Dr.

SHAKUNTALA MISRA NATIONAL REHABILITATION UNIVERSITY

LUCKNOW

Faculty of Law
For

[ ENTREPRENEURSHIP & INTRAPRENEURSHIP ]

[ BUSINESS ORGANISATION ]

CLASS: B.Com L.L.B (Hons.)

1ST Semester

Under the Supervision of

SUBMITTED TO SUBMITTED BY

Ms. MALANI MA’AM AKHIL TIWARI

B.com LLB(Hons.)
1ST semester
Faculty Of Law

D.S.M.N.R.U D.S.M.N.R.U
 INDEX

S.N TOPIC
O PAGE.NO REMAR
K
1. Introduction

2 Four Key Elements of Entrepreneurship

3. Traits of an entreprenuer

4. Types of entrepreneur

5. Intrapreneurship

6. Creativity

7. Environment scanning

8. Developing effective business plans

9. Entrepreneurial motivation

10. Conclusion
 ACKNOWLEDGEMENT

I would like to express my special thanks of gratitude to my teacher Ms. Malani

ma'am who gave me the golden opportunity to do this wonderful project on the
topic ENTREPRENEURSHIP & INTRAPRENEURSHIP which also helped me
in doing a lot of Research and I came to know about so many new things I am really
thankful to them. Secondly I would also like to thank my parents and friends who
helped me a lot in finalizing this project within the limited time frame.
 INTRODUCTION

Entrepreneurship is defined as the process of making money, earning profits and

increasing the wealth while posing characteristics such as risk taking, management,
leadership and innovation. The term Entrepreneurship is a complicated term and gives
various meaning depending on the situation. The word entrepreneur has a French
origin. It originated during the Middle Ages when the term entrepreneur was applied
to “the man in charge of the great architectural works: castles and fortifications,
public buildings, abbeys and cathedrals”. It is derived from the French word,
entreprendre, which means “to undertake.” In a business context, it means to
undertake a business activity or simply to start a business. The Merriamtebster
Dictionary defines an entrepreneur as ‘one who organizes, manages, and assumes the
risks of a business or enterprise’. The concept of Entrepreneurship has wide range of
meanings. On one extreme an entrepreneur is a person of very high aptitude who
pioneers change, possessing characteristics found in only a very small fraction of the
population. On the other extreme, anyone who wants to work for himself is
considered to be an entrepreneur. That is, entrepreneurship is equated to simply
starting one’s own business. Most economists believe it is more than that. To some
economists, the entrepreneur is one who is willing to bear the risk of a new venture if
there is a significant chance for profit. Others emphasize the entrepreneur plays a role
of an innovator who markets his innovation. Still other economists say that
entrepreneurs develop new goods or processes that the market demands and are not
currently being supplied. The concept of entrepreneurship was first established in the
1700s, and the meaning has evolved ever since. Various economists and philosophers
termed this differently in their own unique ways. Cantillon referred entrepreneurs as
one of the classes of ‘landowners’ who are financially independent aristocrats. For
him; individuals who purchased a good at a certain price, used that good to produce a
product and then sold that product at an uncertain price could be considered
‘entrepreneurs’. Risk and uncertainty play central parts in his theory of the economic
system. Successful entrepreneurs were those individuals who made better judgments
about changes in the market and who coped with risk and uncertainty better than their
counterparts. The entrepreneurial motivation is one of the most important factors
which accelerate the pace of economic development by bringing the people to
undertake risk bearing activities.

Four Key Elements of Entrepreneurship

 Innovation
 Risk taking
 Vision
 Organizing skills
In many of the developing countries a lot of attention is being paid to the
development of entrepreneurship because it is not the proprietary quality of any caste
and community. The entrepreneurship is usually understood with reference to
individual business. Entrepreneurship has rightly been identified with the individual,
as success of enterprise depends upon imagination, vision, inventiveness and risk
taking. The production is possible due to the cooperation of the various factors of
production, popularly known as land, labour, capital, market, management and of
course entrepreneurship. The entrepreneurship is a risk taking factor, which is
responsible for the end result in the form of profit or loss. The early history of
entrepreneurship in India reflects from the culture, customs and tradition of the India
people. The Baliyatra Festival of Cuttack, Orissa reminiscence of past glory of
International trade. The process of entrepreneurship, therefore passed through the
potential roots of the society and all those who accepted entrepreneurial role had the
cultural heritage of trade and business. Occupational pursuits opted by the individual
under the caste system received different meaning of value attached to
entrepreneurship, which is based on social sanctions. As society grew and the process
of business occupation depended and the value work tended towards change and the
various occupational role interchanged with non-role group and sub-groups. People
from different castes and status also entered into the entrepreneurial role. The
emergence of entrepreneurship in this part of the country got localized and spread
effect, took its own time. The concept of growth theory seems to be closely related in
explaining the theory of entrepreneurship development as well. In the 20th century,
economist Joseph Schumpeter (1883-1950) focused on how the entrepreneur’s drive
for innovation and improvement creates upheaval and change. Schumpeter viewed
entrepreneurship as a force of “creative destruction.” The entrepreneur carries out
“new combinations,” thereby helping render old industries obsolete. Established ways
of doing business are destroyed by the creation of new and better ways to do them.
According to A Schumpeter “The entrepreneurship is essentially a creative activity or
it is an innovative function”. After the Second World War, entrepreneurship received
new meaning for attaining economic development within the shortest possible time;
as concern for economic development became all-pervasive. There was a growing
concern for economic development and this strengthened interest in enterprises. This
led to the development of the entrepreneurship in India. Business expert Peter
Drucker (1909-2005) took this idea further, describing the entrepreneur as someone
who actually searches for change, responds to it, and exploits those changes as an
opportunity. For instance; a change converted from typewriters to personal computers
to the Internet. According to Peter P Drucker, “Entrepreneurship is neither a science
nor an art. It is a practice. It is knowledge based. Knowledge in entrepreneurship is a
means to an end, that is, by the practice.” The culture of a community also may
influence how much entrepreneurship there is within it. Different levels of
entrepreneurship may stem from cultural differences that make entrepreneurship more
or less rewarding personally. A community that accords the highest status to those at
the top of hierarchical organizations or those with professional expertise may
discourage entrepreneurship. A culture or policy that accords high status to the “self-
made” individual is more likely to encourage entrepreneurship. In crux these are
various interchangeable meanings of what is entrepreneurship.
 A theory of evolution of economic activities.
 A continuous process and an ingredient of economic development.
 Essentially a creative activity or an innovative function.
 A risk taking factor which is responsible for an end result.
 The name given to the factor of production, which performs the functions of
enterprise.
 Creates awareness among people about economic activity.
 Generates Self-employment and additional employment.
TRAITS OF AN ENTREPRENUER

 He is a person who develops and owns his own enterprise.

