UNIT II - ENTREPRENEURAL ENVIRONMENT AND POLICIES

Business Environment - Role of Family and Society - Entrepreneurship Development Training

and Other Support Organisational Services – Central and State Government Industrial Policies
and Regulations - International Business.

Business Environment

The entrepreneurial business environment refers to the external factors that impact the
creation, growth, and success of businesses. These factors can include economic, political,
social, technological, and legal aspects of the business environment. Understanding these
factors is crucial for entrepreneurs looking to start and grow their businesses.

Here are some key aspects of the entrepreneurial business environment:

1. Economic Environment: This includes the overall economic conditions in the market,
such as inflation, interest rates, economic growth, and unemployment rates. These
factors impact the purchasing power of customers, availability of capital, and access to
resources.
2. Political Environment: The political environment refers to the policies, laws, and
regulations set by the government that impact businesses. Entrepreneurs need to be
aware of the legal requirements to start and run a business in a particular country or
region.
3. Social Environment: The social environment includes the cultural norms, values, and
beliefs of a society. It also includes demographics such as age, gender, and income
levels. Understanding the social environment is crucial for businesses looking to target
specific customer segments.
4. Technological Environment: The technological environment refers to the
advancements and innovations in technology that impact businesses. Entrepreneurs
need to stay up to date with new technologies and adapt their businesses to remain
competitive.
5. Legal Environment: The legal environment includes the laws and regulations that
govern businesses. These laws can impact areas such as taxes, intellectual property
rights, and environmental regulations.
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In addition to these factors, the entrepreneurial business environment also includes the
competitive landscape, industry trends, and consumer behavior. Entrepreneurs need to
understand these factors to identify opportunities and make informed decisions.

Overall, the entrepreneurial business environment is complex and constantly evolving.

Entrepreneurs need to stay aware of these factors and adapt their businesses accordingly to
succeed in today's dynamic market.

These factors are beyond the control of the business and include economic, social, legal,
technological, and political factors.

The following are the key characteristics of the business environment:

1. Dynamic nature: The business environment is continuously changing, and businesses

need to adapt to these changes to remain competitive. Changes can be driven by
technology, customer preferences, government policies, economic conditions, and
social factors.
2. Complexity: The business environment is complex, and businesses need to navigate
multiple factors and interrelationships. For example, a change in government policy
may impact the economic conditions, which can affect the market demand for products
or services.
3. Uncertainty: The business environment is unpredictable, and businesses need to
anticipate and plan for multiple scenarios. For example, a sudden change in the price of
raw materials can impact the cost of production and profit margins.
4. Globalization: The business environment is increasingly global, and businesses need
to be aware of the opportunities and challenges of operating in different markets. For
example, businesses need to be aware of cultural differences, regulatory requirements,
and economic conditions in different countries.
5. Interdependence: The business environment is interdependent, and businesses need to
consider the impact of their decisions on other stakeholders, including customers,
employees, suppliers, and the broader community. For example, businesses need to
consider the environmental impact of their operations on the community and the planet.

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 6. Diversity: The business environment is diverse, and businesses need to be aware of the
differences in customers, employees, and stakeholders. For example, businesses need to
be aware of cultural differences, language barriers, and accessibility requirements.
7. Technology-driven: The business environment is driven by technology, and businesses
need to embrace innovation to remain competitive. For example, businesses need to be
aware of the latest technological trends and how they can be leveraged to improve
operations and customer experience.

The advantages and disadvantages of the business environment are as follows:

Advantages:

Opportunities: The business environment provides opportunities for businesses to grow and
expand their operations. For example, changes in technology or government policies can create
new markets and opportunities for businesses.

Competition: The business environment fosters competition, which can drive innovation,
efficiency, and better customer service. Competition also helps to keep prices reasonable for
customers.

Support: The business environment includes various organizations and institutions that
provide support to businesses, such as chambers of commerce, trade associations, and
government agencies. These organizations can provide information, networking opportunities,
and financial assistance to businesses.

Economic growth: A favorable business environment can lead to economic growth and
prosperity, which benefits businesses and the wider community.

Collaboration: The business environment can encourage collaboration between businesses,

which can lead to shared resources, knowledge, and expertise.

