UNIT – I

ENTREPRENEURIAL COMPETENCE
Introduction:
 “The way to get started is to quit talking and begin doing.”
Walt Disney co-founder of the
Walt Disney Company
 "A person who never made a mistake never tried
anything new. “Albert Einstein, Physicist
 I’m convinced that about half of what separates the
successful entrepreneurs from the non-successful ones
is pure perseverance.” – Steve Jobs, co-founder and CEO
of Apple.

Who Are Entrepreneurs?

 The word „Entrepreneur‟ has been taken from the
French word. It means Between Takers.
 Entrepreneur is another name of Risk Taker.
 An entrepreneur is an individual who takes moderate
risks and brings innovation.
 Entrepreneur is a person who organises/ manages the
risks in his/her enterprise.
 “Entrepreneur is an individual who takes risks and starts
something new
Definition:
 According to the Economist, J. B. Say, “Entrepreneur
is an Economic agent who unites all the means of
production, i.e., land, labour and capital”
 An entrepreneur is an individual who takes
moderate risks and brings innovation.
 An entrepreneur is a person who has possession of
a new enterprise, venture or idea and assumes
significant accountability for the inherent risks and
the outcome
 Entrepreneur is an innovator and develops untried
technology. -Joseph A. Schumpeter (Austrian-born
American Economist and Political Scientist)
 An agent who buys factors of production at certain
prices in order to combine them into a product
with a view to selling it at uncertain prices in future.
-Richard Cantillon (Irish-French Economist)

Intrapreneur:
Concept:
  A manager within a company who promotes
innovative product development and
marketing.
 An Intrapreneur is someone who has an
entrepreneurial streak but chooses to align
his or her talents with a large organization in
place of creating his or her own.
 An Intrapreneur is an inside entrepreneur, or
an entrepreneur within a large firm, who uses
entrepreneurial skills without incurring the
risks associated with those activities.
 Definition:
 Intrapreneur is an entrepreneur within an
already established organization. -Gifford
Pinchot
(American Forester and
Politician)
Entrepreneur Vs. Intrapreneur
BASIS Entrepreneur Intrapreneur
Dependency An entrepreneur is An Intrapreneur is
independent in his dependent on the
operations.
 Entrepreneur. i.e., th
Owner
Raising of Funds An entrepreneur Funds are not raised
himself raises funds the Intrapreneur.
required for the
enterprise.
Risk An entrepreneur bears An Intrapreneur doe
the risk involved in the not fully bear the ris
business. involved in the
enterprise.
Operation An entrepreneur An Intrapreneur
operates from out-side operates from within
the Organization. the Organization itse

Entrepreneur Vs. Manager

Bases of Difference Entrepreneur Manager

Motive To start a venture. To render his / her serv

in an enterprise.
Status Owner of the Enterprise. Employee in the
Enterprise.
Risk Bearing Assumes all risk and Does not bear any risk.
uncertainty.
Rewards Profit – Highly Uncertain. Salary – Fixed and
Certain.
Innovation Innovator – Change Translates Entrepreneu
Agent. ideas into practice.

Qualifications High Achievement Sound knowledge in

Motive, Originality in Management Theory a
Thinking, Foresight, Risk – Practices.
Bearing Ability, and so on.

Essential attitudes of an entrepreneur

 Have passion for the business
 Set an example of trustworthiness
 Be flexible, except with core values
 Don't let fear of failure hold one back
 Make timely decisions
 The major company asset is oneself
 Keep one’s ego under control
 Believe in oneself
 Encourage and accept criticism graciously
 Admitting one’s mistakes
  Maintain a strong work ethic
 Rebound quickly from setbacks
 Periodically getting out of one’s comfort zone
to pursue something important

