[KHU 802] UNIT 1:

ENTREPRENEURSHIP

Entrepreneur & Entrepreneurship:

 Entrepreneur are innovators who transforms resources into useful goods and services, and thus
contributes in industrial growth.

 Traits/ Entrepreneurial Competencies found in successful Entrepreneurs:

o Highly motivated
o Self confident
o Innovative
o Risk takers and courageous
o Ambitious
o Clear vision and future goals
o Passionate
o Skilled
o Intelligence and high technical knowledge

 Entrepreneurship is an activity of creating something new, raising capital, hiring labors which
ultimately leads in setting up and maintain a profit oriented business unit.

 Features/needs of Entrepreneurship:
o Must be dealing with some creative ideas, which lead to betterment of society.
o Must be goal centric.
o Must be risk bearer.
o Must have skilled focused mindset.
o Must have ability to work with other people

 Scope of Entrepreneurship:
o By creating new product and services, they stimulate large number of employment opportunities,
which ultimately results in acceleration of economic development.

Factors affecting Entrepreneurial Development:

Economic Factors: Non Economic Factors:

o Capitals o Risk Factors
o Labour o Marginality
o Raw Materials o Social Mobility
o Market
McClelland’s Achievement Motivation Theory:

 Motivation is our inner state of our mind that activates and directs our mind to reach at our goals.
 McClelland has identified three basic motivating needs:

 Need for Power (n-pow):

o Power is ability to influence the behavior of others.
o People with “high power needs” seek high level positions in organization, so as to influence and
control over others.

 Need for Affiliation (n-affil):

o People with “high needs for affiliation”, derives pleasure from being loved by all and tend to avoid
pain of being rejected.
o These type of people, like to interact people, and try to maintain the pleasant social relationships.

 Need for Achievement (n-ach):

o There are few people, who have intense desire to achieve.
o These people, usually take moderate risk. This is opposite to belief that achievers take high risk.
o They seek immediate feedback for the work done by them, so as to know their progress towards
the goal..
o They try to be perfectionist towards their assigned work.
o Though they are working for money, but satisfaction in accomplishment of work gives them more
pleasure.

Conceptual Model of Entrepreneurship:

 Kao has developed a conceptual model of entrepreneurship, as represented below:

 Entrepreneurial Personality: The overall success of a new venture largely depends upon the skill, qualities,
traits and determination of the entrepreneur.

 Entrepreneurial Task: It is a role

played by entrepreneur in an
enterprise. The major task of the
entrepreneur is to recognize and
exploit opportunities.

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 Entrepreneurial Environment: It involves the availability of resources, infrastructure, competitive
pressures, rules and regulations, stage of technology etc.

 Organisational Context: It is the immediate setting in which creative and entrepreneurial work takes
place. It involves the organization structure, rules, policies, culture, human resource system,
communication system. 

Intrapreneurs:

 An employee who is given the freedom and funds to create a new product or service within an
organization.

 Critical elements in Intrapreneurial environment:

o Organization must encourage latest technology & innovative ideas
o Encourage experimentation.
o Encourage team work
o Reward system to generate a feel of motivation.

 Difference between Intrapreneur & Entrepreneur:

Entrepreneur Intrapreneur
Have a complete ownership of Have a partial ownership or
business. maybe working as an employee,
Controls financial decisions No control on finance
Bear full risk of the business. Does not bear the risk of business.
Referred as owner of venture Works as a senior executive in
venture.

Classifications of Entrepreneurs:

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Entrepreneurial Development Programme:

 EDP helps to develop entrepreneurial abilities among individuals.

 It helps to develop & polish entrepreneurial skills in an individual.
 Different phases of EDP are discussed below:

 Pre-Training Phase:
o This is an introductory phase in which the entrepreneurship development programme are
launched.
 Training Phase:
o The normal duration of training period is 4-6 weeks and is usually a full time course.
o All aspects of entrepreneurship are discussed in this phase.

 Post-Training Phase:
o In this candidates who have successfully completed their coursework are provided post training
assistance.

Institutions providing Financial & Training Support to Entrepreneurs:

 In India commercial banks provide loans to small entrepreneurs as per guidelines issued by RBI.
 The loan provided could be either secured or unsecured loans.

 DIC (District Industries Centre):

o It provides help to provide technical support services.

 SFC (State Financial Corporation):

o It provide loan to setup SSIs,or for renovation or expansion of SSI.

 SISI (Small Industries Service Institute):

o It prepare designs and layouts of products for SSI.

 NABARD (National Bank for Agriculture and Rural Development):

o It help and provide financial assistance to SSI in rural areas.

 SIDO (Small industries development organization):

o It helps SSI in production and marketing of product and provide consultancy for quality control.

Different types of EDP launched by Government:

 Startup India: It is an initiative by GOI to encourage the culture of startups in the country.
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  Atal Innovation Mission (AIM): AIM’s objective is to develop new programmes and policies for
increasing innovation in different sectors and also help to setup an ecosystem of entrepreneurship in
country.

 National Skill Development Mission: It aims to generate skilled youth by providing them Skill training
activities.

 Pradhan Mantri Kaushal Vikas Yojana: Indian nationals can join skill based training courses and
pursue education free of cost.

Various Problems Faced by EDP:

 No clear policy at national level, which restricts the growth of entrepreneurship culture.
 Poor infrastructural facilities to conduct EDPs successfully.
 Poor faculties with no proper knowledge or experience are hired to conduct EDPs.
 Focused more over theoretical aspects and less over practical exposure to entrepreneurship.

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