOVATION
The word “innovation” is derived from the Latin verb innovare, which means to renew. In
essence, the word has retained its meaning up until today. Innovation means to improve or to
replace something, for example, a process, a product, or a service. In the context of
companies, however, the term needs a definition. In the complex context of business, a
definition is needed.
Innovation is a process by which a domain, a product, or a service is renewed and brought up

to date by applying new processes, introducing new techniques, or establishing successful
ideas to create new value.
Innovation, by definition, is the introduction of something new. Without innovation, there

isn’t anything new, and without anything new, there will be no progress. If an organization
isn’t making any progress, it simply cannot stay relevant in the competitive market.
Because organizations are often working with other individual organizations, it can
sometimes be challenging to understand the impacts of innovation on our society at large.
There is, however, a lot more to innovation than just firms looking to achieve competitive
advantage.
IMPORTANCE OF INNOVATION
MACRO
Economic growth
Technological innovation is considered as a major source of economic growth. Economic

growth refers to the increase in the inflation-adjusted market value of the goods and services
produced by an economy over time. It is conventionally measured as the percent rate of
increase in real gross domestic product, or real GDP.
Innovation and the future of jobs

Technological advancement and increased productivity means major changes for careers
today as well. The world economy could more than double in size by 2050 due to continued
technology-driven product improvements.
According to the new World Economic Forum report, nearly 133 million new jobs may be
created by 2022 while 75 million jobs are displaced by AI, automation and robotics.
Increased well-being
In general, innovation and economic growth increases well-being because living standards
rise. According to the Brookings Institution, average life satisfaction is higher in countries
with greater GDP per capita. Another research also shows that there’s a link between
innovation and subjective wellbeing.
However, not all of the benefits of innovation and growth are evenly distributed. Often, a rise
in real GDP means greater income and wealth inequality. Although there isn’t a threshold
level for how much inequality is too much, greater socioeconomic gaps are most likely have
some negative consequences.
Reduced sickness, poverty and hunger
As already mentioned, developing countries depend on innovation as new digital

technologies and innovative solutions create huge opportunities to fight sickness, poverty and
hunger in the poorest regions of the world.
Developed countries also rely on innovation to be able to solve their own problems related to
these themes.
What comes to reducing hunger, for example, agricultural productivity is critical in the
developing countries where the next population boom is most likely to take place.
Smallholder farms in developing counties play an important role as up to 80% of the food is
produced in these communities.
Communication and educational accessibility
You probably already knew that The World Wide Web celebrates its 30th birthday this year.
We’ve already seen a huge technological revolution during the past decades and continue to
do so in the future.

According to the World Bank Annual Report 2016, even among the poorest 20 percent of the
population, 7 out of 10 households have a mobile phone. This means that more people now
have mobile phones than sanitation or clean water.
Environmental sustainability
Sustainability and environmental issues, such as climate change, are challenges that require a
lot of work and innovative solutions now and in the future.
Earth suffers as consumerism spreads and puts consumption at the heart of modern economy.
Although consumerism has a positive impact on innovation as a source of economic growth,
the rising consumption of innovative products is often considered as one of the reasons for
environmental deterioration.
MICRO PERSPECTIVE: THE IMPORTANCE OF INNOVATION FOR AN

ORGANIZATION
Competitive advantage
Competitive advantage means the necessary advancements in capabilities that provide an

edge in comparison to competitors of the industry. What these are exactly, depends on your
business model and the industry you operate in.
As already mentioned, for organizations the ability to get ahead of the competition is one of
the most significant reasons to innovate. Successful, innovative businesses are able to keep
their operations, services and products relevant to their customers’ needs and changing
market conditions.
Maximize ROI
Increased competitive advantage and continuous innovation often has a direct impact on
performance and profitability.
According to Global Innovation 1000, there’s a clear difference in both revenue (11%) and
EBITDA (22%) growth in favor of the more innovative organizations. These numbers show
that innovative companies not only grow faster but are more profitable than the rest.
Increased productivity
Economic growth is driven by innovation and technological improvements, which reduce the
costs of production and enable higher output. If we look at this from the perspective of an
organization, different automation solutions decrease manual, repetitive work and release
time for more important, value-creating tasks.
Positive impact on company culture
Last but not least, innovation also has a positive impact on company culture as it increases
the ability to acquire, create and make the best use of competencies, skills and knowledge.

Innovation practices can help build a culture of continuous learning, growth and personal
development. This type of innovative environment can again motivate people to constantly
improve the way they and their team work.
PROCESS OF INNOVATION
1. Creative Development – Qualities of innovative nature are essential for new businesses
today. You can achieve growth by learning how to be creative. You need to learn this business
skill to help make things of value from your creativeness. When you have this business skill
you will find that it opens up all kinds of opportunities and gives you the potential for a new
market and helps you to keep up with the current trends.
2. Continuous Improvement – Innovation gives organizational sustainability when you are

making continual improvements and repackaging and re-branding. Any good manager will
recognize the need to innovate and grows the business skills to increase their creativity.
3 .Reinforce Your Brand – Development branding is popular in organizational leadership.

This process reveals information to help leaders to learn other ways to be more innovative. It
is important because it is recognized as one of the main drivers for success. It gives
organizational sustainability such as brand maintenance.
4. Making the Most of What You Have Already – It is not all about creating a new product
or service which you can sell, but you also need to focus on your existing business procedures
to improve your efficiency, find some new customers, increase your profits and cut down on
the amount of your waste. When you are continually innovating and improving on the
practices of your business you will likely also attract better staff and keep more of your
existing staff. This is detrimental to the health and performance of your business in the long-
term.
5. Responding to Competition and Trends – Innovation can help you to see what exists now
in opportunities or which ones will likely pop up in the near future. Businesses which are
successful don’t only respond to the current needs of their customers, but usually predict the
future trends and come up with an idea, service or product that can meet the future demand
quickly and effectively. In this way you can stay ahead of your competition as trends,
technology or markets shift.
6. Having a Unique Selling Point – Generally, consumers will see innovation as something
which adds value to products or a company. When this is used the right way, it can give you
an advantage commercially, especially in a market that is saturated or shifting rapidly. It can
get your more positive exposure in the media and your customers will be more willing to pay
the extra money for something that is well-designed and new, rather than picking the less
exciting and cheaper rival.
7. The Use of Social Media – Including the use of social media in your innovation campaign
is great for managing, motivating and getting focused in your business. When you use it in

your business, you are drawing ideas from a wide range of people on the social networks,
giving you a successful outlet to find new ideas for your business. You can also use social
networks to see what customers are saying about your services, products or company. In
business today, we need to be innovators now more than ever. Each business and organization
is feeling the impact of globalization, technological and knowledge revolutions, migration and
climate change issues. Innovation can bring the added value you need to your business plus
widen your employment base. It is detrimental for the quality and growth of your business.
KEY DIFFERENCES BETWEEN CREATIVITY AND INNOVATION
 While creativity is about being imaginative, innovation is about being productive.
 Innovation is quantifiable in most cases; but creativity is not quantifiable.
 Creativity is all about thinking something new whereas innovation is more about
introducing something new.
 Money consumption is not involved in creativity but innovation involves money

consumption.
 There is no risk involved creativity but innovation is always associated with a

considerable risk.
 Creativity is associated with terms like ideas, imagination, thoughts, and expression,
concepts, brainstorming and creative process. Innovation is associated with terms like
process, value, invention, doing, action, implementation, enable, useful, change, new
and measurable.
 In a business organization, creativity comes up with new plans so that they can give a
competition and be more flexible in the market. On the other hand, innovation is about
taking up these novel ideas and developing on it to create useful and practical
solutions. In simple words, innovation is converting theory into action.