Characteristics of Successful Entrepreneurs

 Be passionate about achieving their goals
 Have a spirit of adventure (in fact, the word "adventure"
is derived from the Latin word meaning "to venture")
 Have a strong need to achieve and seek personal
accomplishment
 Be self-confident and self-reliant
 Be goal-oriented
 Be innovative, creative, and versatile
 Be persistent
 Be hardworking and energetic
 Have a positive attitude
 Be willing to take initiative
 Have a strong sense of commitment
 An eye for opportunity: Many entrepreneurs starts by
finding a need and quickly satisfying it.
 Independence: Even though most entrepreneurs know
how to work within the framework for the sake of
profits, they enjoy being their own boss.
 An appetite for hard work: Most entrepreneurs starts
out working long, hard hours with little pay.
 Self-confidence: Entrepreneurs must demonstrate
extreme self-confidence in order to cope with all the
risks of operating their own business.
 Discipline: Successful entrepreneurs resist the
temptation to do what is unimportant or the easiest but
have the ability to think through to what is the most
essential.
 Judgment: Successful entrepreneurs have the ability to
think quickly and make a wise decision.
 Ability to accept change: Change occurs frequently when
you own your own business, the entrepreneur thrives
on changes and their businesses grow.
 Make stress work for them: On the roller coaster to
business success the entrepreneur often copes by
focusing on the end result and not the process of getting
there.
Need to achieve: Although they keep an "eye" on profits,
this is often secondary to the drive toward personal success
Entrepreneurship as a Career
 Entrepreneurship is important for two reasons.
 One, it furthers innovation to find new solutions to
existing and emerging demands.
 Two, it offers far greater opportunities for wealth
creation for self and the society than anything else.
 What leads a person to take up entrepreneurship as a
career option?
 There can be a number of reasons including
displacement from a job, frustration in the present job,
not getting a job of his/her choice, etc.
 Sometimes a person realises much in advance that
his/her job is in jeopardy, as the organisation is moving
towards closure.
 At times a deserving employee getting superseded in
promotion is compelled to quit the job and look for
doing something on his own. Some people object to a
system wherein reward is often based on seniority
rather than merit.
 They proposed two closely-related explanations of
entrepreneurial motivation, the “push” and the “pull”
theory. The “push” theory argues that individuals are
pushed into entrepreneurship by negative external
forces, such as job dissatisfaction, difficulty in finding
employment, insufficient salary, or inflexible work
schedule. The “pull” theory contends that individuals
 are attracted into entrepreneurial activities seeking
independence, self-fulfilment, wealth, and another
desirable outcome
 Some of the prominent pull factors that attract
individuals towards entrepreneurship as a career option
is: High Need for Independence: There are personalities
who would like to have freedom about: with whom to
work, when to work, with whom to do business at what
terms etc. It is this instinct in them that pushes such
personalities to start something of their own.
 To satisfy the dream of having high Financial Rewards:
To satisfy the need to derive high financial rewards as an
outcome of efforts leads some to start a business of
their own. The fundamental difference between job and
own venture lies in the degree of financial rewards for
the efforts put in to achieve organizational goals.
 Opportunity to deal with all aspects of a business: No
job can provide an opportunity to learn and deal
effectively with a wide spectrum of business activities
starting from idea generation, conceptualization, design,
creation, marketing to customer response and customer
satisfaction.
 Vision to leave a long-lasting mark: Entrepreneurship
creates an opportunity to make definite contribution to
the society by lifting the people in and around the
venture. A continuous zeal to innovate helps in touching
the heads and hearts of people at large.
  A strong urge from within to start a business, combined
with workable innovative ideas, careful planning, and
hard work can lead to a very engaging, self-satisfying,
enjoyable and profitable endeavour. The greatest
contributory factor to entrepreneurship is an intention
i.e., a strong purpose in life coupled with determination
to produce desired results.
Theories of entrepreneurship
Economic theory
1)Schumpeter Theory of innovation
• According to Joseph A. Schumpeter, the effective
function of an entrepreneur is to start innovation in
venture. It is creative that disrupts routine or circular
flow of economy and initiates development According to
this theory, the entrepreneurs emerges because of
individuals having certain psychological elements i.e.,
will power, self-intuitions, tolerance capacity. The
entrepreneur is a person who has creative nature.
• He regarded the entrepreneurship as a catalyst who
checks the static conditions of the economy, there by
initiates and thrusts a process of economic development
i.e., innovation. He carries economy to new height of
development.
This innovation includes:
• 1. Introduction of new goods,
• 2. Introduction of new methods of production,
 • 3. Opening of a new market,
• 4. Discovering a new source of raw materials,
• 5. Carrying out a new source of an organisation.
Leibenstein’s Theory (Emphasis on X-Efficiency):
• It is degree of inefficiency on the use of resources within
firm .
• It measures the extent to which firm fails to realise the
productive potential
• It arises as the firms resources are used in wrong way or
not at all
• Use of all resources
Papanek and harris theory of entrepreneurship
• Economic incentives are the major factor that motivate
to take entrepreneur
• There is link between persons inner urge and economic
gain .the inner urge couples with economic benefits lead
to development
Harvard school theory
• According to the Harvard School (Cole, 1949)
entrepreneurship comprises any purposeful activity that
initiate, maintain or develop a profit-oriented business
in interaction with internal situation of the business or
external
• Internal are skill knowledge experience
• External are economic social cultural legal
Kirzners theory of adjustment
• Kirzner, the noted economist, has coined the theory of
adjustment of price. According to him, the essential
entrepreneurial element is the alertness to information
rather than its possession alone. He contends that those
entrepreneurs who have the superior telescopic faculty
keep themselves all the while alert to confront any
disequilibrium in the market.
McClelland's theory of achievement motivation
• McClelland's Human Motivation Theory states that
every person has one of three main driving motivators:
the needs for achievement, affiliation, or power.
• Achievers like to solve problems and achieve goals.
Those with a strong need for affiliation don't like to
stand out or take risk, and they value relationships
above anything else. Those with a strong power
motivator like to control others and be in charge.
Knights theory of profit
• he Knight’s Theory of Profit was proposed by Frank. H.
Knight, group of persons who bears risk . Simply, profit
is the residual return to the entrepreneur for bearing
the uncertainty in business.
Sociological theories
• 1) theory of entrepreneurial supply - Cochran he has
formulated a sociological theory of entrepreneurial
supply. The key elements in his system are cultural
values, role expectations, and social sanctions.
Entrepreneurs are not viewed as being supernormal
individuals, but rather as representing society's modal
personality
• 2) Thomas Cochran has formulated a sociological theory
of entrepreneurial supply. The key elements in his
system are cultural values, role expectations, and social
sanctions. Entrepreneurs are not viewed as being
supernormal individuals, but rather as representing
society's modal personality
theory of social change – hagen
• he theory is based on a general model of the society. His
theory viewed the entrepreneur as a trouble shooter
who contributes to economic development. The
creativity of the entrepreneur brings about social
transformation and economic development. Economic
growth is associated with the social and political
changest
theory of religious belief max weber
• Max Weber thought so. According to him, it was the
ideas, beliefs, values and world view of human societies
that guided the way their members acted, even in the
 economic sphere. Religion prescribes certain guidelines
of behaviour.
Psychological theory
1.Theory of Personal Resourcefulness
• “Personal resourcefulness” is the belief in one’s own
capability for initiating actions directed towards creation
and growth of enterprise. Thus, it emphasize on
initiative rather than reaction
2. Theory of Entrepreneurial Supply
• Theory of Entrepreneurial Supply It was propounded by
John Kunkal in 1965. It is based upon experimental
psychology and sociological variables. This
behaviouristic model concerned with the activities of
individuals and their relations to both past, present and
social structures and physical condition.
What leads a person to take up entrepreneurship as a
career option?
There can be a number of reasons
 displacement from a job,
 frustration in the present job,
 not getting a job of his/her choice, etc.
 organisation is moving towards closure.
  At times a deserving employee getting superseded in
promotion is compelled to quit the job and look for
doing something on his own.
 Some people object to a system wherein reward is often
based on seniority rather than merit.