 He is a moderate risk taker and works under uncertainty for achieving the goal.
 He is innovative.
 He peruses the deviant pursuits.
 Reflects strong urge to be independent
 Persistently tries to do something better.
 Dissatisfied with routine activities.
 Prepared to withstand the hard life.
 Determined but patient.
 Exhibits sense of leadership.
 Also exhibits sense of competitiveness.
 Takes personals responsibility.
 Oriented towards the future.
 Tends to persist in the face to adversity.
 Convert a situation into opportunity.

Who is an Entrepreneur?

Entrepreneurship is a very famous word amongst the business community life. But,
there are many common people still cannot get the definition and the meaning for who
is the entrepreneur. ‘One who undertakes an endeavor’ is the meaning of the French
word entrepreneur. There is no one definitive profile. Successful entrepreneurs come
in various ages, income levels, gender, and race. They differ in education and
experience. But research indicates that most successful entrepreneurs share certain
personal attributes, including: creativity, dedication, determination, flexibility,
leadership, passion, self-confidence, and “smarts.” Creativity is the spark that drives
the development of new products or services or ways to do business. It is the push for
innovation and improvement. It is continuous learning, questioning, and thinking
outside of prescribed formulas. Dedication is what motivates the entrepreneur to work
hard, 12 hours a day or more, even seven days a week, especially in the beginning, to
get the endeavour off the ground. Planning and ideas must be joined by hard work to
succeed. Dedication makes it happen. Determination is the extremely strong desire to
achieve success. It includes persistence and the ability to bounce back after rough
times. It persuades the entrepreneur to make the 10th phone call, after nine have
yielded nothing. For the true entrepreneur, money is not the motivation. Success is the
motivator; money is the reward. Flexibility is the ability to move quickly in response
to changing market needs. It is being true to a dream while also being mindful of
market realities. A story is told about an entrepreneur who started a fancy shop selling
only French pastries. But customers wanted to buy muffins as well. Rather than
risking the loss of these customers, the entrepreneur modified her vision to
accommodate these needs. Leadership is the ability to create rules and to set goals. It
is the capacity to follow through to see that rules are followed and goals are
accomplished. Passion is what gets entrepreneurs started and keeps them there. It
gives entrepreneurs the ability to convince others to believe in their vision. It can’t
substitute for planning, but it will help them to stay focused and to get others to look
at their plans. Self-confidence comes from thorough planning, which reduces
uncertainty and the level of risk. It also comes from expertise. Self-confidence gives
the entrepreneur the ability to listen without being easily swayed or intimidated.
“Smarts” consists of common sense joined with knowledge or experience in a related
business or endeavour. The former gives a person good instinct, the latter, expertise.
Many people have smarts they don’t recognize. A person who successfully keeps a
household on a budget has organizational and financial skills. Employment, education,
and life experiences all contribute to smarts. Every entrepreneur has these qualities in
different degrees. But what if a person lacks one or more? Many skills can be learned.
Or, someone can be hired who has strengths that the entrepreneur lacks. The most
important strategy is to be aware of strengths and to build on them. Characteristics of
an Entrepreneur
 Mental Ability: entrepreneur must have creative thinking and must be able to
analyse problems and situations. He should be able to anticipate changes.
 Business Secrecy: he should guard his business secrets from his competitors.
 Clear Objectives: he must have clear objectives as to the exact nature of business
or the nature of goods to be produced.
 Human Relation: he must maintain good relations with his customers, employees
etc. to maintain good relationship he should have emotional stability, personal
relations, tactfulness and consideration.
 Communication Ability: he should have good communication skills means both
the sender and the receiver should understand each others message.

Why Entrepreneurship What leads a person to strike out on his own and start a
business?
The answer lies in the advantages of entrepreneurship.

1. Doing What You Love If an entrepreneur is going to start his business it is assured
he will get better odds to succeed if he is doing something he loves. Why? Because,
passion is the fuel that is needed to face all the obstacles. It is natural to feel fearful to
fail. But to start with ones own business is like leaving Comfort Zone and entering a
Twilight Zone. It is an activity where it should be ensured to strike balance between
the business what you love to do and which is profitable as well. Additionally in the
business jungle; it is of utter most importance to survive being one of the best and that
is easier if the entrepreneur is passionate about what he is doing. Therefore, one of the
advantages of being an entrepreneur is doing what one loves. “Choose a job that you
like and you will never have to work a day in your life.” – Confucius

2. Independence and Freedom Entrepreneurship allows undertaking the activities of

one’s choice and comfort which offers independence and freedom in return. Many
people think independence and freedom means going to work or take vacations when
you want or need. The truth is that is not possible at least in the earlier years of
business. On the other hand, when business is mature, strong and self sufficient, it
begins to offer independence and financial freedom. “Entrepreneurship is living a few
years of your life like most people won’t, so that you can spend the rest of your life
like most people can’t”