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Disadvantages:

1. Regulations: The business environment can be highly regulated, which can create
barriers to entry and increase costs for businesses. Regulations can also limit innovation
and creativity in certain industries.
2. Uncertainty: The business environment can be unpredictable, which can make it
difficult for businesses to plan and make strategic decisions.
3. External shocks: The business environment can be impacted by external factors, such
as natural disasters, political instability, and economic downturns, which can have a
significant impact on businesses.
4. Increased competition: While competition can be a positive aspect of the business
environment, it can also be a disadvantage if businesses are unable to keep up with their
competitors.
5. Dependence: Businesses may become dependent on certain aspects of the business
environment, such as access to raw materials or favorable economic conditions.
Changes in these factors can have a significant impact on businesses.

Role of Family and Society

The role of family and society is crucial for entrepreneurs, as they play a significant role in
shaping their behavior, mindset, and opportunities. Here are some ways in which family and
society impact entrepreneurial business:

1. Socialization: Family and society influence the values, attitudes, and behaviors of
individuals. Entrepreneurs are often influenced by the values and beliefs instilled in
them by their families and the cultural norms and practices of their society. For example,
in some societies, entrepreneurship may not be seen as a desirable career path, while in
others, it may be highly valued.
2. Support Network: Entrepreneurs often rely on their families and social networks for
emotional and financial support. Family and friends can provide entrepreneurs with the
initial capital, advice, and encouragement needed to start and grow their businesses.
3. Access to Resources: Family and society can also provide entrepreneurs with access to
resources such as education, training, and mentorship. Entrepreneurs who come from
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 families with a history of entrepreneurship or have social connections with successful
business owners may have access to valuable knowledge and resources.
4. Reputation and Social Status: In some societies, entrepreneurship is seen as a way to
gain social status and recognition. Entrepreneurs who succeed in their ventures may be
seen as role models and admired for their achievements, which can lead to increased
opportunities and influence.
5. Gender and Cultural Factors: Family and societal norms and expectations can also
impact entrepreneurship. For example, in some cultures, women may face more barriers
to entrepreneurship than men, while in others, family businesses may be more common
and accepted.

In conclusion, family and society play a critical role in shaping the entrepreneurial mindset
and providing the necessary resources and support for entrepreneurs to succeed.
Understanding these factors is crucial for aspiring entrepreneurs looking to start and grow their
businesses.

Characteristics of the role of family and society in entrepreneurial business:

1. Cultural influence: Family and society have a significant impact on an entrepreneur's

cultural norms and values, which can shape their entrepreneurial mindset and behaviors.
For example, in some societies, entrepreneurship may not be seen as a desirable career
path, while in others, it may be highly valued.
2. Access to resources: Family and social networks provide access to resources, including
capital, expertise, and support. For example, entrepreneurs who come from families
with a history of entrepreneurship or have social connections with successful business
owners may have access to valuable knowledge and resources.
3. Gender and cultural norms: Societal norms may create barriers for entrepreneurs who
do not fit traditional gender or cultural roles. For example, in some cultures, women
may face more barriers to entrepreneurship than men, while in others, family businesses
may be more common and accepted.
4. Reputation and social status: Successful entrepreneurship can lead to recognition and
social status within a society, which can create new opportunities for entrepreneurs. For
example, in some societies, entrepreneurship may be seen as a way to gain social status
and recognition.
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Advantages of the role of family and society in entrepreneurial business:

1. Emotional and financial support: Family and social networks can provide emotional
and financial support to entrepreneurs, especially during the early stages of the business.
For example, family members may invest in the business or provide advice and
guidance.
2. Access to resources: Family and social networks can provide access to valuable
resources, including capital, expertise, and mentorship. For example, entrepreneurs may
have access to industry-specific knowledge or connections through family members or
social networks.
3. Social status and recognition: Successful entrepreneurship can lead to social status
and recognition, which can create new opportunities for entrepreneurs. For example,
entrepreneurs who succeed in their ventures may be seen as role models and admired
for their achievements, which can lead to increased opportunities and influence.