UNIT-III
ENTREPRENEURSHIP DEVELOPMENT PROGRAMME
Entrepreneurship Development Programme (EDP) is a programme which helps in developing

entrepreneurial abilities. The skills that are required to run a business successfully is
developed among the students through this programme. Sometimes, students may have skills
but it requires polishing and incubation. This programme is perfect for them. This programme
consists of a structured training process to develop an individual as an entrepreneur. It helps
the person to acquire skills and necessary capabilities to play the role of an entrepreneur
effectively.
EDP is an effort of converting a person to an entrepreneur by passing him through

thoroughly structured training. An entrepreneur is required to respond appropriately to the
market and he/she is also required to understand the business needs. The skills needed are
varied and they need to be taken care in the best possible way. EDP is not just a training
programme but it is a complete process to make the possible transformation of an individual
into an entrepreneur. This programme also guides the individuals on how to start the business
and effective ways to sustain it successfully.
Entrepreneurial Development Programme (EDP) refers to a programme which is formulated

to assist the individuals in reinforcing their entrepreneurial motives and attaining
competencies and skills which is essential for performing an entrepreneurial role
successfully.
According to N. P. Singh: "Entrepreneurship Development Programme is designed to help

an individual in strengthening his entrepreneurial motive and in acquiring skills and
capabilities necessary for playing his entrepreneurial role effectively. is necessary to promote
this understanding of motives and their impact on entrepreneurial values and behaviour for
this purpose”.
Process of Designing a Training Program
The process of designing a training program is not an easy task. Many problems occur in the
process of designing a training program. Some of the common problems are; creating training
that does not support a business goal, problems that training cannot fix, how to identify the
purpose of a training program, and sometimes all of these things.
So, how to create an effective training program for the employees? Below are the five steps
that will help you to create a more effective training program:
Step 1: Perform a Training Needs Assessment
The assessment of a training program has four-step to be followed:
• Identifying the business goal that can be supported by a training program.
Y.SURESH,MBA,M.Com (M.PHIL)
• Determining the tasks that workers should perform to make the company reach its
goals.
• Conducting the training activities that will help in enhancing the learning of the
workers to perform the tasks more effectively.
• Determining the learning characteristics of the workers that will make the training
effective.
Step 2: Develop Learning Objectives
A learning objective address things that your employees can get to know like:
• What is the product flow?

• How to maintain the product flow cycle?
• Importance of good product lifecycle.
Step 3: Design Training Materials
While designing your materials, keep the following points in mind:
• Focus on the learning needs of your employees.

• Create training assessments that can directly relate to the learning objectives.
• Remember the adult learning philosophies.
• Include more hands-on practice or simulation as possible.
• Put the employees in control of the learning process.
• Do possible thing to let the employees talk and interact with the trainer and with each
other while attending the training.
• Make sure there is plenty of opportunity for opinions.
• Break your training materials into small pieces that are easier to understand.
• Use “blended learning” approach that includes training in various types.
• Appeal to your workers’ senses during the training.
Step 4: Implement the Training
Implementation can take different forms by moving forward to the training. It can be
classroom instructions, the completion of e-learning modules, or more.
Step 5: Evaluate the Training
This method involves evaluating the training at four levels. Those four levels of evaluation
are:
• Employees’ reaction to training.

• Employees’ learning through the training.
• Employee’s job behaviour post-training.
• Beneficial business results.
NEED/IMPORTANCE OF ENTREPRENEURIAL DEVELOPMENT PROGRAMME
1) Formation of Employment Opportunities: Entrepreneurial development programmes

generate employment opportunities in the developing and under-developed countries. It
assists and encourages individuals to establish their own business and enable them to become
self-employed. By setting-up. Several business enterprises, EDP also creates abundant job
opportunities for other people.
2) Provides Adequate Capital: A large amount of capital is required to set-up a business

enterprise. This financial assistance is provided by various EDP agencies. EDPs instruct the
development banks such as ICICI, IDBI, IFCI, SIDCs, etc., to take initiative in promoting
entrepreneurship.
3) Proper Utilization of Local Resources: New entrepreneurs utilize the available local
resources in the most effective way. This utilization of resources plays an important role in
the development of a particular area or region at minimum cost. EDPs .guide, educate and
teach the entrepreneurs to exploit the local resources efficiently.
4) Increased Per Capital Income: Entrepreneurs have the ability to organise the factors of
production and utilize them in the most productive manner by establishing an enterprise. This
development leads to increased production, employment and wealth generation. As a result,
overall productivity and per capital income of the economy is raised.
5) Improved Standard of Living: EDPs provide latest technologies and innovative methods
to entrepreneurs which helps them to produce large quantity of products at lower cost. This
also enables entrepreneurs to exploit the available resources and produce quality products.
This automatically leads to improved standard of living.
6) Economic Independence: EDPs strengthen the entrepreneurs to produce variety of

products in large quantities at competitive prices. It also helps an entrepreneur to develop
substitutes of imported products which prevents the country from being dependent on other
foreign countries. It also saves foreign exchange of the country.
7) Preventing Industrial Slums: Most of the developed industrial areas are facing problems
related to industrial slums. This leads to over burdening of public amenities and also affects
the health of people adversely. EDPs offers several subsidies, incentives, infrastructural
support and financial grants to new entrepreneurs for establishing their businesses, thus,
preventing the growth of industrial slums.
8) Reducing Social Tension: A majority of youngsters and educated individuals of the

society are in the state of social unrest and tension. This social tension restricts them from
finding the right direction in their careers. Most of the students feel frustrated about not
getting a job after the completion of education. In such situations, EDPs helps people by
providing them proper guidance, assistance, training and support for establishing new
enterprises and businesses, as a consequence, social tension is reduced as they generate self-
employment opportunities.
9) Facilitating Overall. Development: EDPs facilitate entrepreneurship which helps in the

overall development of the society by producing new products, innovative services, low cost
consumer goods, job opportunities, increasing the standard of living, and overall productivity.
This facilitates in the overall development of the economy and the country.
OBJECTIVES OF EDP
The objective of this programme is to motivate an individual to choose the entrepreneurship

as a career and to prepare the person to exploit the market opportunities for own business
successfully. These objectives can be set both in the short-term and long-term basis.
Short-term objectives: These objectives can be achieved immediately. In the short-term, the
individuals are trained to be an entrepreneur and made competent enough to scan the existing
market situation and environment. The person, who would be the future entrepreneur, should
first set the goal as an entrepreneur. The information related to the existing rules and
regulations is essential at this stage.
Long-term objectives: The ultimate objective is that the trained individuals successfully
establish their own business and they should be equipped with all the required skills to run
their business smoothly.
The overall objectives of EDP are mainly to help in the rapid growth of the economy by
supplying skilled entrepreneurs. This programme primarily aims at providing self-
employment to the young generation.
OBJECTIVES OF ENTREPRENEURIAL DEVELOPMENT PROGRAMME (EDP)
 To make people learn compliance with law.