3. Recognition and Self Fulfilment Entrepreneurship provides the ability to be

involved in the total operation of the business, from concept to design and creation,
from sales to business operations and customer response. It offers the prestige of
being the person in charge. In line with the Maslow’s hierarchy of needs, it is human
to desire for recognition and strive for self fulfillment and achievement.
Entrepreneurship offers excitement compared to being regular employees.
Entrepreneurs enjoy much excitement beginning from the planning stage of the
business up to development and realization. Thrill seekers obviously love being
entrepreneurs as they are exposed to too much risk. “What a man can be, he must be.
This need we call self actualization.” – Maslow “I have wandered all my life, and I
have also traveled; the difference between the two being this, that we wander for
distraction, but we travel for fulfillment.” – Hilaire Belloc
4. Income Potential Entrepreneurship offers a greater possibility of achieving
significant financial rewards than working for someone else. This is a big one because
when you’re an entrepreneur you can create a direct relationship between your efforts
and your income. In other words: if your efforts are higher your reward should be
higher too. Of course that happens if your efforts are well planned, effective and well
focused. Many people really believe that of all the advantages of being an
entrepreneur this is the best. That’s probably because in comparison to a job where
employer, the company’s financial budget, the Board and the economy decides salary.
In case of an entrepreneur nobody except the market forces defines returns and
income. “A large income is the best recipe for happiness I ever heard of.” – Jane
Austen quotes
5. Own Boss Entrepreneurs are their own bosses. They make the decisions. They
choose whom to do business with and what work they will do. They decide what
hours to work, as well as what to pay and whether to take vacations. “Your real boss
is the one who walks around under your hat.” –Napoleon Hill
6. Innovation Entrepreneurship creates an opportunity for a person to make a
contribution. Most new entrepreneurs help the local economy. A few – through their
innovations – contribute to society as a whole. One example is entrepreneur Steve
Jobs, who co-founded Apple in 1976, and the subsequent revolution in desktop
computers. It gives an individual the opportunity to build equity, which can be kept,
sold, or passed on to the next generation.

TYPES OF ENTREPRENEUR

Starting and growing one’s own business requires many skills to be successful. One
could be a visionary like Bill Gates or a superstar like Peter Sematimba. The
entrepreneur personality types are the traits and characteristics that blend with the
needs of the business. Understanding the types of entrepreneur personality type helps
in enjoying business as well as providing with what it needs to grow in best. Each
entrepreneur personality type can succeed in the business environment if it is true to
character. Identifying strong traits is essential and can act as a compass for the
business.
1. Idealist The idealist entrepreneur is the most common type of entrepreneur. He
likes innovation and enjoys working on something new or creative. He is guided by
more ideals while keeping in view the ideas that are formulated by him in order to
pursue his innovation.
2. Optimizer The optimizer entrepreneur comes in a close second and is content with
the personal satisfaction of simply being a business owner. It is derived from being
optimistic.
3. Hard Workers The hard workers entrepreneur category includes persons who
enjoy putting in long hours to build a larger and more profitable business. They like to
challenge themselves and strive harder to attain the same. They reap the most rewards
if the business turns out to be a multi-million dollar enterprise. Hard work comes with
all businesses but not everyone works hard for the business to grow as this type of
entrepreneurs does.
4. Sustains As the meaning of the word itself implies, sustain is to maintain; the
sustainer type of entrepreneurs comprise of people who like to maintain a balance
between work and a personal life. Most often, they do not wish the business to grow
too large where it will cut into their personal life. These people just need enough to
survive.
5. Improper The improver types of entrepreneur are the ones who predominantly are
focused to start a business to improve the world. Their motto is to work in a manner
which is morally and ethically correct so as to contribute to a noble cause. Improvers
have an unwavering ability to run their businesses with high integrity. At the same
time, these people need to be aware of their tendency of being over critical of
employees and clients in order to be a perfectionist.
6. Advisor These types of people believe in consumer sovereignty where they indulge
excessively in providing customer services. This business personality type will
provide an extremely high level of assistance and advice to customers. They want to
please their customers. Their businesses soon become customer oriented business
which involves providing advisory services to them at a cost to themselves.
7. Superstar This type of entrepreneur is lead by charisma, charm and high energy.
An entrepreneur like this has an overwhelming personality which works in his favour
so does in the favour of business. This personality often will cause to build business
around own personal brand. However, such people tend to become too competitive
and workaholics; which can sour the workplace and the market. Entrepreneur example
is Peter Sematimba, CEO of Super FM.
8. Artiste These are creativity oriented entrepreneurs. Thus, the type of business also
are those which demand huge levels of creativity such as; advertising agencies and
people in the music industry. The artist involves in business activity which is centered
around their talents and creative fields. The limitation faced by such entrepreneur is
that of over sensitively reacting to the customers feedbacks if such is a negative one.
9. Visionary Normally, all the businesses are founded keeping a vision in mind. The
founding members who visualize a dream and materialize the same are known as
visionary. These are thinkers who pursue to make their vision come true. Such people
are curious in nature and have a long sighted vision which helps them in
understanding the world around better thereby to set up plans to avoid pitfall and
hurdles. At the same time, these people lack to relate their dreams with reality which
might result in opposite results when it comes to starting up all new. Thus it is
advisable to act before visualizing.
10. Analyst These types of entrepreneurs excel at problem solving in a systematic
way. Thus businesses involving complications suit them a lot. They are able to crop
up the solution at no cost and less time. The challenge is to realize that too much
analysis can result in no action being taken. Secondly, they might get caught in
analysis paralysis.
11. Fireball Fireball is a casual word used for an energetic person so does it imply for
entrepreneurs. A business owned and operated by a fireball is full of life, energy and
optimism. Such businesses are life energizing and makes customers feel the firm has a
get it done attitude. Since every coin has two sides, such people have a downside too.
In being too outright and energetic, they may over commit and act too impulsively.
Maintaining a balance for impulsiveness with sensitive planning is of utter most
importance.
12. Jugglers A juggler conventionally means entertainer who keeps several plates,
knives, balls, or other objects in the air at once by tossing and catching them. The art
of juggling has been practiced since antiquity. The juggler entrepreneur likes the
concept that the business gives them a chance to handle everything themselves. They
are usually people with lots of energy and exist on the pressure of meeting deadlines,
paying bills and of course making payroll.
13. Hero Hero like entrepreneurs are the people with great willingness and efficient
leadership. He inspires others. He has an incredible will and ability to lead the world
and the business through any challenge. He is the essence of entrepreneurship and can
assemble great companies. Over promising and using force full tactics to get the way
out are the bane sides of being a hero entrepreneur; which definitely is not fruitful in
long term.
14. Healer Healer as the name suggest, nurtures the business by bringing harmony
with a surprising ability to survive with an inner calm. Healer is closely related to
calmness which lets him avoid the outside harsh realities of business. One must keep
a scenario planning to pre prepare for any kind of turmoil.
ENTREPRENEUR vs. MANAGER For many entrepreneurs, one of the most
difficult tasks is to make the successful transition from a creative, taskjuggling
entrepreneur to a business-skill-applying manager.

