BBA TTM (502) MODULE 1

Mysore University

Semester V

Module 1

Introduction:

Today’s entrepreneurs are usually in a tearing hurry to start, grow and scale the highest peaks, all
in a matter of a few years. Therefore, it is only natural that they would be more inclined to tilt
towards ideas that are easy to start, and do not require a huge capital. Rather than investing time
and resources into doing an opportunity plan, they use information that is already and readily
available on the internet.

Most of these ideas are simple applications, aimed at addressing evident, ordinary pain points,
often which, the entrepreneur himself might have faced at some point of time in his life.

Another trend is to indulge in the flavor of the season. Lately, Cleantech is the hottest buzz area;
huge interest is shown in waste management. Everybody has a business of solar lamps and just
everyone is exploring alternate sources of energy. As MentorSquare Mentor suggests, ‘An
Entrepreneur gets his business ideas from his passions, pains and pleasures. 

Today, an entrepreneur goes into business to satisfy a passion or a craving, to fill a void that he
sees in himself or in society. They are keen to start ventures in which they feel a lack of
availability.

There is no dearth of ideas in our country. The Indian market is a growth market and not a
mature efficiency market like the ones in the Western markets.  Thus, entrepreneurs have the
advantage of looking at what has worked in the Western markets and try to adapt it to the Indian
markets. 

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Some are successful while others fail miserably. It is no longer suicide for an entrepreneur to
think of a ‘me too’ idea in today’s world. They are increasingly found to tweak already existent
ideas, give it their personal touch, and its ready to be launched in the market, as their very own!

Young entrepreneurs are not only looking at opportunities within India but also leveraging global
opportunities either for buying, manufacturing or selling. This would invariably lead to them
having to solve major problems which they are unfamiliar with, that will not only create
economic wealth but also social impact. 

More often than not, they get stuck with so many choices and alternatives. There are no
precedents and the challenges of the Indian market are sometimes overwhelming to a first time
entrepreneur. However, they have fewer inhibitions when it comes to implementing their ideas.
They are more willing to jump into the deep end of the pool, knowing the risks associated with
it. 

This is as a mentor puts it, due a change in the business environment that has become more
flexible in recent times. Unlike before the risk of going into business and losing the security of a
job is much lesser. Most feel, if this does not work out, they could easily get another job. 

Today, especially, in technology companies, being a failed entrepreneur is not a stigma but an
asset, since the entrepreneurial journey would have imparted the knowledge about business
which can only be got by the hard knocks that a business owner gets.
This is not to say that most young entrepreneurs are successful.

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Question and answers

Q) Define Entrepreneurship. What are its types?

Entrepreneurship is the process of creating value by bringing together a unique package of

resources to exploit an opportunity. Entrepreneurship is the pursuit of opportunity without
regard to resources currently controlled

There are three foundations of Entrepreneurship:

1. Innovation - the ability to see things in novel ways.

2. Calculated risk taking - the ability to take calculated chances and to embrace failure as a
learning experience.
3. Creativity - the ability to conceive of multiple possible futures and to proactively create the
one you most desire.

The two types of entrepreneurship may be classified as:

1. Opportunity based entrepreneurship — an entrepreneur perceives a business opportunity and

chooses to pursue this as an active career choice.

2. Necessity based entrepreneurship — an entrepreneur is left with no other viable option to earn
a living. It is not the choice but compulsion, which makes him/her choose entrepreneurship as a
career.

Q) Who is an entrepreneur? Give an insight about intraprenuership.

An entrepreneur is a person who organizes and manages a business undertaking, assuming the
risk for the sake of profit.
An entrepreneur:

 Sees an opportunity.

 Makes a plan.

 Starts the business.

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 Manages the business.

 Receives the profits

Intrapreneurship is entrepreneurship practiced by people within established organizations.

For starters, the Intrapreneurs act within the confines of an existing organization. The dictates of
most organizations would be that the Intrapreneurs should ask for permission before attempting
to create a desired future - in practice, the Intrapreneurs is more inclined to act first and ask for
forgiveness than to ask for permission before acting.

The Intrapreneurs is also typically the intra-organizational revolutionary - challenging the status
quo and fighting to change the system from within. This ordinarily creates a certain amount of
organizational friction. A healthy dose of mutual respect is required in order to ensure that such
friction can be positively channeled.

Q) Distinguish between wage employment and self employment?

Basis Wage employment Self employment

Nature Self saturation Self actualization

Scope Limited Unlimited

Tendency Routine Imaginative, creative,

innovative

Earning Fixed Generating, flexible

Satisfaction Through compliance of Through converting ones

rules , procedures creativity into reality

Status Employee Employer

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Q. Explain the functions of entrepreneurs.