 To develop and fortify entrepreneurial quality, i.e., motivation or need for
achievement.
 To develop small and medium scale enterprises in order to generate employment and
widen the scope of industrial ownership.
 To industrialize rural and backward sections of the society.
 To understand the merits and demerits of becoming an entrepreneur.
 To investigate the environmental set-up relating to small industries and small
businesses.
 To design project for manufacturing a product.
 To increase the supply of entrepreneurs for quick industrial development.
 To prepare individuals to accept the uncertainty involved in running a business.
 To develop managerial skills among small entrepreneurs for improving the
performance of small-scale industries.
 To offer profitable employment opportunities to educated young men and women.
 To expand the sources of entrepreneurship.
PHASES OF ENTREPRENEURIAL DEVELOPMENT PROGRAMME (EDP)
1) Pre-Training Phase:
This step can be considered as the introductory phase in which the entrepreneurship
development programmes are launched. Wide spectrums of activities are performed in this
phase arc described below:
i) Identification of suitable location where the operations can be initiated like a district.
ii) Selection of an individual as a course coordinator or project leader to coordinate the EDP
activities.
iii) Organisation of basic infrastructural facilities related to the programme.
iv) Conducting the environmental scanning or industrial survey in order to look for better
business opportunities.
v) Developing various plans associated with the programme, like:
a) Promotional activities by using electronic or print media, posters, leaflets, etc.
b) Contacting business experts, different agencies, NGOs that can become a part of the
programme, directly or indirectly.
c) Printing the application forms and availing them in different locations with the
instructions.
d) Establishing selection committee for screening of candidates.
e) Preparing budget and getting it approved from the management and arranging other
activities which are related to the programme.
f) Arranging and deciding the need-based elements in the syllabus of training programme and
to contact guest faculties for the training session.
vi) Looking for the assistance of various agencies such as DICs, banks, SISI, NSIC, DM and
so on.
vii) Conducting industrial motivational campaigns to increase the number of applications.
2) Training Phase:
The main function of any EDP is to impart training to future entrepreneurs and guiding them
for establishing the enterprise. The normal duration of the entrepreneurship development
programme is 4-6 weeks and it is usually a full time course. The objectives, training inputs
and the centre of focus are explained in the programme design.
Commonly, it is considered that the trainees do not have enough information about the
change because of which new programme is prepared. Each trainee should appraise himself
at the termination of the training programme to have a clear view about his/her future
endeavours.
Training Phase - Programme Design

Objectives Focus Inputs
Promoting and sustaining
the skills of Entrepreneur. Behavioral inputs.
entrepreneurship and
building up the confidence.
Business opportunity guidance,
information and project planning
inputs, technical inputs. Guiding
Enterprise establishment for enabling business
Helping in establishing the Creating enterprise. opportunities. information and
new enterprise through project planning and
decision-making. technical opinions.
Successful and profitable Enterprise Management inputs, plant
operation of enterprise. management, first-hand visit/in-plant training
Industrial exposure knowledge of factory Management suggestions
Performing profitable and layout, business sites, etc. industrial visit or training.
successful Information related to
operations, exposure factory layout, plant
various industrial location, organisation
knowledge. management and so on.
3) Post-Training Phase :
This phase is also referred as the phase of follow-up assistance. In this phase, the candidates
who have completed their programme successfully are provided post-training assistance. This
phase is very important as after the completion of training programme, most of the
entrepreneurs face a lot of hardship in the business plan implementation. Thus, with the help
of various counselling sessions, the training organisations try to extend their support to
trainees. Members like State Financial Corporation, commercial banks, training institutions
and District Industries Centre constituted all together to assist the entrepreneurs on the basis
of mentioned goals :
 To assist trainees in a meaningful manner so that trainees can realize their business
plan.
 To analyse the development made by trainees in the project implementation.
 To evaluate the post-training approach.
 To provide escort services to the trainees with the help of various promotional and
financial institutions.
Commonly, these follow-up action meetings are conducted after every three years of training
completion and the tools used for the follow-up are :
 Postal questionnaires.
 Telephonic follow-up.
 Individual contact by the trainer.
 Team meetings.
A number of government and private institutions are providing assistance in India to

entrepreneurs. Some of them are listed below:
 Small Industries Development Organisation (SIDO),

 Commercial Banks,
 National Alliance of Young Entrepreneurs (NAYE),
 National Institute for Entrepreneurship and small Business Development (NIESBUD),
 Entrepreneurship Development Institute of India (EDI),
 India Investment Centre (LIC),
 Small-scale industrial Development Bank Of India (SIDBI), and
 Technical Consultancy Organisation (TCO).
UNIT –IV
PROJECT PLANNING AND FEASIBILITY STUDIES
A Project is a group of unique, interrelated activities that are planned and executed in a
certain sequence to create a unique product and/ or service, within a specific time frame,
budget and the client’s specifications.
According to the Project Management Institute’s (PMI) Publication, “A Guide to the

Project Management Body of Knowledge’ (PMBOK), a project is defined as, “a temporary
endeavour undertaken to create a unique product or service.”
According to F. L. Harrison, “A project can be defined as a non- repetitive, one- off

undertaking, normally with discrete time, financial and technical performance goals.”
According to the British Standard , a project is define as, “ a unique set of co-ordinated
activities, with definite starting and finishing points, undertaken by an individual or
organization to meet specific objectives.
Broadly these objectives, which are usually defined as part of the business case and set out in
the project brief, must meet three fundamental criteria:
1. The project must be completed on time;
2. The project must be accomplished within the budgeted cost;
3. The project must meet the prescribed quality requirement.
CHARACTERISTICS OF PROJECT
Focus: A project has a fixed set of objectives/mission/goal. Once these objectives, goals, or
missions’ targets have been achieved, the project will become extinct from the organizational
pyramid.
Life Span: A project cannot continue indefinitely. It is either executed, terminated, or dead.
Every project is invariably time bound. The time limits are well defined through schedules.
Team Spirit: Every project encourages team spirit among the group of people who
participate in it and are instrumental in achieving its goal. This team consists of different
individuals from varied disciplines who give their knowledge, experience, and credence
towards a total performance.
Lifecycle: Like any other product, a project is also reflected and influenced by the lifecycle
phases and to which the success or failure of the project can be ascribed. Unswervingly, from
conception to commission, a project has to run through six phases that are intertwined with
various stages.
Y.SURESH, MBA, M.Com (M.Phil)