The terms Entrepreneur and Manager are considered same; but these have different
meanings altogether. These cannot be used interchangeably. The following are some
of the differences between a manager and an entrepreneur. – The main difference
between the two terms is that an entrepreneur starts a business enterprise constituting
of ideas he comprehends; employing personal stakes in it where as a manager
provides his services in an enterprise established by entrepreneur. – An entrepreneur
and a manager differ in their standing, an entrepreneur is the owner of the
organization and he bears all the risk and uncertainties involved in running an
organization where as a manager is an employee and does not undertake
responsibilities for any risk. – An entrepreneur and a manager differ in their
objectives. Entrepreneur’s objective is to innovate and create and he acts as a change
agent where as a manager’s objective is to supervise and create routines. He
implements the entrepreneur’s plans and ideas. – An entrepreneur is faced with more
income uncertainties as his income is contingent on the performance of the firm
where as a manager’s compensation is less dependent on the performance of the
organization. – An entrepreneur is not induced to involve in fraudulent behavior
where as a manger does. A manager may cheat by not working hard because his
income is not tied up to the performance of the organization. – Their areas of
qualifications differ in the sense that; entrepreneur is required to have certain
qualifications and qualities like high accomplishment motive, innovative thinking,
forethought, risk-bearing ability etc. Conversely it’s mandatory for a manager to be
educated in the fields of management theories and practices. “An entrepreneur could
be a manager but a manager cannot be an entrepreneur”. An entrepreneur is intensely
dedicated to develop business through constant innovation. He may employ a
manager in order to perform some of his functions such as setting objectives, policies,
rules etc. A manager cannot replace an entrepreneur in spite of performing the allotted
duties because a manager has to work as per the guidelines laid down by the
entrepreneur.
 INTRAPRENEURSHIP

Meaning A dictionary meaning to word provides that, “A person within a large

corporation who takes direct responsibility for turning an idea into a profitable
finished product through assertive risk-taking and innovation is an intrapreneur.” It is
derived as INTRA (corporate) + (entre) PRENEUR].
The word intrapreneur is the recently coined corporate counterpart to long existing
term entrepreneur. This coinage is generally attributed to management consultant
Gifford Pinchot, author of the 1985 book entitled Intrapreneuring. Since inception of
this term in the scant number of years, intrapreneur has gained momentum and
currency very rapidly. Intrapreneurship is a combination of entrepreneurship and
management skills. In simple words, Intrapreneurship is the practice of
entrepreneurship by employees within an organization. The trend today is such that
every one who is capable of managing others business is himself indulging in
entrepreneurship. This is resulting in inadequacy of management staff. In the
emergence of this changing pattern, the concept of intrapreneurship
is originated where the intrapreneur (i.e. Manager) is made the head of a given
business unit and asked to manage it for the organization while employing innovative
skills. As an example, when a company seeks for diversification options, they can
appoint one of their managers as an intrapreneur to launch the business venture while
allowing him to share the part of the profits made by the new business venture.
Features of Intrapreneurship An intrapreneur thinks like an entrepreneur looking out
for opportunities, which profits the organization. Intrapreneurship is a novel way of
making organizations more profitable where employees entertain entrepreneurial
thoughts. It is in the interest of an organization to encourage intrapreneurs.
Intrapreneurship is a significant method for companies to reinvent themselves and
improve performance. Managers would do well to take employees who do not appear
entrepreneurial but can turn out to be good intrapreneurial choices. Key
Characteristics of Intrapreneurship – It promotes the managers to be more innovative
and take more responsibility while demonstrating charismatic leadership qualities. –
Intrapreneurship projects are funded by large business organization and agreed
percentage of profits are remitted to the fund provider/head quarters of the business. –
Intrapreneurship will cultivate entrepreneurial skills/culture within the corporate
culture where managers will be motivated to accept more risk. – Due to the backing
from the headquarters, the chances of failure are low when compared to start ups. – It
adds value to the life of the intrapreneur as he is being given the task of being an
entrepreneur while receiving necessary training from headquarters. – Business
portfolio of funding organization will be expanded creating diversification. – Finally,
it creates wealth for the headquarters as well as for the intrapreneur through its profit
sharing agreement. Difference between an Entrepreneur and an Intrapreneur An
entrepreneur takes substantial risk in being the owner and operator of a business with
expectations of financial profit and other rewards that the business may generate. On
the contrary, an intrapreneur is an individual employed by an organization for
remuneration, which is based on the financial success of the unit he is responsible for.
Intrapreneurs share the same traits as entrepreneurs such as conviction, zeal and
insight. As the intrapreneur continues to expresses his ideas vigorously, it will reveal
the gap between the philosophy of the organization and the employee. If the
organization supports him in pursuing his ideas, he succeeds. If not, he is likely to
leave the organization and set up his own business. The words entrepreneur and
intrapreneur have acquired special significance in the content of economic growth in a
rapidly changing industrial climate both in developed and developing countries.
Entrepreneur is a key person who envisages new opportunities, new techniques, new
lines of production, new products and coordinates all other activities. He likes to
experiment with new ideas and thus, face uncertainty. He works for himself and for
profits.
On the other hand, intrapreneurs are entrepreneurs who catch hold of a new idea for
product service or process and work to bring this idea to fruition within the
framework of the organization. Intrapreneurs with their innovations and dedicated
effort are perceived as valuable asset by the organization, inspiring others. They serve
as champions to others in those organizations. In America a number of business
executives have left their jobs and started their own enterprises because they were not
given chance to test and implement their innovative ideas. Later they achieved
phenomenal success in their new venture and posed a threat to the companies they left.
These executives turned entrepreneurs are known as intrapreneur. The Entrepreneur is
typically a visionary who spots an opportunity in the marketplace and has the passion,
guile and contact base to set the wheels in motion. The Intrapreneur has passion and
drive but also has the operational skills of running the “clockwork” of the business to
enable a good idea to be turned into commercial reality. He is the “inside
entrepreneur”. Both “preneurs” set themselves aside from employees in a number of
ways but perhaps the most significant is in their relationship with the business. It’s a
question of commitment over involvement. Employees are involved, “preneurs” are
committed. Not every business needs an Entrepreneur, but every business needs an
Intrapreneur. In the same way that the seed of a business idea needs an Entrepreneur
to shape and cultivate it, so the Entrepreneur needs the Intrapreneur to pluck from his
grasp those seeds of opportunity, convert them in to a viable commercial plan and
then manage that plan to a profitable reality. Without the intrapreneur, ideas
entrepreneurs and small business are doomed to fail.