Perception of market opportunities: - Entrepreneur is an innovator who sees an

Opportunity in a situation that can yield potential returns to him

Gaining command over scarce resources: - Entrepreneur has to identify and foresee the exact
resources required and gain access to own or use these resources that are required to produce the
goods or render the services of the enterprise

Purchasing inputs: - Entrepreneur has to arrange for the purchase, acquisition or

Procurement of the raw materials, labor, equipment, utilities like power, space etc that are
required to run his enterprise

Marketing the products - Entrepreneur has to find customers or market that is ready to pay for
his products or services

Public Relations and Liasoning with external agencies - This involves working with various
departments of government, other local bodies like authorities of Village or Town local bodies,
banks, tax authorities etc.

Managing Human resources within the enterprise: - Entrepreneur may start the enterprise
with a lean and focused task force consisting of friends, relatives etc. But as the enterprise grows,
he has to plan for engaging a skilled and expert workforce that meets the needs of the growing
organization.

Managing customer and supplier relations - Supply chain management effectively is a key
requirement towards managing the entire business operations successfully. This is because the
Supply chain is a key cost sucker and requires maximum time and effort towards running it.
Supply chain is also the key revenue generating mechanism. Thus it provides maximum returns
to any organization.

Managing Finance - This refers to two main Finance functions: - First, preparing an initial
requirement for funds and secondly to manage constantly the sources and utilization of funds.

Acquiring and overseeing the assembly of the factory - Production decisions may be primary
and ancillary. The Primary decisions relate to the Selection of factory site and layout, types of
products to be produced, R&D, design etc

Managing Production - Ancillary decisions are the day to day running decisions like production
planning, control, maintenance, store keeping, material handling etc.

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Industrial engineering: - The hardware requirements of the production set up in terms if

equipment features, precision, efficiency etc all need to be understood by the entrepreneur and
arranged for.

Upgrading Process and the product - Entrepreneur has to assess the requirements of his
customers and plan for meeting these. This involves changing his service offering according to a
changing market

Introducing new products and production techniques

Q) What are characteristics/features of a successful entrepreneur?

1. They see opportunities where others don't.

2. They have a 'vision', a clear understanding of the concept and of what they're trying to do

3. They persuade others of their vision; they can communicate the concept effectively.

4. They gather resources to make their vision become a reality (money, people, and things).

5. They organize these resources to create a new venture, product or market (leadership, teams).

6. They constantly change/adapt themselves according to the changing demands of the market. .

Q. What are the Phases of Entrepreneurial Process?

Entrepreneurial process or process of new venture formation comprises all the functions, activity
and action which are necessary for developing the new venture. Basically it is a process through
which a new venture is created by an entrepreneur. The entrepreneur must find evaluate and
develop an opportunities by overcoming the forces that resist the creation of something new.

The process has four distinct phases

1) Identify and evaluate the opportunity

2) Develop a business plan

3) Determine the resources required

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4) Manage the enterprise

Fig 1: Entrepreneurial process

Q) What retards Intrapreneurship?

The primary factors retarding Intrapreneurship are:

1) The costs of failure too high and the rewards of success are too low.
Intrapreneurs need to be given the space in which to fail, since failure is an unavoidable aspect
of the Intrapreneurial process. This is not to say that organizations should simply condone
failure, but rather that organizations need to begin to measure and attribute failure to either
Intrapreneurs fault, or circumstances beyond the Intrapreneurs control - and punish and reward
accordingly. Similarly, the rewards for success are usually inadequate - few organizations
provide rewards for Intrapreneurs that even closely approximate the rewards available to the
Entrepreneurial counterparts. Most incentivisation systems need to be upgraded accordingly.

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2) Inertia caused by established systems that no-one is willing to change. Most organizations
are governed by implicit and explicit systems, and in many cases people are reluctant to change
them. Intrapreneurs are met with "this is the way we've always done it around here", "if it isn’t
broken, don't fix it", and "changing it now would just take too much effort..." Many
organizations use their existing systems to prove they already have the "right answer" (see
above), effectively dousing creativity.

3) Hierarchy. Organizational hierarchies are what create the need to ask for permission - the
deeper the hierarchy, that harder it is to get permission for anything new. Hierarchies also tend to
create narrow career paths and myopic thinking, further stifling creativity and innovation. People
lower down in the hierarchy have a tendency to become disempowered through having to ask
permission, eventually developing the "victim mentality" that causes reactivity.

Q: What are the barriers to entrepreneurship?

 Corrupt and unsupportive business environment

 Employee related difficulties
 Severe market entry regulations
 Shortage of funds and resources
 Lack of Entrepreneurship Opportunities
 Lack of Entrepreneurial Capacity
 Lack of Adequate Entrepreneurship Training
 Lack of Appropriate Technical and Practical Skills
 Lack of Market Experience
 Fear of Failure
 Aversion to Risk

Q. How did the concept of Entrepreneurship evolve?

The Evolution of Entrepreneurship

A. Taken from the French “entre prendre,” means “to undertake.”

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B. An entrepreneur is an innovator or developer who recognizes and seizes opportunities;

converts those opportunities into workable/marketable ideas; adds value through time,
effort, money, or skills; assumes the risks of the competitive marketplace to implement
these ideas; and realizes the rewards from these efforts.