Disadvantages of the role of family and society in entrepreneurial business:

1. Cultural constraints: Societal norms and cultural constraints may create barriers for
entrepreneurs who do not fit traditional gender or cultural roles. For example,
entrepreneurs who are women or belong to certain ethnic groups may face
discrimination or lack of access to resources.
2. Dependency: Entrepreneurs who rely heavily on family and social networks may
become overly dependent on these resources and lack independence. For example,
entrepreneurs may feel pressure to conform to family expectations or may struggle to
make decisions independently.
3. Limited perspectives: Entrepreneurs who only draw from family and social networks
may limit their exposure to new ideas and perspectives. For example, entrepreneurs may
be less likely to seek out diverse opinions and experiences, which can limit their growth
and innovation.
4. Family conflicts: Family relationships can become strained when entrepreneurs mix
business with family life, leading to conflicts that can negatively impact the business.
For example, family members may disagree on business decisions or may have conflicts
of interest.

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Entrepreneurship Development Training and Other Support Organisational Services

Entrepreneurship Development Training

Entrepreneurship Development Training is a type of training program that is designed to help

individuals acquire the skills, knowledge, and resources needed to start and grow a successful
business venture. The training typically covers a wide range of topics related to
entrepreneurship, including business planning, market analysis, financing, marketing,
management, and leadership. The objective of entrepreneurship development training is to
prepare individuals to become successful entrepreneurs by providing them with the necessary
tools, techniques, and guidance.

Entrepreneurship development training programs can be offered by a variety of institutions,

including universities, business schools, government agencies, and non-profit organizations.
These programs can take many different forms, such as classroom-based courses, online
courses, workshops, seminars, and mentoring programs. The length and intensity of the
training can also vary depending on the program.

The content of entrepreneurship development training programs can also vary depending on
the audience and the objectives of the program. For example, programs designed for aspiring
entrepreneurs may focus more on the basics of starting a business, such as writing a business
plan, developing a product or service, and finding financing. On the other hand, programs
designed for experienced entrepreneurs may focus more on advanced topics, such as
leadership, strategic planning, and scaling a business.

Entrepreneurship development training typically covers the following topics:

1. Business Planning: This includes creating a business plan, conducting market research,
identifying target customers, and developing a marketing strategy.
2. Financing: This includes understanding the different sources of funding available to
entrepreneurs, such as loans, grants, and investments, and developing a financial plan
for the business.
3. Marketing: This includes developing a brand, creating a marketing strategy, and
utilizing digital marketing tools and techniques.

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 4. Management and Leadership: This includes developing leadership skills, managing
employees, and creating a positive company culture.
5. Legal and Regulatory Issues: This includes understanding the legal and regulatory
requirements for starting and operating a business, such as registering a business and
obtaining necessary licenses and permits.
6. Networking and Collaboration: This includes building a network of contacts and
collaborators, such as mentors, advisors, and business partners.

Overall, entrepreneurship development training is an essential tool for individuals who are
looking to start and grow a successful business venture. By providing individuals with the
necessary skills, knowledge, and resources, these training programs can help entrepreneurs
navigate the challenges of starting and growing a business, increase their chances of success,
and create a positive impact on their communities and the economy as a whole.

Here are some of the key characteristics of entrepreneurship development training:

1. Practical Focus: Entrepreneurship development training is focused on providing

practical, hands-on experience and training that is relevant to the challenges faced by
entrepreneurs in the real world. This means that the training is designed to equip
participants with the skills and knowledge that they will need to start and grow a
business successfully.
2. Experiential Learning: Entrepreneurship development training is often delivered
through experiential learning methods such as case studies, simulations, and role-
playing exercises. This approach helps participants to apply their learning to real-world
situations, develop critical thinking skills, and build confidence in their abilities.
3. Customized Approach: Entrepreneurship development training is often tailored to the
specific needs and interests of the participants. This means that the training is flexible
and can be adapted to suit the individual requirements of the participants.
4. Mentoring and Coaching: Entrepreneurship development training often includes
mentoring and coaching from experienced entrepreneurs, business leaders, and subject
matter experts. This provides participants with the opportunity to receive guidance and

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 support from experts who have already gone through the process of starting and growing
a successful business.
5. Collaborative Learning: Entrepreneurship development training often involves group
work, peer feedback, and collaborative learning activities. This approach helps
participants to develop teamwork skills, build relationships with other entrepreneurs,
and learn from each other's experiences.
6. Emphasis on Innovation: Entrepreneurship development training often emphasizes the
importance of innovation, creativity, and problem-solving in entrepreneurship.
Participants are encouraged to think outside the box and come up with innovative
solutions to the challenges they face.
7. Networking Opportunities: Entrepreneurship development training often provides
participants with networking opportunities with other entrepreneurs, investors, and
business leaders. These connections can be invaluable in helping participants to find
new opportunities, partnerships, and sources of funding.