CREATIVITY

Creativity is marked by the ability to create, bring into existence, to invent into a new
form, to produce through imaginative skill, to make to bring into existence something
new. Creativity is not ability to create out of nothing but the ability to generate new
ideas by combining, changing, or reapplying existing ideas. Every being has a
creative side but is not realized. Creativity is an attitude, the ability to accept change
and newness, a willingness to play with ideas and possibilities, a flexibility of outlook,
the habit of enjoying the good, while looking for ways to improve it. Creativity is also
a process. Creative people work hard to improve ideas and solutions, by making
continuous and gradual alterations and refinements to their works. Creativity requires
passion and commitment. Principles of Creativity People become creative when they
feel motivated primarily by the interest, satisfaction, and challenge of the situation
and not by external pressures; the passion and interest – a person’s internal desire to
do something unique; the person’s sense of challenge, or a drive to prove something
no one else has been able to. Within every individual, creativity is a function of three
components:
 Expertise
 Creative Thinking Skills
 Motivation Expertise
encompasses everything that a person knows and can do in the broad domain of his or
her work knowledge and technical ability. Creative thinking refers to how you
approach problems and solutions- the capacity to put existing ideas together in new
combinations. The skill itself depends quite a bit on personality as well as on how a
person thinks and works. Expertise and creative thinking are the entrepreneur’s raw
materials or natural resources. Motivation is the drive and desire to do something, an
inner passion and interest. When people are intrinsically motivated, they engage in
their work for the challenge and enjoyment of it. Entrepreneurial activity depends on
the process of innovation following creativity, not on creativity alone. INNOVATION
Innovation is the process of bringing the best ideas into reality, which triggers a
creative idea, which generates a series of innovative events. Innovation is the creation
of new value. Innovation is the process that transforms new ideas into new value. No
innovation is possible without creativity. Innovation is the process that combines
ideas and knowledge into new value. Without innovation an enterprise and what it
provides quickly become obsolete. Joseph Schumpeter (1934) believes that the
concept of innovation, described as the use of an invention to create a new
commercial product or service, is the key force in creating new demand and thus, new
wealth. Innovation creates new demand and entrepreneurs bring the innovations to the
market. This destroys the existing markets and creates new ones, which will in turn be
destroyed by even newer products or services. Schumpeter calls, this process,
‘creative destructions’. Principles of Innovation* Innovation requires a fresh way of
looking at things, an understanding of people, and an entrepreneurial willingness to
take risks and to work hard. People involved in innovation are guided by certain
principles of innovation. These vary among different entrepreneurs; organisation;
philosophers; but the basic framework remains the same. Steve Jobs has given 7
principles largely responsible for success through innovation. These are described in
his book, “The Innovation Secrets of Steve Jobs”. Briefly, these principles are as
follows: Principle One Do what you love: Steve Jobs once told a group of employees,
“People with passion can change the world for the better.” Jobs has followed his
heart his entire life and that passion, he says, has made all the difference. It’s very
difficult to come up with new, creative, and novel ideas unless you are passionate
about moving society forward. Principle Two Put a dent in the universe: Passion
fuels the rocket, but vision directs the rocket to its ultimate destination. In 1976, when
Jobs and Steve Wozniak co-founded Apple, Jobs’ vision was to put a computer in the
hands of everyday people. In 1979, Jobs saw an early and crude graphical user
interface being demonstrated at the Xerox research facility in Palo Alto,
California. He knew immediately that the technology would make computers
appealing to “everyday people.” Xerox scientists didn’t realize its potential because
their “vision” was limited. Two people can see the exactly the same thing, but
perceive it differently based on their vision. Principle Three Kick start your
brain: Steve Jobs once said “Creativity is connecting things.” Connecting things
means seeking inspiration from other industries. At various times, Jobs has found
inspiration in a phone book, Zen meditation, visiting India, a food processor at
Macy’s, or The Four Seasons hotel chain. Steve doesn’t “steal” ideas as much as he
uses ideas from other industries to inspire his own creativity. Principle Four Sell
dreams, not products: To Steve Jobs, people who buy Apple products are not
“consumers.” They are people with hopes, dreams and ambitions. He builds products
to help people achieve their dreams. He once said, “some people think you’ve got to
be crazy to buy a Mac, but in that craziness we see genius.” How do you see your
customers? Help them unleash their inner genius and you’ll win over their hearts and
minds. Principle Five Say no to 1,000 things: Steve Jobs once said, “I’m as proud of
what we don’t do as I am of what we do.” He is committed to building products with
simple, uncluttered design. And that commitment extends beyond products. From the
design of the iPod to the iPad, from the packaging of Apple’s products, to the
functionality of the Web site, in Apple’s world, innovation means eliminating the
unnecessary so that the necessary may speak. Principle Six Create insanely great
experiences: The Apple store has become the world’s best retailer by introducing
simple innovations any business can adopt to create deeper, more emotional
connections with their customers. For example, there are no cashiers in an Apple
store. There are experts, consultants, even geniuses, but no cashiers. Why? Because
Apple is not in the business of moving boxes; they are in the business of enriching
lives. Principle Seven Master the message: Steve Jobs is the world’s greatest
corporate storyteller, turning product launches into an art form. You can have the
most innovative idea in the world, but if you can’t get people excited about it, it
doesn’t matter. Simply put, innovation is a new way of doing things which results in
positive change. Innovation is attainable by anyone at any organization, regardless of
title or position. Make innovation a part of your brands’ DNA by thinking differently
about business challenges.

CREATIVITY AND INNOVATION IN AN ENTREPRENEURIAL

ORGANIZATION

Growth and development cannot be sustained without additional innovations.