C. Characteristics

l. Personal initiative

2. The ability to consolidate resources

3. Management skills

4. A tendency toward autonomy and risk taking

5. Competitive

6. Goal-oriented behavior

7. Aggressiveness

8. Ability to employ human relations skills

D. Historical developments
1. No single definition of entrepreneur exists.

2. Recognition of entrepreneurs dates back to eighteenth-century France.

3. Until 1950, the majority of definitions and references came from economists.

4. Robert C. Ronstadt said, “Entrepreneurship is the dynamic process of creating

incremental wealth.”

5. In present day, the word entrepreneur has become closely linked with free enterprise
and capitalism.

6. Entrepreneurs serve as agents for change, provide creative, innovative ideas for
business enterprise, and help businesses grow and become profitable.

7. Entrepreneurs are considered heroes of free enterprise.

8. Many people regard entrepreneurship as “pioneership” on the frontier of business.

10 Marks Questions (Answer in detail)

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Q. Explain the different types of entrepreneurs.

1.Based on the Type of Business

Trading Entrepreneur: the trading entrepreneur undertake the trading activities. They procure the
finished products from the manufacturers and sell these to the customers directly or through a
retailer.

Manufacturing Entrepreneur :The manufacturing entrepreneurs manufacture products. They

identify the needs of the customers and, then, explore the resources and technology to be used to
manufacture the products to satisfy the customers' needs..

Agricultural Entrepreneur: The entrepreneurs who undertake agricultural pursuits are called
agricultural entrepreneurs.

2. Based on the use of technology

Technical Entrepreneur: The entrepreneurs who establish and run science and technology-based
industries are called 'technical entrepreneurs.'.

Non-Technical Entrepreneur: Based on the use of technology, the entrepreneurs who are not
technical entrepreneurs are non-technical entrepreneurs. They are concerned with the use of
alternative and imitative methods of marketing and distribution strategies to make their business
survive and thrive in the competitive market.

3. Based on ownership

Private Entrepreneur: A private entrepreneur is one who as an individual sets up a business

enterprise. He / she its the sole owner of the enterprise and bears the entire risk involved in it.

State Entrepreneur: When the trading or industrial venture is undertaken by the State or the
Government, it is called 'state entrepreneur/

Joint Entrepreneurs: When a private entrepreneur and the Government jointly run a business
enterprise, it is called 'joint entrepreneurs.'

4. Based on Gender

Men Entrepreneurs: When business enterprises are owned, managed, and controlled by men,
these are called 'men entrepreneurs.'

Women Entrepreneurs: Women entrepreneurs are defined as the enterprises owned and
controlled by a woman or women having a minimum financial interest of 51 per cent of the
capital and giving at least 51 per cent of employment generated in the enterprises to women.

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5.Based on the Size of Enterprise

Small-Scale Entrepreneur: An entrepreneur who has made investment in plant and machinery up
to 1.00 crore is called 'small-scale entrepreneur.'

Medium-Scale Entrepreneur: The entrepreneur who has made investment in plant and machinery
above 1.00 crore but below ? 5.00 crore is called 'medium-scale entrepreneur.'

Large-Scale entrepreneur: The entrepreneur who has made investment in plant and machinery
more than 5.00 crore is called 'large-scale entrepreneur.'

6.Based on Clarence Danhof Classification

Clarence Danhof (1949), on the basis of his study of the American Agriculture, classified
entrepreneurs in the manner that at the initial stage of economic development,

Innovating Entrepreneurs: Innovating entrepreneurs are one who introduce new goods,
inaugurate new method of production, discover new market and reorganize the 'enterprise.

Imitative Entrepreneurs: These are characterized by readiness to adopt successful innovations

inaugurated by innovating entrepreneurs. Imitative . entrepreneurs do not innovate the changes
themselves, they only imitate techniques and technology innovated by others.

Fabian Entrepreneurs: Fabian entrepreneurs are characterized by very great caution and
skepticism in experimenting any change in their enterprises. They imitate only when it becomes
perfectly clear that failure to do so would result in a loss of the relative position in the enterprise.

Drone Entrepreneurs: These are characterized by a refusal to adopt opportunities to make

changes in production formulae even at the cost of severely reduced returns relative to other like
producers. Such entrepreneurs may even suffer from losses but they are not ready to make
changes in their existing production methods.

7. Based on behavior:

Solo Operators: These are the entrepreneurs who essentially work alone and, if needed at all,
employ a few employees.