Unique Activities: Every project has a set of activities that are unique, which means it is the
first time that an organization handles that type of activity. These activities do not repeat in
the project under similar circumstances, i.e., there will be something different in every
activity or even if the activity is repeated, the variables influencing it change every time. For
example, consider a ship building yard that builds ships for international clients. Even though
the organization builds many ships, each time there will be a difference in some variable such
as the vessel’s design, time allowed for construction, etc.
Attainment of Specific Goal: Organizations take up projects to perform a particular task or

attain a specific goal. These tasks differ from project. The projects in an organization could
be constructing a new facility, computerizing the accounts department or studying the
demand for a new product that the organization plans to launch in the market. All these
projects have a specific goal or result to attain and hence it can be said that every project is
goal-oriented.
Sequence of Activities: A project consists of various activities that are to be performed in a

particular sequence to deliver the end-product. This sequence depends on the technical
requirements and interdependency of each of the activities.
Specified Time: very project has a specified start date and completion date. This time limit is
either self- imposed or it is specified by the client. The life span of a project and run from a
few hours to a few years. A project coms to a close when it delivers the product and/ or
service as per the client’s requirements or when it is confirmed that it is no longer possible
for the project to deliver the final product and/or service as required by the client.
Interrelated Activities: Projects consists of various technically interrelated activities. These

activities are considered interrelated as the deliverable (Output) of one activity becomes the
input for another activity of the project. For example, the project of building a multi- storied
luxury hotel. This project consists of various activities such as making a building plan,
landscaping, constructing the building, designing the interiors, furnishing the rooms, etc. All
these activities are interrelated and are equally important for the completion of the project.
Transience creates Urgency: To be worthwhile and to repay the investment, the

development objectives must be achieved by a certain time. Sometimes those time constraints
are very tight, there is a very narrow market window for the output from the project. If the
market window is missed, the project has no value. However, more often, the market window
is broader and though the project will be worth less if it is late, the loss in value from later
delivery has to be balanced against a potential greater value if more time is spent developing
the project’s output. Unfortunately, the timescale often receives undue emphasis. There are
time pressure in routine operations. However, because they are routine, it is known how
much can be done in a given time, and so there is less likelihood of committing to impossibly
tight timescales.

Uniqueness Create risk and Uncertainty: The project must have a plan. As the work is
unique, it will only be done once; the planning effort will only be received once. It is
essential to coordinate the input of resources and ensure that the product is delivered at such a
time and cost as to make a profit. However, the plan needs to be more strategic, focusing on
the coordination and integration. The detail levels of the plan need to be almost flexibly
defined as the project progresses. And necessarily, the uncertainty and the risk must be
overtly managed as part of the complete project management process.
Subcontracting: This is not a frill in the life of a project. Subcontracting is a subset of every
project and without which no project can be completed unless it is of proprietary from or tiny
in nature. Subcontracting is an inescapable fact of projects and is one of the healthy antidotes
for fruitful completion of the project, if dosage appropriately, well in time. For example,
DDA, HUDA< etc., undertake to construct housing colonies for the general public.
PROJECT IDENTIFICATION
Generally; Project Identification is a process of generating a few ideas about the possible
projects. The project ideas can be discovered from various internal and external sources. It is
apprehensive with the collection, compilation and analysis of economic data for the eventual
purpose of locating probable opportunities for investment. Actually, Project identification
means identifying some possible projects having a good market.
Steps in Project Identification – For identifying the feasible projects, the prospective
entrepreneur has to go through the following steps.
Conceiving project ideas – This is the first vital stage in project identification. Profit making
is the chief drive behind every business or enterprise.
Choosing the right line of business – To ensure the success of the business, the potential
entrepreneur has to spend substantial time and energy on choosing the right line of activities.
Opportunity seeking – A number of business opportunity may be obtainable; however,

seeking the right business opportunity depends upon the entrepreneur’s capabilities, his
strengths and weaknesses and also on his preferences.
Decision-making process – This final step in project identification involves making

important decisions regarding the project to be undertaken. Project identification cannot be
complete without identifying the characteristics of the project.
PROJECT IDEAS
It is the first and foremost task of an entrepreneur to find out suitable business which is
feasible and promising and which merit further examination and appraisal. Therefore, he has
to first search for a sound workable business idea and give a practical shape to his idea. while
doing so, the entrepreneur has to tackle the various problems from time to time to achieve the
ultimate success. Since the good project ideas are elusive, a variety of sources should be
tapped to stimulate the generation of project ideas.

Sources of Project Ideas
Analyse the Performance of Existing Industries
A study of existing industries in terms of their profitability and capacity utilisation is helpful.
The analysis of profitability and break even level of various industries indicates promising
investment opportunities. Opportunities which are profitable and relatively risk free. An
examination of capacity utilisation of various industries provides information about the
potential for further investment. Such a study becomes more useful if it is done regionwise,
particularly for products which have high transportation costs.
Examine the Inputs and Outputs Of Industries
An analysis of the inputs required for various industries may throw up project ideas.
Opportunities exist when (I) materials purchased parts, or supplies are presently being
procured from different sources with attendant time lag and transportation costs and (ii)
several firms produce internally some components/parts which can be supplied at a lower
cost by a single manufactures who can enjoy economies of scale.
A study of the output structure of existing industries may reveal opportunities for further
processing of output or even processing of waste.
Examine Imports and Exports
An analysis of import statistics for a period of five to seven years is helpful in understanding
the trend of imports of various goods and the potential for import substitution. Indigenous
manufacture of goods currently imported is advantageous for several reasons:
It improves the balance of payments situation
It provides market for supporting industries and services
It generates employment
Likewise, an examination of export statistics is useful in learning about the export

possibilities of various products.
Plan Outlays and Government Guidelines
The government plays a very important role in our economy. Its proposed outlays in different
sector provides useful pointers toward investment opportunities. They indicate the potential
demand for goods and service required by different sectors.
Suggestions of Financial Institutions and Developmental Agencies
In a bid to promote development of industries in their respective states, state financial

corporations state industrial development corporations and other developmental bodies
conduct studies, prepare feasibility reports and offer suggestions to potential entrepreneur.
The suggestions of these bodies are helpful in identifying promising projects.