Additional innovations make firms look glamorous in terms of new products, new
marketing techniques, and newer ways to reach out to customer in satisfying their
needs. These are usually seen as part of the process of innovation, which is itself seen
as the engine driving continued growth and development. The ‘winning performance’
of the entrepreneur and the organization focuses on – Competing on quality, not
prices – Domination of a market niche – Competing in an area of strength – Having
tight financial and operating controls – Frequent product or service innovation
Entrepreneurship is, therefore, the innovatory process involved in the creation of an
economic enterprise based on a new product or service which differs significantly
from products or services offered by other suppliers in content or in the way its
production is organized nor in its marketing. In today’s environment where
competition requires business enterprises to be distinct and meet customer needs with
better or newer products and organization becomes in critical necessity. Thus,
entrepreneurs and enterprises are continuously creative and innovative to remain
relevant to the customers, which is the purpose of every business. This requires to
study the enviornment thoroughly and scan it from the view point of stakeholders and
customers in line with the strengths, oppertunities, threats, etc; so as to bring in the
picture before any entrepreneurial activity is started with.

ENVIRONMENT SCANNING

Environment Scanning is careful monitoring of an organization’s internal and external

environments for detecting early signs of opportunities and threats that may influence
its current and future plans. Environmental scanning is a concept from business
management by which businesses gather information from the environment, to better
achieve a sustainable competitive advantage. To sustain competitive advantage, the
company must also respond to the information gathered from environmental scanning
by altering its strategies and plans when the need arises.
When entrepreneurship is taken into consideration; environment scanning is another
important factor to be taken care of with regards to developing a new plan which
comprises of innovative ideas and creative ends so that the same may be developed
and offered in the market after a careful analysis for its possibility of acceptance,
opportunity in the same, and prospective threats. Importance of Environmental
Scanning Entrepreneurs need to carry out environmental scanning to anticipate and
interpret the results that their business innovation would result in. The term
environmental scanning refers to the screening of large amounts of information in
order to detect emerging trends and to create a set of scenarios. Companies which
scan their business environment are proven to achieve higher profits and revenue
growth compared to companies which do not. The importance of environmental
scanning was first recognized by life insurance firms in the late 1970s. For instance;
at that time, the demand for life insurance was declining, and the insurance firms had
failed to recognize that there was a fundamental change in family structure in the U.S.
Young families in the late 1970s tended to be dual-career couples and they
increasingly prefer to remain childless for a longer period of time. Because the
families were smaller, the demand for life insurance declined. This is one of the
examples as to how scanning of environment is helpful in analyzing the factors for the
behaviour of the entrepreneurial activity conducted. There are various techniques
which may be used in environment scanning namely; – SWOT Analysis – PEST/
PESTEL Analysis – Industry Analysis

DEVELOPING EFFECTIVE BUSINESS PLANS

The process of starting a new venture is embodied in the entrepreneurial process,

which involves more than just problem solving in a typical management position. An
entrepreneur must find, evaluate, and develop an opportunity by overcoming the
forces that resist the creation of something new. The process has four distinct phases:
 Identification And Evaluation Of The Opportunity
 Development Of The Business Plan
 Determination Of The Required Resources
 Management Of The Resulting Enterprise
Identify and Evaluate the Opportunity Opportunity identification and evaluation is a
very difficult task yet very primary. Most good business opportunities do not
suddenly appear, but rather result from an entrepreneur’s alertness to possibilities, or
in some case, the establishment of mechanisms that identify potential opportunities.
For example, one entrepreneur surveys the possibility of developing a new product.
This person is constantly looking for a need and an opportunity to create a better
product. Another entrepreneur may be monitoring the activities or habits of the target
customers, some others may be indulged in experiments of sample product. This is the
way of looking for any unique product niche for a new venture. Although most
entrepreneurs do not have formal mechanisms or identifying business opportunities,
some sources are often fruitful: consumers and business associates, members of the
distribution system, and technical people. Often, consumers are the best source of
ideas for a new venture. Many a times it is observed that consumers know what they
want; they do not know how to produce that. This survey can result in the creation of
new business. One entrepreneur’s evaluation of why so many business executives
were complaining about the lack of good technical writing and word-processing
services resulted in the creation of her own business venture to fill this need. Her
technical writing service grew to 10 employees in two years. Due to their close
contact with the end user, channel members in the distribution system also see product
needs. One entrepreneur started a college bookstore from the observation of all the
students complain about the high cost of books and the lack of service provided by the
only bookstore on campus. Many other entrepreneurs have identified business
opportunities through a discussion with a retailer, wholesaler, or manufacturer’s
representative. Finally, technically oriented individuals often conceptualize business
opportunities when working on other projects. The most famous example is of Steve
Wozniak - Apple Computers Steve got interested in science and technology around
4th grade after reading a book about this young guy who was an engineer who could
design anything, and he owned his own company, and he would entrap aliens, and
build submarines, and have projects all over the world. Steve would later create the
first personal computer in 1977. Jobs had a passionate belief in bringing computer
technology to everyone. So in 1977, Jobs and Wozniak started a company to build and
distribute their invention. In true American-dream fashion, their company began in a
garage. To finance their venture, Jobs sold his Volkswagen van and Wozniak sold his
programmable calculator to raise $1,300. Weeks later, Jobs secured the company’s
first sale: 50 Apple I computers at $666 each. In a mere six years, Apple was listed in
the Fortune 500, becoming the youngest firm on this prestigious list. Whether the
opportunity is identified by using input from consumers, business associates, channel
members, or technical people, each opportunity must be carefully screened and
evaluated. This evaluation of the opportunity is perhaps the most critical element of
the entrepreneurial process, as it allows the entrepreneur to assess whether the specific
product or service has the returns needed compared to the resources required. This
evaluation process involves looking at the length of the opportunity, its real and
perceived value, its risks and returns, its fit with the personal skills and goals of the
entrepreneur, and its uniqueness or differential advantage in its competitive
environment. The market size and the length of the window of opportunity are the
primary basis for determining the risks and rewards. These risks reflect the market,
competition, technology, and amount of capital involved. The amount of capital
needed provides the basis for the return and rewards. The methodology for evaluating
risks and rewards frequently indicates that an opportunity offers neither a financial
nor a personal reward commensurate with the risks involved. Finally, the opportunity
must fit the personal skills and goals of the entrepreneur. It is particularly important
that the entrepreneur be able to put forth the necessary time and effort required to
make the venture succeed. Although many entrepreneurs feel that the desire can be
developed along the venture, typically it does not materialize. An entrepreneur must
believe in the opportunity so much that he or she will make the necessary sacrifices to
develop the opportunity and manage the resulting organization. Opportunity analysis,
or what is frequently called an opportunity assessment plan, is one method for
evaluating an opportunity. It is not a business plan. Compared to a business plan, it
should be shorter; focus on the opportunity, not the entire venture; and provide the
basis for making the decision of whether or not to act on the opportunity. An
opportunity assessment plan includes the following:
 A Description Of The Product Or Service
 An Assessment Of The Opportunity
 An Assessment Of The Entrepreneur And The Team
 Specifications Of All The Activities And Resources Needed To Translate The
Opportunity Into A Viable Business Venture
 The Source Of Capital To Finance The Initial
 Venture As Well As Its Growth