Theories of Entrepreneur
 They proposed two closely-related explanations of
entrepreneurial motivation, the “push” and the “pull”
theory.
Push Theory
 The “push” theory argues that individuals are pushed into
entrepreneurship by negative external forces, such as job
dissatisfaction, difficulty in finding employment,
insufficient salary, or inflexible work schedule.

Pull Theory
 The “pull” theory contends that individuals are attracted
into entrepreneurial activities seeking independence, self-
fulfilment, wealth, and other desirable outcome
Some of the prominent pull factors that attract
individuals towards entrepreneurship as a career
option is:
 1)High Need for Independence: There are personalities
who would like to have freedom about: with whom to
work, when to work, with whom to do business at what
terms etc.
 It is this inner feeling in them that pushes such
personalities to start something of their own.
 2)To satisfy the dream of having high Financial
Rewards:
 To satisfy the need to derive high financial rewards as an
outcome of efforts leads some to start a business of
their own.
 The fundamental difference between job and own
venture lies in the degree of financial rewards for the
efforts put in to achieve organizational goals.
 3) Opportunity to deal with all aspects of a business:
 No job can provide an opportunity to learn and deal
effectively with a wide spectrum of business activities
starting from idea generation, conceptualization, design,
creation, marketing to customer response and customer
satisfaction.
 4)Vision to leave a long-lasting mark: Entrepreneurship
creates an opportunity to make definite contribution to
the society by lifting the people in and around the
venture. A continuous zeal to innovate helps in touching
the heads and hearts of people at large.
  5) A strong urge from within to start a business,
combined with workable innovative ideas, careful
planning, and hard work can lead to a very engaging,
self-satisfying, enjoyable and profitable endeavour. The
greatest contributory factor to entrepreneurship is an
intention i.e., a strong purpose in life coupled with
determination to produce desired results.

Positive aspects of entrepreneurship:

 Being the boss if his own business, he enjoys unlimited
powers. He can do things in his own way and he need
not take orders from someone else. He can make his
own decisions and act on them.
 There are numerous opportunities for his self-
development.
 Working on one’s own and thus getting rewards yields
immense satisfaction and pleasure for more than what
he can get in a job.
 Monetary rewards can be more than commensurate
with his capacity and capabilities.
 He can command deference and respect of his
immediate family and friends. It is a kind of intangible
reward.
 Instead of depending on others, he generates
employment for others.
  He can make significant contribution to the
development of the country and be proud of taking part
in nation building activities.
 He can be a great achiever realizing his goals and
proving his achievements to the world. He can be
recognised for his outstanding efforts.

Negative aspects of entrepreneurship

 Though an entrepreneur is his own boss, in some
respects he is not. It is so because he is constrained by
various people like his financiers, labourers, suppliers,
customers and so on.
 He may have to face frustration since the scope of his
operations is limited by his limited resources.
 He has to work long and hard hours from morning to
dusk and his venture tends to absorb all his energy and
time. This may affect his social and family life.
 At times he may have to face disappointments and
frustrations since everything in his venture may not
always work the way he would like it to.
 He has to always work with tension since there is always
the risk of failure.

Entrepreneurial Personality
The 9 Personality Types of Entrepreneurs
1. The Improver: If you operate your business
predominately in the improver mode, you are focused
 on using your company as a means to improve the
world. Your overarching motto is: morally correct
companies will be rewarded working on a noble cause.
Improvers have an unwavering ability to run their
business with high integrity and ethics.

 Personality Alert: Be aware of your tendency to be a

perfectionist and over-critical of employees and customers.
 Entrepreneur example: Anita Roddick, Founder of The Body
Shop.

2. The Advisor: This business personality type will

provide an extremely high level of assistance and advice
to customers. The advisor's motto is: the customer is
right and we must do everything to please them.
Companies built by advisors become customer focused.

 Personality Alert: Advisors can become totally focused

on the needs of their business and customers that they
may ignore their own needs and ultimately burn out.

 Entrepreneur example: John W. Nordstrom, Founder

Nordstrom.
3. The Superstar: Here the business is centred around
the charisma and high energy of the Superstar CEO. This
personality often will cause you to build your business
around your own personal brand.

 Personality Alert: Can be too competitive and

workaholics.
 Entrepreneur example: Donald Trump, CEO of Trump
Hotels & Casino Resorts.
4. The Artist: This business personality is the reserved
but highly creative type. Often found in businesses
demanding creativity such as web design and ad
agencies. As an artist type you’ll tend to build your
business around the unique talents and creativities you
have.