Here are some of the key advantages and disadvantages of entrepreneurship development
training:

Advantages:

1. Provides practical knowledge and skills: Entrepreneurship development training

provides practical knowledge and skills that are essential for starting and running a
business. Participants learn about business planning, marketing, financing, leadership,
and management, among other topics. This knowledge and skills can help participants
to make better decisions and take effective actions in their businesses.
2. Builds confidence and motivation: Entrepreneurship development training can help
participants to build confidence and motivation in their ability to start and grow a
business. Participants learn from experienced entrepreneurs, receive feedback and
guidance from mentors and coaches, and collaborate with peers. This can boost their
confidence and help them to stay motivated as they face the challenges of
entrepreneurship.

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 3. Creates networking opportunities: Entrepreneurship development training provides
participants with networking opportunities with other entrepreneurs, investors, and
business leaders. These connections can be valuable for finding new opportunities,
partnerships, and sources of funding.
4. Offers resources and support: Entrepreneurship development training programs often
provide participants with access to resources and support services such as incubators,
accelerators, and business development centers. These resources and support can be
crucial for helping participants to launch and grow their businesses.
5. Promotes innovation and creativity: Entrepreneurship development training often
emphasizes the importance of innovation and creativity in entrepreneurship.
Participants learn how to think outside the box and come up with innovative solutions
to business challenges. This can help them to differentiate their businesses from
competitors and create value for their customers.

Disadvantages:

1. Can be costly: Entrepreneurship development training programs can be expensive,

especially those offered by universities and private institutions. This cost may be
prohibitive for some aspiring entrepreneurs, especially those with limited financial
resources.
2. May not be relevant to all businesses: Entrepreneurship development training
programs may not be relevant to all types of businesses. Some programs may focus on
specific industries or types of businesses, which may not be relevant to all participants.
3. May not guarantee success: Entrepreneurship development training programs cannot
guarantee success in entrepreneurship. While the training can provide valuable
knowledge and skills, success in entrepreneurship also depends on a range of other
factors such as market conditions, competition, and timing.
4. Can be time-consuming: Entrepreneurship development training programs can be
time-consuming, especially those that require participants to attend classes or
workshops regularly. This time commitment may be challenging for some aspiring
entrepreneurs who are already juggling multiple responsibilities.
5. May not offer personalized attention: Entrepreneurship development training
programs may not offer personalized attention to all participants. Participants may have
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 different learning styles, needs, and interests, which may not be addressed in a group
training setting.

Other Support Organisational Services

In addition to entrepreneurship development training, there are many other support services
and organizations that are available to help aspiring entrepreneurs start and grow their
businesses. Here are some examples of these services and organizations:

1. Business Incubators: Business incubators are organizations that provide support and
resources to help entrepreneurs launch and grow their businesses. Incubators typically
offer shared office space, access to funding and mentorship, and networking
opportunities. They may also provide training and educational programs for
entrepreneurs.
2. Accelerators: Accelerators are programs that provide intensive, short-term support to
early-stage startups. Accelerators typically offer mentorship, coaching, and access to
funding and networking opportunities. They may also provide training and educational
programs focused on specific industries or business models.
3. Small Business Development Centers (SBDCs): SBDCs are organizations that
provide free or low-cost business consulting and training services to small businesses.
They are typically affiliated with universities or government agencies and offer services
such as business planning, marketing, financing, and management training.
4. Microfinance Institutions: Microfinance institutions are organizations that provide
small loans and other financial services to entrepreneurs and small businesses. They are
often focused on serving low-income or underserved communities and may also provide
training and other support services to help entrepreneurs succeed.
5. Crowdfunding Platforms: Crowdfunding platforms are online platforms that allow
entrepreneurs to raise funds from a large number of people, typically through small
donations or investments. These platforms can be a valuable source of funding for early-
stage startups and may also provide exposure and marketing opportunities.

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 6. Business Associations: Business associations are organizations that represent the
interests of specific industries or groups of businesses. They often provide networking
opportunities, advocacy, and training and education programs for their members.
7. Government Agencies: Government agencies, such as the Small Business
Administration (SBA) in the United States, provide a range of support services and
resources to help entrepreneurs start and grow their businesses. These services may
include training, financing, mentorship, and access to government contracts and other
opportunities.