Developing a Business Plan

A good business plan must be developed in order to exploit the defined opportunity.
This is a very time-consuming phase of the entrepreneurial process. An entrepreneur
usually has not prepared a business plan before and does not have the resources
available to do a good job. A good business plan is essential to developing the
opportunity and determining the resources required, obtaining those resources, and
successfully managing the resulting venture. Effective business planning is critical to
an entrepreneurial company’s long-term success and its ability to raise capital and
grow successfully. Business planning is the process of setting goals, explaining the
objectives and then mapping out a document to achieve these goals and objectives. A
well-written Business Plan lays out the best growth path and strategy, as well as the
rationale for the selection of the strategy over other alternatives. In essence, a
Business Plan is the articulation and explanation of why the chosen game plan for
building the company makes sense, what resources it will need to implement the
vision, who will be the appropriate team that will have the skills and leadership to
execute the vision, and what path they will follow to get there. Nobody has a crystal
ball to predict what will work and what won’t, not even a savvy investor or veteran
entrepreneur. The better the analysis, the better the chances that most of the goals set
forth in the business plan will be achieved. It is essentially an articulation of the
entrepreneurial company’s plan for managing the risks and challenges involved in
building or expanding the business. As such, it should acknowledge that growth and
success are moving targets by anticipating as many future events or circumstances
that will affect the company’s objectives. In developing a Business Plan and a
Business Model, entrepreneurs are generally found apprehensive of myths and
misconceptions about the process. These myths need to be aware of and the realities
be known in well before conceiving a wrong plan. Among these the most common are
the following:
1. Business plans are only for start-up companies Reality: Companies at all stages of
development need to prepare Business Plans either for the planning and financing of a
specific project, general expansion financing, mergers or acquisitions, and the overall
improvement of the company’s financial and managerial performance. A company
operating for 15 years or more will need to draft a Business Plan in order to raise the
necessary capital to reach the next stage in its development.
2. Business plans should be as detailed as possible; the longer the plan, the better
chance that the company will be financed Reality: The plan must be concise, well-
written and should focus on the lender’s or investor’s principal areas of concern, and
not be cluttered with lots of exhibits or irrelevant market studies. Investors only look
at relevant details. Although a Business Plan ought to be presented professionally, a
very expensive binder or overly lavish presentation will often demonstrate inefficient
resource management.
3. Business plans should emphasize ideas and concepts, not people Reality: Financiers
and venture capitalists prefer to invest in a company that has great people and only a
good concept, rather than one with a great concept and a weak management team.
4. Only the founding entrepreneur should prepare business plans Reality: this myth
has no grounds since a business plan is as technical aspect as the business itself. Thus
it should be developed by a team of managers within the company and then reviewed
by qualified experts, such as accountants, attorneys and the board of directors.
5. Optimism should prevail over realism Reality: The Business Plan should
demonstrate the enthusiasm of the founders of the company as well as generate
excitement in the reader; however, it should be credible and accurate. Investors will
want to know all of the company’s strengths and its weaknesses. In fact, a realistic
discussion of the company’s problems, along with a reasonable plan for dealing and
mitigating these various risks and challenges, will have a much more positive impact
on the prospective investor. Unrealistic or unsubstantiated financial projections and
budgets will reveal inexperience or lack of attention to detail, or even lead to litigation
by disgruntled investors if there are wide disparities between what was represented
and reality. Determine the Resources Required The resources needed for addressing
the opportunity must also be determined. This process starts with an appraisal of the
entrepreneur’s present resources. Any resources that are critical need to be
differentiated from those that are just helpful. Care must be taken not to underestimate
the amount of variety of resources needed. The downside risks associated with
insufficient or inappropriate resources should also be assessed. An entrepreneur
should strive to maintain as large an ownership position as possible, particularly in the
start-up stage. As the business develops, more funds will probably be needed to
finance the growth of the venture, requiring more ownership to be relinquished.
Alternative suppliers of these resources, along with their needs and desires, need to be
identified. By understanding resource supplier needs, the entrepreneur can structure a
deal that enables the resources to be acquired at the lowest possible cost and the least
loss of control. Manage the Enterprise After resources are acquired, the entrepreneur
must use them to implement the business plan. The operational problems of the
growing enterprise must also be examined. This involves implementing a
management style and structure, as well as determining the key variables for success.
A control system must be established, so that any problem areas can be quickly
identified and resolved. Some entrepreneurs have difficulty managing and growing
the venture they created.

ENTREPRENEURIAL MOTIVATION

Meaning and Concept It is often said that a person cannot win a game that they do not
play. In the context of entrepreneurship, this statement suggests that success depends
on people’s willingness to become entrepreneurs. The pursuit of entrepreneurial
opportunity is an evolutionary process which includes to discover the opportunity,
deciding whether that is a positive one; to pursue resources, and to design the
mechanisms of exploitation. Human motivations influence the decisions related to
entrepreneurship endeavour, and that variance across people in these motivations will
influence who pursues entrepreneurial opportunities, who assembles resources, and
how people undertake the entrepreneurial process. It should be noted that the word
‘motivation’ has its origin in the Latin word ‘movere,’ meaning “to move.”
Psychologically, it means an inner or environmental stimulus to action, forces or the
factors that are responsible for initiation, sustaining behaviour. Motivations may be
diverse, multiple and dynamic. Need of Entrepreneurial Motivation In common
perception, entrepreneurs are after money and they engage in profit making. True,
profit- as understood in terms of the residual income of the owner after meeting all the
expenses incurred on the engagement and utilization of other factors of production-is
the reward of entrepreneurship just as salary is to people in employment and
professional fees is to those in profession. So everybody works for money. But people
certainly don’t work for money alone. After all, money is required not for its own
sake, but for the sake of the needs of the person that it can fulfill. Money, thus, is not
the need as such. It is teleological (to put it more simply, distantly) related to the
internally felt needs (such as need for food) and socially acquired needs (such as
status symbols).This leads to the need of entrepreneurial motivation to achieve that
extra edge over others. Inner push of self motivation is required to achieve that mark.
The motivation is not a package in itself, it is accompanied by various other things
which are as follows:

(i) Self Efficacy: According to Albert Bandura, self-efficacy is “the belief in one’s
capabilities to organize and execute the courses of action required to manage
prospective situations”. In other words, self-efficacy is a person’s belief in his or her
ability to succeed in a particular situation. Virtually all people are known of the goals
to accomplish, and things that need changes in the process.