 Personality Alert: You may be overly sensitive to your

customer’s responses even if the feedback is constructive.
Let go the negative self-image.
5. The Visionary: A business built by a Visionary will
often be based on the future vision and thoughts of the
founder. You will have a high degree of curiosity to
understand the world around you and will set-up plan to
avoid the landmines. Personality Alert: Visionaries can
be too focused
 Entrepreneurial example: Bill Gates, Founder of
Microsoft Inc.
6. The Analyst: If you run a business as an Analyst, your
company is focus on fixing problems in a systematic way.
Often the basis for science, engineering or computer
firms, Analyst companies excel at problem solving.
 Personality Alert: Be aware of analysis paralysis. Work
on trusting others.
 Entrepreneurial example: Intel Founder, Gordon Moore.
7. The Fireball: A business owned and operated by a
Fireball is full of life, energy and optimism. Your
company is life-energizing and makes customers feel the
 company has a get it done attitude in a fun playful
manner.
 Personality Alert: You may over commit your teams and
act to impulsively. Balance your impulsiveness with
business planning.
 Entrepreneurial Example : Malcolm Forbes, Publisher,
Forbes Magazine.
8. The Hero: You have an incredible will and ability to
lead the world and your business through any challenge.
You are the essence of entrepreneurship and can assemble
great companies.
 Personality Alert: Over promising and using force full
tactics to get your way will not work long term. To be
successful, trust your leadership skills to help others find
their way.
 Entrepreneurial example: Jack Welch, CEO GE.
 9. The Healer: If you are a Healer, you provide nurturing
and harmony to your business. You have an uncanny
ability to survive and persist with an inner calm.
 Personality Alert: Because of your caring, healing
attitude toward your business, you may avoid outside
realities and use wishful thinking. Use scenario planning
to prepare for
Characteristics of successful Entrepreneur
 Capacity to take risk
 Capacity to work hand
 Above average intelligence and wide knowledge
 Self-Motivation
  Vision and foresight
 Willingness to defer consumption
 Imagination initiative and emulation
 Incentive ability and sound judgment
 Flexibility and sociability
 Desire to take personal responsibility.
 Desire to seek and use feedback
 Persistence in the face of adversity
 Innovativeness and future orientation
 Mobility and drive
 Creative Thinking.
 Strong need for achievement
 Ability to Marshall resources
 High degree of ambition
 Will to conquer & impulse to fight.
 Will to prove superior to others.
Knowledge and Skills of Entrepreneur
 1. Idea generation & scanning of the best suitable
idea
 2. Determination of the business objective
 3. Product analysis and market research
 4. Determination of form of ownership
 5. Completion of promotional formalities
 6. Raising necessary funds
 7. Procuring machine & material
 8. Recruitment of men
 9. Undertaking the business operations
Types of Entrepreneurs
Based on the Type of Business:
 1. Trading Entrepreneur: As the name itself suggests,
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. These serve as the middlemen as
wholesalers, dealers, and retailers between the
manufacturers and customers.
 2. 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. In other words, the
manufacturing entrepreneurs convert raw materials into
finished products.
 3. Agricultural Entrepreneur: The entrepreneurs who
undertake agricultural pursuits are called agricultural
entrepreneurs. They cover a wide spectrum of
agricultural activities like cultivation, marketing of
 agricultural produce, irrigation, mechanization, and
technology.
 4.Business entrepreneur – conceives idea for new
product and makes in to reality
Based on the Use of Technology:
 1. Technical Entrepreneur: The entrepreneurs who
establish and run science and technology-based
industries are called „technical entrepreneurs. ‟
Speaking alternatively, these are the entrepreneurs who
make use of science and technology in their enterprises.
Expectedly, they use new and innovative methods of
production in their enterprises.
 2. Non-Technical Entrepreneur: Based on the use of
technology, the entrepreneurs who are not technical
entrepreneurs are non-technical entrepreneurs. The
forte of their enterprises is not science and technology.
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) Professional – they take part in establishing new
enterprises but never stay for long time. they have
innovative ideas
Based on Ownership:
 1. Private Entrepreneur: A private entrepreneur is one
who as an individual sets up a business enterprise. He /
 she it’s the sole owner of the enterprise and bears the
entire risk involved in it.
 2. State Entrepreneur: When the trading or industrial
venture is undertaken by the State or the Government,
it is called „state entrepreneur. ‟
 3. Joint Entrepreneurs: When a private entrepreneur
and the Government jointly run a business enterprise, it
is called joint entrepreneurs
Based on Gender:
 1. Men Entrepreneurs: When business enterprises are
owned, managed, and controlled by men, these are
called men entrepreneurs.
 2. 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.
Based on the Size of Enterprise:
 1. Small-Scale Entrepreneur: An entrepreneur who has
made investment in plant and machinery up to Rs 1.00
crore is called „small-scale entrepreneur. ‟
 2. Medium-Scale Entrepreneur: The entrepreneur who
has made investment in plant and machinery above Rs
1.00 crore but below Rs 5.00 crore is called „medium-
scale entrepreneur. ‟
  3. Large-Scale entrepreneur: The entrepreneur who has
made investment in plant and machinery more than Rs
5.00 crore is called „large-scale entrepreneur.
Based on some other Behavioural Scientists:
 1. Solo Operators: These are the entrepreneurs who
essentially work alone and, if needed at all, employ a
few employees. In the beginning, most of the
entrepreneurs start their enterprises like them.
 2. Active Partners: Active partners are those
entrepreneurs who start/ carry on an enterprise as a
joint venture. It is important that all of them actively
participate in the operations of the business.
Entrepreneurs who only contribute funds to the
enterprise but do not actively participate in business
activity are called simply „partners‟.
 3. Inventors: Such entrepreneurs with their competence
and inventiveness invent new products. Their basic
interest lies in research and innovative activities.
 4. 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.
 5. 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.
  6. 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.
Based on Clarence Danhof Classification:
 1. Innovative Entrepreneur - Innovative entrepreneurs
are generally aggressive and possess the art of cleverly
putting the attractive possibilities into practice. An
innovating entrepreneur is one who introduces new
goods, inaugurates new methods of production,
discovers new market and re-organises the enterprise.
He arranges money, launches an enterprise, assembles
the various factors, chooses the competent managers
and sets his enterprise go.
 2. Imitative Entrepreneur - Imitative entrepreneurs are
characterised by readiness to adopt successful
innovations inaugurated by successful innovating
entrepreneurs. Imitative entrepreneurs do not imitate
the changes themselves; they only imitate techniques
and technologies innovated by others. Such
entrepreneurs are significant for under-developed
economies because they put such economies on high
rate of economic development. Entrepreneurs prefer to
imitate the technology already existing somewhere in
the world.
 3. Fabian Entrepreneur - Fabian entrepreneurs are
cautious and sceptical in experimenting change in their
enterprises. Such entrepreneurs are shy, lazy and
 lethargic. They are imitative by nature but are not
determined and also lack power. They imitate only when
it becomes perfectly clear that failure to do so would
result in a loss of the relative position of the enterprise.
 4. Drone Entrepreneur - Drone entrepreneurs are
characterised by a refusal to adopt opportunities to
make changes in production formulae even at the cost
of severely reduced returns. They can suffer loss but are
not ready to make changes in their existing production
methods. When competition increases, they are pushed
out of the market as it becomes uneconomical for them
to exist and operate in a competitive market.
On the basis of motivation
 1) pure entrepreneurs – start new business
 2) induced – to start business the central and state govt
provide incentives for land concessional rate
 3) spontaneous – the inner urge to start entrepreneur
 Others
 1) academic entrepreneur -the teachers if they adopt
new courses in teaching methods
 2) educational – short time courses on computer. Many
entrepreneurs come with summer coursed for kids
 3)webpreneur: with on line
7 key Qualities of Entrepreneur
 Inner Drive to Succeed: Entrepreneurs are driven to
succeed and expand their business. They see the bigger
picture and are often very ambitious. Entrepreneurs set
massive goals for themselves and stay committed to
achieving them regardless of the obstacles that get in
the way.
 Strong Belief in themselves: Successful entrepreneurs
have a healthy opinion of themselves and often have a
strong and assertive personality. They are focused and
determined to achieve their goals and believe
completely in their ability to achieve them. Their self-
optimism can often be seen by others as flamboyance or
arrogance but entrepreneurs are just too focused to
spend too much time thinking about unconstructive
criticism.
 Search for New Ideas and Innovation: All entrepreneurs
have a passionate desire to do things better and to
improve their products or service. They are constantly
looking for ways to improve. They're creative, innovative
and resourceful.
 Openness to Change: If something is not working for
them, they simply change. Entrepreneurs know the
importance of keeping on top of their industry and the
only way to being number one is to evolve and change
with the times. They're up to date with the latest
technology or service techniques and are always ready
to change if they see a new opportunity arise.
 Competitive by Nature: Successful entrepreneurs thrive
on competition. The only way to reach their goals and
live up to their self-imposed high standards is to
compete with other successful businesses.
 Highly Motivated and Energetic: Entrepreneurs are
always on the move, full of energy and highly motivated.
They are driven to succeed and have an abundance of
self-motivation. The high standards and ambition of
many entrepreneurs demand that they have to be
motivated!
 Accepting of Constructive Criticism and Rejection:
Innovative entrepreneurs are often at the forefront of
their industry so they hear the words "it can't be done"
quite a bit. They readjust their path if the criticism is
constructive and useful to their overall plan, otherwise
they will simply disregard the comments as pessimism.
Also, the best
Concept of Entrepreneurship