Investigate Local Materials and Resources
A search for project ideas may begin with an investigation into local resources and skills,
various ways of adding value to locally available materials may be examined. Similarly, the
skills of local artisans may suggest products that may be profitably produced and marketed.
Analyse Economic and Social Trends
A study of economic and social trends is helpful in projecting demand for various goods and
services. Changing economic conditions provide new business opportunities. A great
awareness of the value of time is dawning on the public. Hence the demand for time saving
products like prepared food items, ovens and powered vehicles has been increasing. Another
change that we are witnessing is that the desire for leisure and recreational activities has been
increasing. This has caused a growth in the market for recreational products and services.
Identify Unfulfilled Psychological Needs
For well established, multi brand product groups like bathing soaps, detergents, cosmetics
and tooth pastes, the question to be asked is not whether there is an opportunity to
manufacture something to satisfy an actual physical need but whether there are certain
psychological needs of consumers which are presently unfulfilled. To find whether such an
opportunity exists, the technique of spectrum analysis may be followed. This analysis is done
somewhat as follows.
Important factors influencing brand choice are identified respect of the factors identified in
step gaps which exist in relation to consumer psychological needs are identified.
Visit to Trade Fairs
Attending the National and International trade fairs provides an excellent opportunity to
know about new products and new development.
The abovesaid sources of project ideas may be generated by the Government agencies, credit
institutions, non governmental organisations and also by public.
The Govt. have largest resources and have the necessary information to generate project ideas
and it plays a predominant role in this sphere. The government has the required facilities and
manpower to conduct detailed studies which may lead to making investment decisions. Banks
and other financial institutions are actively involved in sharing the social responsibility of
achieving the national objectives of economic development. The co-operatives and non
governmental organisations as well as individual entrepreneurs are now actively participated
in identification of projects.
Classification of Projects
i) National and International projects: Just as Indian companies invite collaboration from
foreign companies to set up plants in India, in the same way, Indian entrepreneurs extend
their skills outside their skills outside the country to set up plants in other host countries. The

projects set up by large industrial houses or government undertakings in other countries are
known as international projects. In order to participate in international projects, much greater
efforts by the entrepreneur are required to understand the conditions in that country and
evaluate the project opportunities more carefully. The risks associated with these projects are
much higher and of a different nature.
ii) Industrial and Non-Industrial Projects: The national projects can be classified into
industrial and non-industrial projects. The examples of non-industrial projects are: healthcare
projects, educational projects, irrigation projects, agricultural development projects, soil
conservation projects, etc. In case of non-industrial projects, the benefits are not easy to
qualify as the main purpose of these projects is social service. The investments in non-
industrial projects are made by the Central or State governments. Allocations are made in the
annual budget and development plants are included in the Five Year Plans.
On the other hand, projects with money- making mission belonging to business organizations
are undertaken to ensure generation of wealth and are known as industrial projects.
iii) Projects Board on Level of Technology: On the basis of technology, industrial projects
can be classified into high technology, conventional technology and low technology projects.
High technology projects involve very huge amount of investments. The examples of high
technology projects are; space projects, nuclear power projects and sophisticated electronic
projects. The projects which use traditional or known technologies in the process industries
such as steel, sugar, cement, chemicals, etc., are known as conventional technology projects.
Most of the products which are produced for use in other industries or the final products
which are used directly by people come from these conventional technology projects.
Investment in these projects is of a sizeable amount though not very huge.
Project which produces products of daily use, e.g., soap, detergents, cosmetics, etc., belongs
to low-technology projects. Several products which are reserved for the small scale belong to
low technology type. Investment requirement of such projects is not high.
iv) Projects Based on Size: Projects based on size of investment and plant capacity are
classified as large, medium and small projects. Projects with a capital outlay of less than s. 5
Crore are regarded as small-scale projects, projects requiring an investment of more than Rs.
100 crore are treated as large-scale projects and projects those falling between these two
limits are considered as medium-sized projects. While large and medium size projects are
given financial assistance by All India Financial Institutions like IDBI, IFCI and ICICI and
commercial banks, small size projects receive financial assistance from State Financial
Corporations. Small size projects are also assisted by State Industrial Development
Corporations in obtaining their raw materials, equipment’s, etc.
v) Projects Based on Ownership: Projects based on ownership can be classified into three
categories; public sector projects, private sector projects and joint sector projects.
• Public Sector: Projects which are owned by the government—Central or Stat or both—are
known as public sector projects. These projects may be controlled either directly by the

administrative ministries/ departments or through public sector Enterprises/ Public Sector
Undertakings ( PSE or PSU) which are owned by the government railways, Airlines, State
Transport Corporations, SBI and Other Nationalized Banks, LIC, Steel Plants—Rourkela,
Bhilai and Durgapur, etc., are some of the examples of public sector projects.
• Private Sector Projects: projects with complete ownership in the hands of promoters and
investors are known as private sector projects. The owners of such projects are individuals,
partnership firm or a company (private or public but not PSU). While the profit motive is not
the primary consideration of public sector projects, it is an important consideration in private
sector projects. No entrepreneur would like to invest in a project which does not give him
adequate returns.
• Joint Sector Projects: Projects where ownership belongs to partnership between thee State
and private entrepreneurs are known as joint sector projects, in such projects, normally the
management expertise is from the private sector and the partner representing the government
helps in liaison with various government authorities including large scale funding. The main
consideration for investment in joint sector projects is the desire on the part of the State to
utilize managerial talents and marketing capabilities of thee private entrepreneur. From the
entrepreneur’s point of view, joint sector is attractive because he does not have to make all
the contribution for its investment.
6) Infrastructure Projects: Projects which are undertaken to provide infrastructure facilities

in the country are known as infrastructure projects. These projects strong stimulus to the
infrastructure through huge amount of investment and generally belongs to power, roads,
telecom and ports. Infrastructure projects differ from conventional projects for manufacture
of goods and services and needs substantial resources with long implementation schedule.
7) Need Based Projects: Any project undertaken for implementation by an organization

must have some specific purpose or need. The recognition of such specific need is important
for successful management of the project. A new industrial project which is implemented by
a well-established organization may be categorized out of the following group of projects:
i) Balancing Project: A project for augmenting or strengthening capacity of a particular area

or areas within the chain of entire production plant, with the purpose to harmonize production
capacity of all the production centers within the plant, is known as a balancing project.
Balancing projects are undertaken in order to harmonize capacities of different production

shops within the plant, so that ultimately the plan production of the final product in increased.
ii) Modernization Project: due to continuous up gradation of technology and production

processes, modernization becomes inevitable for any organization to take advantage of new
technologies/ processes, new input materials, new production methods, etc. To remain
competitive and produce at reasonable price, the company cannot afford to continue with
obsolete technology.