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Active Partners: Active partners are those entrepreneurs who start/ carry on an enterprise as a
joint venture.. Entrepreneurs who only contribute funds to the enterprise but do not actively
participate in business activity are called simply 'partners'.

Inventors: Such entrepreneurs with their competence and inventiveness invent new products.
Their basic interest lies in research and innovative activities.

Challengers: These are the entrepreneurs who plunge into industry because of the challenges it
presents. When one challenge seems to be met, they begin to look for new challenges.

Buyers: These are those entrepreneurs who do not like to bear much risk. Hence, in order to
reduce risk involved in setting up a new enterprise, they like to buy the ongoing one.

Life-Timers: These entrepreneurs take business as an integral part to their life. Usually, the
family enterprise and businesses which mainly depend on exercise of personal skill fall in this
type/category of entrepreneurs.

Q. What are the social and cultural factors affecting entrepreneurship?

 Overdependence on agriculture
 Caste system
 Educational system
 Joint Family System
 Religious attitudes(material wealth)
 Mindset
 Attitude of the society
 Cultural value
 Recognition by the society
 Family background

Q. What are the other factors affecting entrepreneurship?

 Educational
 Legal
 Infrastructure
 Financial

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 Procedural
 Communicational
 R&D
 Rapid changes

Economic Factors:

 Capital
 Raw materials
 Labor
 Market
 Infrastructure

Non – Economic Factors:

 Lack of overhead facilities

 Risk
 Unavailability of capital
 Non availability of labor & skills

Psychological Factors:

 Need achievement
 Status respect

Q. Explain the concept of achievement motivation. (MU June 2010)

Essential feature of successful entrepreneurship is a high degree of achievement motivation."

Discuss. (MU June 2011)

Need for Achievement is a person's internal desire to do well. The Need for achievement
contributes to entrepreneurial success. Hence there is a need for developing achievement
motivation in order to develop entrepreneurship in an economy.

Features of Achievement Motivation

 It is a person's deep and driving desire to do something important to attain the feelings of
personal accomplishment
 It is a personal disposition to achieve something difficult and bigger.

It is a lateral personal disposition to strive for a particular goal

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For example, Dhirubai Ambani had always set his heart to start a venture of his own. In spite of
limited economic means, he strived to earn some money and learn the functioning of business
through his small time job in a ship in Aden. His first venture was a spice trading concern; he
then entered yarn trade, then set up a Reliance textile mill to convert raw yarn into fabrics and
later ventured into Petrochemicals. All this has been driven by a constant drive to excel ones past
performance.

Need for Achievement (n'ach) has been proposed by David McCllelland as vital quality of an
entrepreneur. McClelland conducted an experiment at Kakinada, Andhra Pradesh using a
Thematic Apperception Test (TAT) to assess the entrepreneurial aptitude. This was part of a
Training for entrepreneurship conducted at SIET, Hyderabad. McClelland also reached the
conclusion that those who attended the Training performed better than those who did not.

(For exam, give more examples of Sunil Mittal, NarayanMurthy (Infosys), Steve Jobs (Apple)
etc)

Characteristics of Entrepreneurs with Achievement Motivation

They like to undertake risks for personal accomplishment

High Levels of Perseverance to attain their goal

Future Oriented

More adaptive and mobile

Do not rest on their achievements, but desire to do more

More creative and innovative

Q) Why is entrepreneur backbone of Indian economy?

Economic development essentially means a process of upward change whereby the real per
capita income of a country increases over a period of time. Entrepreneurship has an important
role to play in the development of a country. It is one of the most important inputs in economic

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development. The number and competence of entrepreneurs affect the economic growth of the
country.

The economic history of the presently advanced countries like USA, Russia and Japan supports
the fact that economic development is the outcome for which entrepreneurship is an inevitable
cause. The crucial and significant role played by the entrepreneurs in the economic development
of advanced countries has made the people of developing and under developed countries
conscious of the importance of entrepreneurship for economic development. It is now a widely
accepted fact that active and enthusiastic entrepreneurs can only explore the potentials of the
countries availability of resources such as labor, capital and technology.

The role of entrepreneurs is not identical in the various economies. Depending on the material
resources, industry climate and responsiveness of the political system, it varies from economy to
economy. The contribution of entrepreneurs may be more in favorable opportunity conditions
than in economies with relatively less favorable opportunity conditions.
Entrepreneurship helps in the process of economic development in the following ways:

1) Employment Generation:

Growing unemployment particularly educated unemployment is the problem of the nation. The
available employment opportunities can cater only 5 to 10 % of the unemployed. Entrepreneurs
generate employment both directly and indirectly. Directly, self-employment as an entrepreneur
and indirectly by starting many industrial units they offer jobs to millions. Thus entrepreneurship
is the best way to fight the evil of unemployment.