Entrepreneurship
Concept:
The capacity and willingness to develop, organize and
manage a business venture along with any of its risks in order
to make a profit. The most obvious example of
entrepreneurship is the starting of new businesses.
Definition:
Entrepreneurship is based on purposeful and systematic
innovation. It includes not only the independent
businessmen but also company directors and managers who
actually carryout innovative functions. - Joseph A.
Schumpeter
(Austrian-born American economist and political scientist)
Characteristics
1)Innovation
2) risk bearing
 3) decision making
4) organization
5)making the enterprise success
6)accepting challenge
7) handle economic uncertainty
8) problem solving
9)systematic planning
Factors stimulating entrepreneurship
 Capital formation – making capital available
 Development programme- supportive govt program
 Training
 Suitable environment – to transform scientific and
technical development in to viable projects
 Ideal climate for innovation
Phases of entrepreneurial development
 Initial phase – creation of awareness about
entrepreneur opportunities once created they will be
motivated
 Development phase – the motivated person must be
trained
 Support phase – after training they must be provided
support for infrastructure finance counseling etc.
Factors affecting entrepreneurial growth
 1.Economic Factors
 a) Lack of adequate overhead facilities: Profitable
innovations require basic facilities like transportation,
communication power supply etc. They reduce cost of
production and increase profit.
 b) Non availability of capital: Inventions are capital
oriented. In less developed countries most capital
equipment have to be imported which involves foreign
exchange which acts as a difficult problem
 C)Great risk: Risk is high in case of less developed
countries as there is lack of reliable information,
markets for good and services is small etc.
 d) Non availability of labour and skills: Though there is
abundant labour supply there is generally scarcity of
skills at all levels
2 Social Factors
 Social factors are the things that affect the habits and
spending of customers. These
include: demographics. lifestyles. tastes and trends.
 The social factors, culture, government policies, political
system, technology, economic conditions, laws, etc
influence the growth of entrepreneurship.
 Business is a system made up of certain environmental
factors which require the entrepreneurs to adopt a
dynamic attitude and a new strategy of their own
3. Cultural Factors
  Entrepreneurial behaviour i.e., Family and friends, play
a strong role as source for developing entrepreneurial
behaviour.
 Their moral and financial support helps entrepreneur to
take risks and inculcate new ideas in their business.
 The culture has stronger impact on developing
4) Personality Factors
 The Psychological factors affecting entrepreneurship or
his personality are as follows:
 1. Competition and Collaboration
 2. Entrepreneur Challenges
 3. Expectations from Employees
 4. Social Consciousness
 5. Dignity Towards Labour High Achievement Motive
 7. Achievement of the goals and objectives.
 8. Expansion Motivation
 9. Efforts for Continuous Innovation
 10. Builder of New Organisations
 11. More Practical
 12. Select Calculated Risk and Risk Taking
5) Psychological and sociological factors:
 From the social point of view, entrepreneurship is
regarded as an act of some specific communities, castes
 and ethnic groups, and social institutions, social norms,
culture, and social values affect the level of
entrepreneurship,
 whereas, psychologists focus on personality traits and
their effect on entrepreneurship
Process of Entrepreneurship
 1: Self Discovery
 2: Identifying opportunities
 3: Generating and evaluating ideas
 4: Planning
 5: Arranging start-up capital
 6: Start up
 7: Growth
 8: Harvest ‘