Modernization projects are undertaken with the objective of improvement in plants and
processes by new machineries, new techniques and new processes and are not meant for
changes in the line of activities/ products of the organization. This type of projects results in
higher output and also brings in economy in operations with ultimate effect in the form of
increased profitability of the organization.
iii) Expansion Project: Project undertaken by an organization with the goal for major
increase in the volume of output of the existing products or services is known as an expansion
project. A large organization manufacturing television sets with installed capacity of 1,00,000
sets per annum may have a project for increase its capacity to 1,50,000 sets per annum by
installing another plant, such a project is called ‘ expansion project’ of the organization. An
important consideration for undertaking expansion projects is the intention of the firm to
meet an anticipated growth in demand for the product or to increase its market share for the
product.
iv) Replacement Project: Replacement project is undertaken to replace certain part of the
plant which is creating problems/ breakdowns due to age and wear and tear. Such problems
lead to increase in maintenance cost and reduction in plant output. With the help of a
replacement project, the relevant part of the plant including the old machineries by new one is
replaced which reduces the maintenance cost and increases the level of output of the
organization.
Replacement project is generally cost based and does not have enough scope to expect
additional revenues from the projected investment. The appraisal is made with the estimated
benefits from such investment in the shape of saving the maintenance cost and achieving the
sales target by timely deliveries.
v) Diversification Project: Project undertaken by an organization for activities completely

different from its current activities is considered as diversification project.
PHASES OF PROJECT LIFE CYCLE
There are four phases of project life cycle:
1) FIRST PHASE: In this phase project life cycle involves the identification of a need,
problem or opportunity and can results in the costumers requesting proposals from
individuals, a project team or organization (contractors) to address the identified need or
solve the problem. The need and requirements are usually written up by the customer in a
document called a Request for proposal (RFP). Through the RFP, the customer asks
individuals or contractors to submit proposals on how they might solve the problem, along
with the associated cost and schedule.
Not all situations involve a formal RFP, however, Needs often are defined informally during
a meeting or discussion among a group of individuals. Some of the individuals may then
volunteer or be asked to prepare a proposal to determine whether a project should be
undertaken to address the need. It is important to define the right need.

2) Second Phase: The second phase of the project life cycle is the development of a proposed
solution to the need or problem. This phase results in the submission of a proposal to the
customer by one or more individuals or organizations ( contractors) who would like to have
the customer pay them to implement the proposed solution. In this phase, the contractor effort
is dominant. Contractors interested in responding to the RFP may spend several weeks
developing approaches to solving the problem, estimating the types and amounts of resources
that would be needed as well as the time it would take to design and implement the proposed
solution. In many situations, a request for proposal may not involve soliciting competitive
proposals from external contractors. A company’s own internal project team may develop a
proposal in response to a management defined need or request. In this case, the project would
be performed by the company’s own employees rather than by an external contractor.
3) Third Phase: The third phase of the project life cycle is the implementation of the
proposed solution. This phase begins after the customer decides which of the proposed
solutions will best fulfill the need and an agreement is reached between the customer and the
individual or contractor who submitted the proposal. This phase, referred to as performing the
project, involves doing the detailed planning for the project and then implementing that plan
to accomplish the project objective.
4) Fourth and Final Phase: The final phase of the project life cycle is terminating the
project. When a project is completed, certain close-out activities need to be performed, such
as confirming that all deliverables have been provided to and accepted by the customer, that
all payments have been collected and that all invoices have been paid. An important task
during this phase is evaluating performance of the project in order to learn what could be
improved, if a similar project were to be carried out in the future. This phase should include
obtaining feedback from the customer to determine the level of the customer’s satisfaction
and whether the project met the customer’s expectations. Also, feedback should be obtained
from the project team in the form of recommendations for improving performance of projects
in the future.
METHODS OF IDEA GENERATION
Mind Mapping
It is a technique of presenting information. Here we show the links between the different
elements or the pieces of information. The links or connection is usually shown with the help
of lines and arrows. It’s a visual way of presenting the information.
For example, let’s suppose you want a name for your new application. You will start by
writing the main topic in the center of a paper, which here is the name for your new
application.
Now from every key aspect, there will be more arrows pointing out. These arrows will
describe the key aspect in detail. Like ‘guidelines’ will talk about the name being able to
express what the application does, following the naming scheme, etc.

Reverse Thinking
As is very clear from the name itself this technique asks us to think oppositely. Instead of
working on the problem in front of us, we work on the exact opposite of it.
For example, let us assume you want to know ‘how to increase your followers on social
media platforms. According to this technique, you will instead think of ‘how will I not
increase my followers on social media platform’.
To this question, you will get answers like, by not posting regularly, or posting low-quality
content, etc. Now you just have to reverse your answers.
Brainstorming
This technique is quantitative meaning that you come up with a large number of ideas. Here a
group comes up with a different probable solution to the problem.
For example, if you along with some of your colleagues are trying to come up with a tagline
for your product. And each one of you gives your ideas, then that is called brainstorming.

SCAMPER
The word SCAMPER is an acronym.
S -Substitute
C – Combine
A – Adapt
M – Modify
P – Put to another use
E – Eliminate
R – Reverse
Role-Playing
In this technique, the participants take up roles to play. These roles are different from the
ones they usually play. It adds an element of fun and helps get innovative ideas.
For example, you could take up the roles of customers and discuss your expectations and
what you want from products. This could lead you to stumble upon some good ideas.
Storyboarding
This technique refers to the process of making storyboards to generate ideas. Storyboards use
pictures, illustrations, and other information to better present the ideas.

For example, suppose you are working on an idea for an advertisement. You can portray the
different scenes in the form of a storyboard. This helps you in better visualization and you
can make changes accordingly.
Brain writing
In this technique, a group of people writes their ideas on a piece of paper. After the
designated time for writing is over the paper is given to a different person.
Now this person reads the ideas on the paper they got and adds their ideas on the paper. This
continues until everyone has put their ideas on all the papers. And following this, there is a
discussion on each idea.
Forced Relationship
This technique helps to come up with unique ideas. Here you take two unrelated things and
imagine putting them together to see what new thing you can come up with.
For example, take a calculator and a pencil; these are unrelated to each other. Now try putting
them together. You might get some interesting ideas like a calculator with a touch screen and
a pencil to write on it and a lot more.
Collaboration
This technique is self-explanatory. Here you collaborate with others to come up with ideas. If
you collaborate with a diverse group of people your ideas will be more unique.
This happens because every person brings a different perspective. For example, if you want
to increase the sale of a particular product you might want to collaborate with industry
experts, specialists, or people working in domains other than sales.

The 5 W’s
Who, What, Where, When, and Why are the five W’s. Answering these five W’s helps us
achieve a very holistic view of the topic under discussion. And it is an efficient way to come
up with solutions and ideas.
For example, suppose you want to create a new product or a service. You can do so by asking
questions like, who would use the product, why would people buy it, what would it do, etc.
PROJECT SELECTION
Project selection starts from where project identification ends. Project selection is a careful
study of each project idea in detail and choosing one of them for further consideration and
development. It is not too difficult to find good projects in need of investment or other
assistance.
Project selection means choosing the best project from among alternative proposals on the
basis of cost-benefit analysis. It is a process to assess each project idea and select the project
with the highest priority.
Parameters for Project Selection:
Macro-Parameters for Project Selection:
Permissibility of such a project in the:
i. Existing legal and social condition;
ii. Government policies relevant to such project;
iii. Prevalent situation within the relevant industry including over-all market size with its
growth and envisaged market share;
b. Foreign participation, foreign know-how and the liability to pay the foreign partner, as
such;
c. Availability of funds from the Financial Institutions on top of the organisation’s own
equity participation and the condition of the capital market;
d. Opportunity for employment (with productivity);
e. Overall benefits for a specific project like export-oriented units (EOUs) or projects within
export processing zones (EPZs).
f. Foreign participation with terms of ‘buy-back’;
g. Tax concessions relevant to such project;
h. Government subsidies relevant to such project, such locations planned;
i. Strength and weaknesses of the competitors in the industry relevant to such project.