However, most people also realize that putting these plans into action is not quite so
simple. Bandura and others have found that an individual’s self-efficacy plays a major
role in how goals, tasks, and challenges are approached.
People with a strong sense of self-efficacy:
 View challenging problems as tasks to be mastered.
 Develop deeper interest in the activities in which they participate.
 Form a stronger sense of commitment to their interests and activities.
 Recover quickly from setbacks and disappointments.

People with a weak sense of self-efficacy:

 Avoid challenging tasks.
 Believe that difficult tasks and situations are beyond their capabilities.
 Focus on personal failings and negative outcomes.
 Quickly lose confidence in personal abilities.

(ii) Creativity: In a very simple and straightforward manner, creativity is the ability of
creation, that is the causing of a new thing to exist. A thing that did not exist before
now does. That thing can be anything; maybe a concept like Marginal Utility that
helps to explain previously unexplained phenomena. It could also be a product, like
Champaign, wine that is fermented in a special way. A new advertising campaign is
certainly an act of creation. But things may be created if they are looked at in a
different way. Creativity is also the bringing of these new perspectives. There are
many ways for a creative mind to apply its talents.
 Creating a new product for which the entrepreneur has anticipated future sales.
Improving a product, that is adding or modifying something that makes the
product better according to certain criteria like consumers needs.
 Painting, writing, sculpting.
 Improving a process for manufacturing something, maybe baking a cake at home
or producing a better computer application to avoid popup ads.
 Using the same product to satisfy a different need.
 Inventing new concepts or constructs that help to better explain certain
phenomena, like defining an entrepreneur as a solver of market dis-
equilibrium…or as a smasher of equilibrium in the economy.
 Developing a new statistical formula.
 Interpreting information in a different way.
 And yes, doing business abroad.
Creativity is a most welcomed attribute of a business plan analysis, especially when
explaining the product or service to be marketed in terms of its competitive
advantages. But remember that creativity is also badly needed when analyzing data.
Data remains as data until someone interprets it, then it becomes information with
meaning.

(iii) Risk Taking: The market order tends to generate goods and services to cater to
the demands of the customer. More precisely, individual producers and sellers
produce the goods and services, acting on the basis of their appraisal of the wants of
the customers. If they are correct in their judgement then they will prosper, if not, they
will not attract buyers and they will fail. Within a free market order, entrepreneurs
have to take risks because the last word lies with the potential buyers, the consumers.
Ludwig von Mises pointed out in The Anti-Capitalistic Mentality, Illinios (1972), “In
the market of a capitalistic society the common man is the sovereign consumer whose
buying or abstention from buying ultimately determines what should be produced and
in what quantity and quality”. This involves an element of risk for the entrepreneur
and in return for the risk he demands a reward this is the profit margin. Profits serve
the dual purpose of rewarding the successful entrepreneur (that is, the person who
caters best to the wants of the public) and providing capital to develop the business.
This may take the form of investment in updated plant for increased efficiency and
lower prices, it may involve expansion into new products and new markets, and it
may involve the takeover of less thriving firms in order to put their resources to more
productive use.

(iv) Leadership: Entrepreneurship is a special skill set. Some great entrepreneurs are
not-so-great leaders or managers, but successful leaders need to master some of the
entrepreneurship skill set. There is a “new” word that is thrown around –
Intrapreneurship – to represent the entrepreneurial activities internal to an
organization. The businesses would be better off if leaders learn and adapt a bit of
entrepreneurial focus as a part of being successful and enduring in business.

(v) Entrepreneur Communication: Early stage and start-up businesses have

demanding communication challenges. The entrepreneur must distill a lengthy
business plan and its financial projections into a standard and very brief “elevator
pitch”-the succinct yet complete description of the enterprise and its business model
that can be communicated in the time it takes to ride an elevator to a building’s top
floor.And for its customers, an early-stage business needs a precisely articulated and
easily communicated value proposition, or it won’t generate the revenue and profits to
provide the return that investors expect.
CONCLUSION

Successful entrepreneurs require an edge derived from some combination of a

creative idea and a superior capacity for execution. The entrepreneur’s creativity may
involve an innovation product or a process that changes the existing order. Or
entrepreneur may have a unique insight about the consequence of an external change.
Entrepreneurship is the vehicle that drives creativity and innovation. Innovation
creates new demand and entrepreneurship brings the innovation to the market.
Innovation is the successful development of competitive edge and as such, is the key
to entrepreneurship. Creativity and Innovation are at the heart of the spirit of
enterprise. It means striving to perform activities differently or to perform different
activities to enable the entrepreneur deliver a unique mix of value. Thus the value of
creativity and innovation is to provide a gateway for astute entrepreneurship. This
results in actively searching for opportunities to do new things, to do existing things
in extraordinary ways. Creativity and Innovation therefore, trigger and propel first-
rate entrepreneurship in steering organization activities in whatever new directions are
dictated by market conditions and customer preferences, thereby delighting the
customers to the benefit of the stakeholders. Innovation also means anticipating the
needs of the market, offering additional quality or services, organization efficiently,
mastering details, and keeping cost under control.
BIBLIOGRAPHY

USEFUL BOOKS-
 BHUSHAN, Y.K. 1987, ‘FUNDAMENTALS OF BUSINESS
ORGANISATION & MANAGEMENT
 MUSSELMAN, V.A. J.H. JACKSON, 1985 INTRODUCTION
TO MODERN BUSINESS
 RAMESH, M.S. 1985 PRINCIPLES AND PRACTICE OF
BUSINESS ORGANISATION
 SINGH, B.P., T.N. CHHABRA,1988, BUSINESS
ORGANISATION& MANAGEMENT