2) National Income:

National Income consists of the goods and services produced in the country and imported. The
goods and services produced are for consumption within the country as well as to meet the
demand of exports. The domestic demand increases with increase in population and increase in

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standard of living. The export demand also increases to meet the needs of growing imports due
to various reasons. An increasing number of entrepreneurism is required to meet this increasing
demand for goods and services. Thus entrepreneurship increases the national income.

3) Balanced Regional Development:

The growth of Industry and business leads to a lot of Public benefits like transport facilities,
health, education, entertainment etc. When the industries are concentrated in selected cities,
development gets limited to these cities. A rapid development. When the new entrepreneurism
grow at a faster rate, in view of increasing competition in and around cities, they are forced to set
up their enterprises in the smaller towns away from big cities. This helps in the development of
backward regions.

4) Dispersal of economic power:

Industrial development normally may lead to concentration of economic powers in a few hands.
This concentration of power in a few hands has its own evils in the form of monopolies.
Developing a large number of entrepreneurism helps in dispersing the economic power amongst
the population. Thus it helps in weakening the harmful effects of monopoly.

5) Better standards of living:

Entrepreneur plays a vital role in achieving a higher rate of economic growth. Entrepreneurs are
able to produce goods at lower cost and supply quality goods at lower price to the community
according to their requirements. When the price of the commodities decreases the consumers get
the power to buy more goods for their satisfaction. In this way they can increase the standard of
living of the people.

6) Creating innovation:

An entrepreneur is a person who always looks for changes. Apart from combining the factors of

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production, he also introduces new ideas and new combination of factors. He always tries to
introduce newer and newer technique of production of goods and services. An entrepreneur
brings economic development through innovation.

Entrepreneurship also helps in increasing productivity and capital formation of a nation. In short,
the development of the entrepreneurship is inevitable in the economic development of the
country. The Role played by the entrepreneurship development can be expressed in the following
words:

" Economic development is the effect for which entrepreneurship is a cause”

Q. Explain the plight of Institutional support in India. What are institutes involved in
supporting entrepreneurs.

Finance has been an important source to start & run an enterprise because it facilitates the
entrepreneurs to procure land, labor, material, and machine.

Hence finance is considered to be the life blood of an enterprise

Recognizing that, the Government through her financial institutions & nationalized banks has
come forward to support the entrepreneurs:

1. NSIC

2. SIDO

3. SSIB

4. SSID

5. SISI

6. DIC

NSIC

 National Small Industries Corporation Ltd (NSIC)

 ISO 9000

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 1955
 Promote, aid & foster the growth of small scale industries
 Operations in Dubai & Johannesburg

Areas of focus:

 Modernization
 Up gradation of technology
 Quality consciousness
 Strengthening linkages
 Enhances export projects

Functions:

 Machinery on hire purchase scheme

 Equipment leasing
 Export marketing for products
 Construction of industrial estates

Marketing Support:

 Consortia & Tender Marketing

 Single Point Registration for Government purchase
 Exhibitions & technology fairs
 Buyer seller meets
 Export of products- projects

Credit Support:

 Equipment Financing
 Tie up with commercial banks
 Procurement of raw materials
 Financing of marketing activities
 Performance & credit rating scheme for small industries

Technology Support:

 Application of new techniques

 Material testing facilities through accredited laboratories
 Product design (cad)
 Practical training

Small Industries Development Corporation (SIDO)

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Apex body for formulating, coordinating and monitoring the policies & programs of SSI (small
scale industries)

Functions:

 Coordination
 Industrial Development
 Extension

All small-scale industries except those falling within the specialized boards and agencies like
Khadi and Village Industries (KVIC), Coir Boards, Central Silk Board, etc, fall under the
purview of the SIDO.

The main functions performed by the SIDO in each of its three categories of functions are:

 Functions Relating to Co-ordination

 To evolve a national policy for the development of small-scale industries,
 To co-ordinate the policies and programs of various State Governments,
 To maintain a proper liaison with the related Central Ministries, Planning Commission,
State Governments, Financial Institutions etc., and
 To co-ordinate the programs for the development of industrial estates.

Functions Relating to Industrial Development

 To reserve items for production by small-scale industries,

 To collect data on consumer items imported and then, encourage the setting of industrial
units to produce these items by giving coordinated assistance,
 To render required support for the development of ancillary units, and
 To encourage small-scale industries to actively participate in Government Stores
Purchase Program by giving them necessary guidance, market advice, and assistance.

Function Relating to Extension

 To make provision to technical services for improving technical process, production

planning, selecting appropriate machinery, and preparing factory lay-out and design,
 To provide consultancy and training services to strengthen the competitive ability of
small-scale industries,

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SSIB

The Government of India constituted Small-Scale Industries Board (SSIB) in 1954

 To advice on development of small-scale industries in the country.