Micro-Parameters for Project Selection:
The considerations within the micro-parameters for the selection of the project by the project
owner (once the proposed project is favourable within the macro-parameters) should include:
a. The need of the organisation for such a project. The basic objectives should be directed
towards solving the problems or availing of certain opportunities for investments as per the
need.
b. The necessary resources should be available to the organisation, selecting such project
including :
i. The initial fund for investment;
ii. The organisational strength to implement and run the project;
iii. The required technical know-how;
iv. Sourcing of the basic inputs like raw materials, utilities.
c. The economic viability of such a project.
MEANING AND DEFINITION OF PROJECT FEASIBILITY ANALYSIS
Feasibility literally means whether some idea will work or not. It knows beforehand whether
there exists a sizeable market for the proposed product/ service, what would be the
investment requirements and where to get the funding from, whether and wherefrom thee
necessary technical know- how to convert the idea into a tangible product may be available
and so on. In other words, feasibility study involves an examination of the operations,
financial, HR and marketing aspects of a business on ex ante (before the venture comes into
existence) basis.
Project Feasibility Analysis results in a reasonably adequate formulation of the project in

terms of location, production technology, production capacity, material inputs etc., and
contains fairly specific estimates of project cost, means of financing, sales revenues,
production costs, financial profitability and social benefits.
Various dimensions of project feasibility study are analyzed throughout different stages of
feasibility study in varying degrees of detail, both separately and in relation to others. Thus, a
multi–dimensional feasibility analysis is a vital exercise.
If a project is seen to be feasible from the results of the study, the next logical step is to
proceed with it. The research and information uncovered in the feasibility study will support
the detailed planning and reduce the research time.
Content of Feasibility Analysis
The sources for content in a feasibility analysis come through extensive research, discussion
and assessment and may incorporate the use of advanced computer modeling to determine the

long-term impact of a project on the environment around it. Other feasibility analyses may be
rooted only in anecdotal evidence as provided by those who have worked on similar efforts or
those who will ultimately be affected by the project’s outcome.
A basic pre-project feasibility analysis might include the following:
1) Executive Summary/Project Goal: Overview or description of the impact of the project

on its environment and the potential for success (or failure) based on the analysis. This may
also include brief mention of the alternatives considered and their relative viability.
2) Project Description
i) Anticipated As–Built Condition: This section is a description of the project as envisioned,

including magnitude, location, community impact and market change.
ii) Anticipated Outputs: In this section, both intended and consequential outputs of the
project should be incorporated, without comment as to their relative or detriment to the world
around them.
3) Project Environment
i) Financial: This section describes the financial climate in which the project will be
developed and implemented. This may include assessments of the relative magnitude of the
project within the overall organizational budget and the potential drain on available
resources.
ii) Physical Environment: A feasibility analysis should include a description of the

environment surrounding the project, including the physical locations for development and
implementation.
iii) Societal/Cultural environment: Descriptions of the culture and society in and around the
project community are another aspect to a feasibility analysis. This may include an emphasis
on those social and cultural issues that will be directly affected by project development and
implementation.
4) Similar Efforts
i) Scenarios: The section provides an outline of similar efforts and a synopsis of their effects
on the finances and physical and social environments of their project organizations and
communities.
ii) Similarities and Implications: Determination of the degree of similarity between the
scenarios outlined and the project(s) under scrutiny in the feasibility analysis is covered.
5) Sensitivity Analyses
i) Financial: A “what – if” analysis of finances to determine if the project is deemed viable is
an important aspect of a feasibility analysis. An assessment of other organizational areas

affected is included. This analysis may also examine the potential range of financial
possibilities if the project fares extremely well or poor.
ii) Physical Environment: It involves a “what-if” analysis of the physical environment if the
project is deemed viable. It includes an assessment of physical effects to the organization and
thee areas around the project. This analysis may also examine the potential range of physical
manifestations if the project fares extremely well or poor.
6) Marketing/Public Relations
i) Market Analysis: The market analysis includes an assessment of the potential market for
the project or its outputs, including ( but not limited to) the financial buying power of the
market, interest in or demand for the project and the life span of the market’s members.
ii) Forecasts: Predictions regarding sales, returns and buying trends related to the project and
its outputs are included in the forecasting section. Ideally, the forecast includes the timing of
the market entry and the relative impact of early or late into the marketplace.
iii) Competitive Environment: The competitive environment section contains information

on other organizations capable of conducting the project and/or producing its deliverables (or
their equivalent).This may also incorporate some assessment of how potentially fickle the
market may be based and the potential market impact if those risks come to pass.
7) Conclusions and Recommendations: Based on the information from the analysis, it

explains the conclusions that can be drawn regarding the viability (or non-viability) of the
project , given the environment in which it will be developed and implemented. This
normally includes a go/no-go decision and the implications of both of those decisions.
Steps/Dimensions of Feasibility Analysis
In general terms, the elements of a feasibility analysis for a STEP should cover the following
items:
1) Need Analysis: This indicates the recognition of a need for the project. The need may
affect the organization itself, another organization, the public, or the government. A
preliminary study should be conducted to confirm and evaluate the need. A proposal of how
the need may be satisfied is then developed. Pertinent questions that should be asked include;
i) Is the need significant enough to justify the proposed project?
ii) Will the need still exist by the time the project is completed?
iii) What art h alternate means of satisfying the need?
iv) What is the economic impact of the need?
2) Process work: This is the preliminary analysis done to determine what will be required to
satisfy the need. The work may be performed by a consultant who is a subject matter expert
in the project field. The preliminary study often involves system models or prototypes. For