Overall, there are many different support services and organizations available to help aspiring
entrepreneurs succeed. These services and organizations can provide valuable resources,
training, and mentorship to help entrepreneurs overcome the challenges of starting and
growing a business. Aspiring entrepreneurs should explore the different options available to
them and choose the services and organizations that best fit their needs and goals.

Central and State Government Industrial Policies and Regulations

Central Government Industrial Policies and Regulations:

1. National Manufacturing Policy: The National Manufacturing Policy aims to increase

the share of manufacturing in India's GDP to 25% and create 100 million jobs in the
sector by 2022. It focuses on improving the ease of doing business, attracting
investments, and promoting innovation.
2. Make in India: Make in India is an initiative launched by the Indian government to
encourage foreign and domestic companies to manufacture their products in India. It
aims to create job opportunities, increase manufacturing sector growth, and promote
India as a global manufacturing hub.
3. Industrial Policy Resolution: The Industrial Policy Resolution outlines the broad
contours of the government's industrial policy. The policy emphasizes the role of the
public sector in industrial development, the promotion of small-scale industries, and the
need for technology upgradation and innovation.
4. Foreign Direct Investment (FDI) Policy: The FDI policy regulates foreign investment
in India. The policy outlines the sectors in which FDI is permitted and the limits on
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 foreign investment in different sectors. It also provides guidelines for investment in
different forms, such as joint ventures, wholly-owned subsidiaries, and collaborations.
5. Intellectual Property Rights (IPR) Policy: The IPR policy aims to create an
environment that fosters creativity and innovation in India. The policy outlines the
government's approach to intellectual property rights, including patents, trademarks,
and copyrights.

State Government Industrial Policies and Regulations:

1. Industrial Promotion Policy: State governments have their own industrial promotion
policies, which aim to attract investment, promote industrial growth, and create job
opportunities in their respective states. These policies provide incentives such as tax
breaks, subsidies, and land allotment to companies that invest in the state.
2. Single Window Clearance System: Many state governments have implemented a
single window clearance system for industries. This system aims to simplify the process
of obtaining various licenses, permits, and clearances required to set up and operate a
business in the state.
3. Land Acquisition Policies: Land acquisition policies vary from state to state. These
policies outline the procedures for acquiring land for industrial purposes and the
compensation and rehabilitation measures for those affected by the acquisition.
4. Labour Laws: Labour laws in India are governed by both central and state
governments. State governments have their own labour laws, which regulate various
aspects of employment, such as wages, working conditions, and social security benefits.
5. Environmental Regulations: State governments are responsible for implementing
environmental regulations and ensuring that industries comply with them. These
regulations cover aspects such as air and water pollution, hazardous waste management,
and environmental impact assessments.

International Business

International business refers to the trade of goods and services between countries. It involves
cross-border transactions and operations, including exports and imports, foreign direct

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investment, licensing, franchising, and other types of business activities. Here are some key
aspects of international business:

1. Globalization: The increasing integration of economies, cultures, and societies across

the world has led to the growth of international business. Globalization has made it
easier for businesses to expand into new markets, access new customers and suppliers,
and benefit from economies of scale.
2. Cross-cultural communication: International business requires effective
communication across different cultures and languages. This includes understanding
cultural differences, adapting to local customs and practices, and communicating clearly
and effectively with people from diverse backgrounds.
3. Legal and regulatory environment: International businesses need to comply with the
laws and regulations of different countries. This includes trade agreements, intellectual
property laws, labour laws, and tax regulations.
4. Foreign exchange risk: International businesses are exposed to foreign exchange risk,
which is the risk of loss due to changes in exchange rates. This risk can be managed
through hedging strategies, such as forward contracts, options, and futures.
5. Political and economic risk: International businesses are also exposed to political and
economic risks in different countries, including changes in government policies,
instability, and currency devaluations. These risks can be managed through political risk
insurance and diversification of operations and investments.
6. International trade agreements: International trade agreements, such as the World
Trade Organization (WTO) and regional trade agreements, can facilitate international
trade by reducing barriers to trade and promoting cooperation between countries.
7. Corporate social responsibility: International businesses have a responsibility to act
ethically and responsibly in their operations, including respecting human rights,
protecting the environment, and supporting local communities. This can help build trust
and goodwill with stakeholders and enhance the long-term sustainability of the business.

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