 The SSIB is also known as Central Small Industries Board.
 The Industries Minister of the Government of India is the Chairman of the SSIB.

The SSIB comprises of 50 members including State Industry Minister, some Members of
Parliament, and Secretaries of various Departments of Government of India, financial
institutions, public sector undertakings, industry associations, and eminent experts in the field.

SSID

State Small Industries Development Corporation

To cater to the primary developmental needs of the small, tiny and village industries in the
State/Union Territories under their jurisdiction.

The important functions performed by the SSIDs include:

 To procure and distribute scarce raw materials

 To supply machinery on hire purchase system.
 To provide assistance for marketing of the products of small-scale industries.
 To construct industrial estates /sheds, providing allied infrastructure facilities and their
maintenance.
 To extend seed capital assistance on behalf of the State Government concerned.

SISI

Small Industries Service Institutes

 To provide consultancy & training to small entrepreneurs - both existing and prospective
 The activities of SISIs are co-coordinated by the Industrial Management Training
Division of the DCSSI's office.
 There are 28 SISIs and 30 branches SISIs set up in State capitals and other places all over
the country
 The main functions of SISIs include:
 To serve as interface between Central and State Governments.
 To render technical support services.

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 To conduct Entrepreneurship Development Programs.

 To initiate promotional programs.
 The SISIs also render assistance in the following areas:
 Economic Consultancy /Information /EDP Consultancy.
 Project profiles.

DIC

 District Industries Centre

 MAY 8, 1978
 Integrated development at district level

Functions:

 To conduct industrial potential surveys.

 To prepare techno-economic surveys.
 To prepare an action plan to effectively implement the schemes identified.
 To guide entrepreneurs in matters relating to selecting the most appropriate machinery
and equipment, sources of its supply and procedures for procuring imported machinery, if
needed, assessing requirements for raw materials etc.
 To appraise the worthiness of the various proposals received from entrepreneurs.
 To assist the entrepreneurs in marketing their products.
 To conduct artisan training programs.
 To function as the technical arms of DRDA in administering IRDPs and TRYSEM
programs.

Industrial Estate:

 A place where the required facilities & factory accommodation are provided by the
government to the entrepreneurs to establish their industries there
 To decentralize industrial activity to the rural areas

Objectives of Industrial Estates

 The main objectives of the establishment of industrial estates are to:

 Provide infrastructure and accommodation facilities to the entrepreneurs;
 Encourage the development of small-scale industries in the country;
 Decentralize industries to the rural and backward areas;
 Encourage ancillarisation in surroundings of major industrial units; and
 Develop entrepreneurship by creating a congenial climate to run the industries in these
estates/area /township, etc.

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TCO (Technical Consultancy Organization)

 To prepare project profiles & feasibility profiles

 To undertake industry potential surveys
 To identify potential entrepreneurs
 To offer merchant banking services

Q. Explain with example how educational institution in India promoting entrepreneurship

 The Centre for Innovation, Incubation and Entrepreneurship (CIIE) at IIM Ahmadabad
aims at fostering innovation-driven entrepreneurship through incubation, research and
dissemination of knowledge.
 CIIE was setup by IIM Ahmadabad in 2001 and is supported by the Government of
Gujarat and the Department of Science and Technology, Government of India.
 Since its inception, a host of organizations, professionals, academicians and networking
partners within India and across the globe have been closely associated with the
initiatives of CIIE.
 Some of the ongoing projects are also being backed by the Wadhwani Foundation (set up
by an IT entrepreneur in Silicon Valley, USA), Ministry of New and Renewable Energy
(GoI), Piramal Foundation and Microsoft.

Ongoing programs at CIIE include:

 Accelerator: A summer start-up camp for young IT professionals, students or web-

developers with entrepreneurial ambitions.
 Anveshan: A unique annual event held by CIIE.
 Anveshan is a nationwide proactive search by CIIE for hi-tech and high impact
innovators in public, private and informal sectors.

Selected innovators are invited to avail of CIIE's incubation facilities and become commercially
viable

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Q. What is Kakinada experiment?

A well-known behavioral scientist David McClelland at Harvard University made an interesting

investigation into why certain societies displayed great creative powers at particular periods of
their history.

He found that ‘the need for achievement’ was the answer.

It was the ‘need to achieve’ that motivated people to work hard and moneymaking was
incidental.

Money was only a measure of achievement, not its core motivation

 McClelland conducted a five-year experimental study in one of the prosperous districts of

Andhra Pradesh in India in collaboration with the Small Industries Extension and
Training Institute (SIET) at Hyderabad.
 This experiment is popularly known as the ‘Kakinada Experiment
 It was the Kakinada Experiment that made people appreciate the need for entrepreneurial
training (now popularly known as EDPs) to induce motivation and competence among
young prospective entrepreneurs.
 Based on this realization, India embarked in 1971 on a massive program of
entrepreneurship development.
 At present, some 700 all India and state level institutions conduct EDPs (entrepreneurial
development programs).
 This model is followed in other countries too, such as the ‘Junior Achievement’ program
in USA and ‘Young Enterprises’ in UK

 Under this experiment, young persons were selected and put through a three-month
training program and motivated to see fresh goals.