STEPs, artist’s conception and scaled down models may be used for illustrating the general
characteristics of a process.
3) Engineering and Design: This involves a detailed technical study of the proposed project.
Written quotations are obtained from suppliers and sub-contractors as needed. Technology
capabilities are evaluated as needed. Product design, if needed, should be done at this stage.
4) Cost Estimate: This involves estimating project cost to an acceptable level of accuracy.
Levels of around 5% to +15% are common at this level of a project plan.
Both the initial and operating costs are included in the cost estimation. Estimate of capital
investment, recurring and non-recurring costs should also be contained in the cost estimate
document.
5) Financial Analysis: This involves an analysis of the cash flow profile of the project. The
analysis should consider r-capitalization requirements, return on investment, inflation,
sources of capital, pay-back periods, break-even point, residual values, market volatility and
sensitivity. This is a critical analysis since it determines whether or not and when funds will
be available to the project. The project cash flow profile helps to support the economic and
financial feasibility of the project.
6) Project Impacts: This portion of scope feasibility analysis provides an assessment of the
impact of the proposed project. Environmental, social, cultural and economic impacts may be
some of the factors that will determine how a STEP is perceived by stakeholders. The value-
added potential of the project should also be assessed. A value tax may be assessed based on
the price of a product and the cost of thee raw material used in marketing the product. Thee
tax so collected may be viewed as a contribution to government coffers for re-investment in
the science, technology and engineering infrastructure of the nation.
7) Conclusions and Recommendations: Scope feasibility analysis should end with the
overall outcome of the project analysis. This may indicate an endorsement or disapproval of
the project. If disapproved, potential remedied to make it right should be presented.
Recommendations on what should be done should be included in the scope feasibility report.
Type of Feasibility Analysis
The feasibility study includes the following types of feasibility analysis:
1) Technical Feasibility: The technical feasibility refers to the ability of the process to take
advantage of the current state of art technology in pursuing further improvement. The
technical capability of the personnel as well as the capability of the available technology in
relation to the requirements of the proposed project idea should be considered and the extent
of compatibility should be studied.
2) Managerial Feasibility: The managerial feasibility involves the capability of the

infrastructure of a process to achieve and sustain process improvement. Management support,

employee involvement and commitment are the key elements required to ascertain
managerial feasibility.
3) Economic Feasibility: The economic feasibility analyzes sis, the feasibility of the
proposed project to generate economic benefits. A cost-benefit analysis and a break-even
analysis are used while evaluating the economic feasibility of new industrial projects. In a
cost – benefit analysis, all tangible benefits and costs as well as intangible benefits and costs
are identified before obtaining the B_C ratio. The break- even analysis helps to find the
break- even quantity at which the project has no loss or gain.
4) Financial Feasibility: The financial feasibility attempts to assess the capability of the
project organization to raise the appropriate funds needed to implement the proposed project.
Loan availability, credit worthiness, equity and loan schedule are important aspects of
financial feasibility analysis.
5) Cultural Feasibility: The cultural feasibility deals with the compatibility of the proposed
project with the cultural set-up of the project environment. In labor intensive projects,
planned functions must be integrated with the local cultural practices and benefits. Some
examples of cultural factors are religion, custom- life style, etc.
6) Political Feasibility: The political feasibility deals with the initial acceptance of the
project and sustenance of the project in the long-run by the prevailing political system. This is
particularly true for the large projects with national visibility that may have significant
government inputs and political implications. The issues on which political intervention may
arise are conversion of land from agricultural use to industrial us, anticipated health hazard if
the project is implemented, possible air pollution and water pollution, possible
unemployment due to hi-tech projects, etc.
7) Environmental Feasibility: The environmental feasibility is very much important. If the

commissioning of the project results with any kind of pollution, it will be visible to the
public, administrators and politicians. If necessary corrections and preventive measures are
not taken by the project firm to prevent/curtail pollution, the project will be forced to meet
certain problems in terms of opposition from different circles. As a result, sometime, the
project firm may be pushed to the corner of closure/re-location of the project itself which will
cost the organization more.

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DEPARTMENT OF COMPUTER SCIENCE AND ENGINEERING – (R19)

INTERNAL EXTERNAL TOTAL

NARASARAOPETA ENGINEERING COLLEGE (AUTONOMOUS) Page 1

EDP’s -Phases and evolution on EDP’s existing and new Entrepreneurs.

NARASARAOPETA ENGINEERING COLLEGE (AUTONOMOUS) Page 2

1. Explain the characteristics of entrepreneur. CO1 K2 5

2. Classify the various types of entrepreneurs. CO1 K4 5

3. Explain the characteristics of entrepreneurship. CO1 K2 5

Explain the role of entrepreneurship in economic

Classify the various ethics and social

6. Explain the concept of Entrepreneur. CO1 K2 5

1. Define creativity and Explain nature of creativity. CO2 K4 10

2. Explain the characteristics of creativity. CO2 K4 10

3. Analyze the factors affecting on creativity. CO2 K4 10

4. Explain the process of creativity. CO2 K4 10

5. Explain the importance of innovation. CO2 K4 10

6. Distinguish the Creativity and Innovation. CO2 K2 5

1. Explain the need of FDPs. CO3 K1 10

2. What are the objectives of FDPs? CO3 K2 10

3. List and explain the phases of FDPs. CO3 K1 10

4. Illustrate the characteristics of project. CO4 K2 10

Explain the various steps process of project

6. What are the sources of new ideas? CO4 K2 10

1. List out the methods of idea generation CO4 K4 5

2. Explain the project feasibility analysis CO4 K2 5

3. Discuss the various steps of feasibility analysis CO4 K6 5

4. Explain the types of feasibility analysis CO4 K2 5

5. Explain the importance and features of MSME's CO5 K2 5

Discuss the various policies and their support to

a) Explain the characteristics of an entrepreneur. CO1 K2 5

a) Analyze the factors affecting on creativity. CO2 K4 5

Explain the importance of entrepreneurship

Explain the Phases of entrepreneurship

a) Analyze the sources of new Idea. CO4 K4 5

3. a) Explain the importance of MSME’s. CO5 K5 5

b) List out the various types of growth strategies CO5 K4 5

ENTREPRENEUR AND ENTREPRENEURSHIP

An entrepreneur is ordinarily called a businessman. He is a person who combines capital and

An entrepreneur is the founder of the enterprise who identifies opportunities, assembles

An entrepreneur is a highly achievement oriented, enthusiastic and energetic individual. He is

 An entrepreneur brings about change in the society. He is a catalyst of change.

 Entrepreneur is action-oriented, highly motivated individual who takes risk to achieve

 Entrepreneur accepts responsibilities with enthusiasm and endurance.

 Entrepreneur is thinker and doer, planner and worker.

 Entrepreneur builds new enterprises. He possesses intense level of determination and

 Entrepreneur finds the resources required to exploit opportunities.

 Entrepreneur does extraordinary things as a function of vision, hard work, and

9 characteristics of an entrepreneur are;

Entrepreneur is a risk taker.

Entrepreneur is a profit maker.

Entrepreneur is an achievement motivator.

Entrepreneur is a capital provider.

Entrepreneur is the determinant of the nature of the business.

Entrepreneur is a reward receiver.

Entrepreneur is a challenge taker.

Y.SURESH, MBA, M.Com (M.PHIL)

An entrepreneur is perceived as an economic agent who assembles materials for producing

2. Entrepreneur is a risk taker: An entrepreneur is a person who identifies the nature of

3. Entrepreneur is a profit maker: An entrepreneur is an individual who establishes and

4. Entrepreneur is an achievement motivator: “entrepreneurs are action-oriented, highly’

5. Entrepreneur is a capital provider: Entrepreneur a person who operates a business by

6. Entrepreneur is the determinant of the nature of the business: Entrepreneur is the