ROLE OF ENTREPRENEURSHIP IN
ECONOMIC DEVELOPMENT
1) Promotes Capital Formation:
• Entrepreneurs promote capital formation by
mobilising the idle savings of public. They employ
their own as well as borrowed resources for setting
up their enterprises. Such type of entrepreneurial
activities leads to value addition and creation of
wealth, which is very essential for the industrial and
economic development of the country
2) Creates Large-Scale Employment Opportunities:
• Entrepreneurs provide immediate large-scale
employment to the unemployed which is a chronic
problem of underdeveloped nations. With the
setting up. Of more and more units by
entrepreneurs, both on small and large-scale
numerous job opportunities are created for others.
As time passes, these enterprises grow, providing
direct and indirect employment opportunities to
many more.
3) Promotes Balanced Regional Development:
• Entrepreneurs help to remove regional disparities
through setting up of industries in less developed
and backward areas.
• The growth of industries and business in these
areas lead to a large number of public benefits like
road transport, health, education, entertainment,
etc. Setting up of more industries lead to more
development of backward regions and thereby
promotes balanced regional development.
4) Reduces Concentration of Economic Power:
Economic power is the natural outcome of industrial
and business activity.
• Industrial development normally lead to
concentration of economic power in the hands of a
few individuals which results in the growth of
monopolies.
• In order to redress this problem a large number of
entrepreneurs need to be developed, which will help
reduce the concentration of economic power
amongst the population.
5) Wealth Creation and Distribution:
• It stimulates equitable redistribution of wealth and
income in the interest of the country to more people
and geographic areas, thus giving benefit to larger
sections of the society.
• Entrepreneurial activities also generate more
activities and give a multiplier effect in the economy.
(6) Increasing Gross National Product and Per
Capita Income:
• Entrepreneurs are always on the lookout for
opportunities. They explore and exploit
opportunities, encourage effective resource
mobilisation of capital and skill, bring in new
products and services and develops markets for
growth of the economy.
• In this way, they help increasing gross national
product as well as per capita income of the people
in a country. Increase in gross national product and
per capita income of the people in a country, is a
sign of economic growth.
(7) Improvement in the Standard of Living:
• Increase in the standard of living of the people is a
characteristic feature of economic development of
the country.
• Entrepreneurs play a key role in increasing the
standard of living of the people by adopting latest
innovations in the production of wide variety of
goods and services in large scale that too at a
lower cost.
• This enables the people to avail better quality
goods at lower prices which results in the
improvement of their standard of living.
8) Promotes Country's Export Trade:
• Entrepreneurs help in promoting a country's export-
trade, which is an important
• ingredient of economic development.
• They produce goods and services in large scale for
the purpose earning huge amount of foreign
exchange from export in order to combat the import
dues requirement.
• Hence import substitution and export promotion
ensure economic independence and development.
9) Induces Backward and Forward Linkages:

 Entrepreneurs like to work in an environment of

change and try to maximise profits by innovation.
When an enterprise is established in accordance
with the changing technology, it induces
backward and forward linkages which stimulate
the process of economic development in the
country.
(10) Facilitates Overall Development:
• Entrepreneurs act as catalytic agent for change
which results in chain reaction. Once an enterprise
is established, the process of industrialisation is set
in motion.