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 One of the significant conclusions of the experiment was that the traditional beliefs did
not seem to inhibit an entrepreneur and that suitable training can provide the necessary
motivation to entrepreneurs.
 The Kakinada experiment was conducted in a small town of Kakinada, Andhra Pradesh,
having high literacy rate and modest industrial infrastructure.
 The Experiment: Objective was to break the barrier of “limited aspiration” by inducing
achievement motivation.
 Program was designed to stimulate imagination and encourage introspection into personal
motivation and community goals.

RESULT OF EXPERIMENT:

 Those exposed to the experiment showed more positive business behavior.

 Caste, traditional beliefs or western way of life did not have an effect on the mental
makeup of the individual.
 The training helped those who had an yearning to do something or had the opportunity to
do so in their business framework.
 It was realized that entrepreneurship should be developed from a very young age.
 The Kakinada experiment led to some successful experiments like the Gujarat Plan or the
one executed by the Ford Foundation.
 Explain the role of universities and colleges (10m) OR Discuss the role of universities
and colleges in the entrepreneurial development.

Q: Explain the role of Universities and colleges in entrepreneurship.

 The universities provide various theories about the entrepreneurship and the role of
entrepreneurship in economic development of a country.
 The universities and colleges help to identify the personal motivations, attitudes,
qualities, competencies and characteristics usually associated with successful
entrepreneurs,
 Universities help to develop achievement-oriented, planning-oriented and power-oriented
entrepreneurial competencies among the students.
 Universities provide the psychological profile of the successful entrepreneurs to make the
students feel for their motive.
 They provide clear concept on the role, responsibilities, risks and rewards of an
entrepreneur.

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 They make the students to perform the self-assessment,

 They teach the students to take risks, seek opportunities,
 They help bring out high quality and efficient entrepreneurs by providing proper training
and support to them.
 They educate about how to collect and analyze the information
 They create self-confidence among the students,
 Universities provide post-training entrepreneurial self-assessment tasks.
 They help the students to plan and monitor in a systematic way.

Example: CIIE at IIM Ahmadabad

Q. What is CSIR?

 The country's largest laboratory cluster - the Council of Scientific & Industrial Research
(CSIR), with 38 labs across the country
 CSIR, India is one of the world's largest publicly funded research and development
organizations
 Comprising 38 laboratories and more than 4000 research scientists spread across India
and focusing on a variety of disciplines and industries.
 An autonomous body, was constituted in 1942 by a resolution of the Central Legislative
Assembly
 A new entity for driving innovation and scientific entrepreneurship in India

Objective:

 CSIR was built with the objective of helping the country and local industries
 Help Medium Small & Micro Enterprises (MSME),
 CSIR is ready to undertake commercially-oriented research and plans to incubate and
spin-off companies.
 Motto- "We are moving beyond Bharat Sarkar

Q. What are business incubators?

Business incubators are programs designed to support the successful development of

entrepreneurial companies through an array of business support resources and services,
developed and orchestrated by incubator management

 Incubators are Organizations that support the entrepreneurial process

 Incubators Helps to increase the survival rate of innovative startup companies
 Entrepreneurs are Selected & admitted by incubator organizations
 Incubators provide Specialized support
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 Access to money(sources of finance)

 Knowledge & expertise
 People & idea
 Market access
 Network access
 Technical support

Two types of incubators:

 Public
 Private

 Incubators vary in the way they deliver their services, in their organizational structure,
and in the types of clients they serve.
 Successful completion of a business incubation program increases the likelihood that a
startup company will stay in business for the long term.
 Studies found 87% of incubator graduates stayed in business
 It is an entity which helps our start up businesses with all the necessary resources/
support that a start up needs to evolve & mature into a business

Q. What are the services offered by incubator services?

 Help with business basics

 Networking activities
 Marketing assistance
 High-speed Internet access
 Help with accounting/financial management
 Access to bank loans, loan funds and guarantee programs
 Help with presentation skills
 Links to higher education resources
 Links to strategic partners
 Comprehensive business training programs
 Advisory boards and mentors
 Management team identification
 Help with business etiquette
 Technology commercialization assistance
 Help with regulatory compliance
 Intellectual property management
 Creating jobs and wealth
 Fostering a community's entrepreneurial climate

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 Technology commercialization
 Diversifying local economies
 Building or accelerating growth of local industry clusters
 Business creation and retention
 Encouraging women or minority entrepreneurship
 Identifying potential spin-in or spin-out business opportunities
 Community revitalization