Growth of Entrepreneurship in India

 The process of improving entrepreneurial skills and
knowledge among individuals with the help of
providing well-organized training and developing
supporting institutions is called entrepreneurial
growth or development.
 Entrepreneurs are important to market economies,
because they can act as the wheels of the
economic growth of the country.
 By creating new products and services, they
stimulate new employment, which ultimately results
in the acceleration of economic development.

Growth of Entrepreneurship in India during

Pre-Independence
 The evolution of the Indian entrepreneurship can be
traced back to even as early as Rig-Veda, when
metal handicrafts existed in the society.
 handicrafts entrepreneurship in India was as old as
the human civilization itself
 Before India came into contact with the West,
people were organized in a particular type of
economic and social system of the village
community.
 the village community created the economic scene
in India.
 The Indian towns were religious and away from the
general life of the country.
 The workers consisted of farmers, artisans and
religious sections (the Brahmins).
 The majority of the artisans were village servants.
 Such system of village community protecting the
village artisans from the external competition and
 was one of the major contributing factors to the
absence of industry in ancient India.
 organized industrial activity was observable among
the Indian artisans in a few recognizable products in
the cities of Banaras, Allahabad, Gaya, Puri, and
Mirzapur which were established on their river
basins. Very possibly, this was because the rivers
served as a means of transportation facilities.
 Bengal enjoyed world-wide celebrity for corah,
Lucknow for chintzes, Ahmedabad for dupattas and
dhotis, Nagpur for silk-bordered cloths, Kashmir for
shawls, and Banaras for metal wares.
 Thus, from the earlier years of the eighteenth
century, India enjoyed the prestigious status of the
international trade with the help of its handicrafts.
 Unfortunately, prestigious Indian handicraft
industry, which was basically a cottage and
small sector, declined at the end of the
eighteenth century for various reasons but not
confined to the following only:
 1. Disappearance of the Indian Royal Courts, who
patronized the crafts earlier;
 2. The lukewarm attitude of the British colonial
Government towards the Indian crafts;
 3. Imposition of heavy duties on the imports of the
Indian goods in England;
 4. Low-priced British-made goods produced on
large-scale which reduced the competing capacity
of the products of the Indian handicrafts;
 5. Development of transport in India facilitating the
easy access of British products even to far-flung
remote parts of the country;
 6. Changes in the tastes and habits of the Indian
customers, developing craziness of foreign
products; and
 7. Unwillingness of the Indian craftsmen to adapt to
the changing tastes and needs of the people.
 The manufacturing entrepreneurship in India
emerged a consequence of East India Company’s
advent in India.
 The company injected various changes in the Indian
economy through export of raw materials and
import of finished goods in India.
 The Parsis established relationship with the
Company and were much influenced by the
Company’s commercial operations.
 The Company established its first ship-building
industry in Surat where from 1673 onwards the
Parsis built vessels for the Company.
 The important was shipwright Lowjee-Nushirvan,
who migrated to Mumbai around 1935.
 He belonged to a Wadia family which gave birth to
many leading ship-builders of Mumbai. In 1677,
Manjee Dhanjee won a contract for building the first
large gun-powder-mill in Mumbai.
 On the basis of these facts, it can be stated that the
East India Company made contribution to
entrepreneurial growth in India.
 People came in contact with the Company and
entered the manufacturing.
 The actual emergence of manufacturing
entrepreneurship can be noticed in the second half
of the nineteenth century.
 Prior to 1850, failure attempts were, made by the
Europeans to set up factories in India.
 In the beginning, the Parsis were the founder
manufacturing entrepreneurs in India.
 Ranchodlal Chotalal, a Nagar Brahman, was the
first Indian to think of setting up the textile
manufacturing on the modern factory lines in 1847,
but failed.
 In his second attempt, he succeeded in setting up a
textile mill in 1861 at Ahmedabad.
 But before this, the first cotton textile manufacturing
unit was already set up by a Parsi, Cowasjee
Nanabhoy Davar in Mumbai in 1854 followed by
Nawrosjee Wadia, who opened his textile mill in
Mumbai in 1880.
 The credit for the expansion of textile industries up
to 1915 goes to the Parsis.
 Also, Jamshedjee Tata was the first Parsi
entrepreneur who established the first steel industry
in Jamshedpur in 1911.
 Jains and Vaishyas of Ahmedabad and Baroda,
lagged behind in entrepreneurial initiative
throughout the nineteenth century can be explained
by two major factors.
 Firstly, the Improvement of business during this
period resulted in an increase in trade which
assured quick returns on investments.
 This proved the commercial activity more during the
period.
 Secondly, it can also be attributed to their
conservative attitude to change from commercial
entrepreneurship to industrial entrepreneurship.
 The Swadeshi campaign, i.e., emphasis on
indigenous goods, provided, a seedbed for
 inculcating and developing nationalism in the
country.
 It was the influence of Swadeshi that Jamshedjee
Tata named his first mill ‘Swadeshi Mill’.
 The second wave of entrepreneurial growth in India
began after the First World War. For various
reasons, the Indian Government agreed to
‘discriminating’ protection to certain industries,
requiring companies receiving benefits should be
registered in India and have a director as Indian.
 The advantages were enjoyed by the Indians.
 The European failed to harness the protectionist
policies to their interests.
 These measures helped in establishing and
extending the factory manufacturing in India during
the first four decades of the twentieth century.
 During these periods, the importance of Parsis
declined and Gujaratis and Marwari Vaishyas
gained in India’s entrepreneurial scene.
 The Managing Agency System made its
contribution to the Indian entrepreneurship can be
traced back to 1936 when Car, Tagore & Co.
started the management of Calcutta Steam Tug
Association.
 Dwarka Nath Tagore, who encouraged others to
form joint-stock companies and invented a method
of management in which management remained in
the hands of the ‘firm’ rather than of an ‘individual’.
 Historical evidences confirm that after the East
India Company lost monopoly in 1813, the
European Managing Agency Houses entered
business, trade and banking. And, these houses
 markedly influenced eastern India’s Industrial
scene.
 It is stated that the Managing Agency Houses were
the real entrepreneur for that period particularly in
Eastern India.
 Brimmer is of the opinion that Agency Houses
emerged to overcome the limitations imposed by a
shortage of venture capital.