CASE STUDY -

SHAHNAZ HUSSAIN:

The case discusses the growth of the Shahnaz Hussain Group, one of the largest producers of
Ayurvedic and herbal products in the world. It begins with a personal profile of Shahnaz
Hussain and her idea of producing and marketing Ayurvedic products as a substitute for
chemical cosmetics, which, she believes, do more harm than good. It then traces the growth of
her brand from a niche product in the Indian market to a brand retailed in most of the major
stores around the world. The case focuses on the factors that make Shahnaz Hussain products
what they are and examines Shahnaz's business style. It also takes a look at the subsidiary and
ancillary activities of the Group, like training institutes, Ayurvedic massage centers and health
resorts

The Making of an Entrepreneur

Shahnaz Hussain belongs to a royal Muslim family which migrated from Samarkhand to
India and later held high positions in the princely kingdoms of Bhopal and Hyderabad before

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India's independence. Shahnaz received her schooling in an Irish convent and because of the
influence of her father, Chief Justice N.U. Beg, she developed a love for poetry and English
Literature. She, thus, had the advantage of growing up in a traditional family and receiving a
modern education. She was married at the age of 15 and was a mother by the next year. When
her husband was posted in Teheran, Iran, she developed an interest in beauty treatments and
decided to study cosmetology.
To support the expenses of the training financially, she wrote articles for the Iran Tribune on
various topics under different names. In the course of her studies, she learnt of the harmful
effects of chemicals on the human body.
Consequently, she turned her attention to Ayurveda, which she believed was the ideal
alternative to chemical cosmetics, which not only harmed the human system but also led to the
deterioration of the environment in the long run.
After leaving Teheran, she trained extensively in cosmetic therapy for 10 years in some of the
leading institutes of London, Paris, New York and Copenhagen. On her return to India in 1977
she set up her own salon at her house in Delhi with an initial investment of? 35000. In contrast
to salons offering chemical treatments, Shahnaz offered Ayurvedic products.

Entrepreneurship - The Shahnaz Hussain Way

Shahnaz Hussain uses the Ayurvedic method of treatment, which uses natural formulations
to cure ailments. She is the pioneer and leader of Ayurvedic beauty products in the world
offering "Natural Care and Cure". The Shahnaz Hussain Group offers exclusive salon
treatments geared to individual needs as well as a number of commercial formulations for the
treatment of specific problems like acne, pimples, pigmentation, dehydration, alopecia (hair
loss), etc.
According to the Group, Ayurvedic products are well suited to human skin and hair as they
are non-toxic and have no harmful side effects. The human body adapts well to the natural
treatments of Ayurveda while it has an inbuilt resistance toward chemical treatments.

The Turning Point

The turning point in her business came when she represented India at the Festival of India in

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1980. Her team was given a counter in the perfumery section of Selfridges in London. She
managed to sell her entire consignment in 3 days and also broke the store's record for cosmetics
sales for the year.

Diversification

The Group has diversified into Ayurvedic centers for Panchkarma, Dhara and Kerala
massage. It has also set up two Shahnaz Husain Ayurvedic Health Resorts, one near Delhi and
another in collaboration with the Hyakumata group of Japan in the US Island of Saipan. These
resorts which can accommodate about 200 people at a time, aim at providing urbanites
treatments and programs designed to counteract the stress of modern life. The Group has also
been holding discussions with major five star hotels in New Delhi and New York to set up health
spas...

Training Future Entrepreneurs

Seeing the need for internationally recognized institutes that offered professional training in
beauty, Shahnaz Husain set up Woman's World International. This was started at a time when
people who wanted to train in beauty treatments and therapy could only get apprenticeship
training...

Lessons on Entrepreneurship

Shahnaz Hussain has acquired worldwide recognition. Her dedication and relentless hard
work have paid off and she heads a Group which is the largest of its kind in the world. "It is
important to have a dream and to believe in the magic of your dreams" says Shahnaz, who has
been able to convert her own dream into a business worth millions of dollars. Shahnaz believes
that a true entrepreneur is a person who has independence of spirit. "One should be innovative,
dynamic and willing to try every avenue towards success"...

QUESTIONS:

1. What drove Shahnaz Hussain to become an entrepreneur?

2. Delineate the entrepreneurial journey of Shahnaz Hussain.

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3. Bring out the lessons for prospective entrepreneurs based on Shahnaz Hussain's
entrepreneurial experience

FAQS
Entrepreneur: an entrepreneur is a person who organizes and manages a business
undertaking, assuming the risk for the sake of profit.

Intrapreneur: Intrapreneurship is entrepreneurship practiced by people within established

organizations.

Self employed: these individuals are professionals who are not employees to any organization
however work as freelancers or consultants

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