Growth of Entrepreneurship in India during

Post Independence
 After taking a long sigh of political relief is 1947, the
Government of India tried to spell out the priorities
to devise a scheme for achieving balanced growth.
 For this purpose, the Government came forward
with the first Industrial Policy, 1948 which was
revised from time to time.
 The Government in her various industrial policy
statements identified the responsibility of the State
to promote, assist and develop industries in the
national interest.
 It also explicitly recognized the vital role of the
private sector in accelerating industrial development
and, for this, enough field was reserved for the
private sector.
 The Government took three important measures in
her industrial resolutions:
 to maintain a proper distribution of economic power
between the private and public sector;
 to encourage the tempo of industrialization by
spreading entrepreneurship from the existing
centers to other cities, towns and villages, and
 to disseminate the entrepreneurship acumen
concentrated in a few dominant communities to a
large number of industrially potential people of
varied social strata.
 To achieve these adumbrated objectives, the
Government accorded emphasis on the
development of small-scale industries in the
country.
 Particularly since the Third Five Year Plan, the
Government started to provide various incentives
and concessions in the form of capital, technical
know-how, markets and land to the potential
entrepreneurs to establish industries in the
industrially potential areas to remove the regional
imbalances in development.
 This was, indeed, a major step taken by the
Government to initiate interested people of varied
social strata to enter the small-scale manufacturing
field.
 Several institutions like Directorate of Industries,
Financial Corporations, Small-Scale Industries
Corporations, and Small Industries Service Institute
were also established by the Government to
facilitate the new entrepreneurs in setting tip their
enterprises.
 Expectedly, the small-scale units emerged very
rapidly in India witnessing a tremendous increase in
their number from 121,619 in 1966 to 190,727 in
1970 registering an increase of 17,000 units per
year during the period under reference.
 The recapitulation of review of the literature
regarding entrepreneurial growth in India, thus,
leads us to conclude that prior to 1850, the
 manufacturing entrepreneurship was negligible lying
dormant in artisans.
 The artisan entrepreneurship could not develop
mainly due to inadequate infrastructure and
lukewarm attitude of the colonial political structure
to the entrepreneurial function.
 The East India Company, the Managing Agency
Houses and various socio-political movements like
Swadeshi campaign provided one’ way or the other,
proper seedbed for the emergence of the
manufacturing entrepreneurship from 1850
onwards.
 The wave of entrepreneurial growth gained
sufficient momentum after the Second World War.
Since then, the entrepreneurs have increased
rapidly in numbers in the country.
 Particularly, since the Third Five Year Plan, small
entrepreneurs have experienced a tremendous
increase in their numbers.
 But they lacked entrepreneurial ability, however.
 The fact remains that even the small
entrepreneurship continued to be dominated by
business communities though at some places new
groups of entrepreneurs too emerged.
 Also, there are examples that some entrepreneurs
grew from small to medium-scale and from medium
to large-scale manufacturing units during the period.
 Women Entrepreneurs
 Women entrepreneur may be defined as a woman
or group of women who initiate, organize, and run a
business enterprise.
 Kamal Singh who is a woman entrepreneur from
Rajasthan, has defined woman entrepreneur as “a
confident, innovative and creative woman capable
of achieving self-economic independence
individually or in collaboration, generates
employment opportunities for others through
initiating, establishing and running the enterprise by
keeping pace with her personal, family and social
life.”
 The family entrepreneurship units like Tata, Birla,
Mafatlal, Dalmia, Kirloskar, and others grew beyond
the normally expected size and also established
new frontiers in business in this period.
 Notwithstanding, all this happened without the
diversification of the entrepreneurial base so far as
its socio-economic ramification is concerned.
Functions of women entrepreneur
 1. Exploration of the prospects of starting a new
business enterprise.
 2. Undertaking of risks and the handling of
economic uncertainties involved in business.
 3. Introduction of innovations or imitation of
innovations.
 4. Coordination, administration and control.
 5. Supervision and leadership.

Growth of Women Entrepreneurship in India

 In India, because of culture & traditions, women are
supposed to perform household activities & take
care of family because of these reasons women
entrepreneurship is very low.
 But due to the widespread of education and social
awareness during last three decades now women
are showing interest in starting their own venture.
 Hence there is a considerable growth of women
entrepreneurs.
 E.g.: - Mujumdar Shaw of Biochem, Shahanaj
Husana, Mahila khadi Udyog.
 Now a day’s, Indian women are willing to accept
challenges & assume responsibility in economic
social, political group.
 Generally, they engage them in tiny or small cottage
industries.
c)1988-89 survey shows there was 1,53,000
women entrepreneur which are 9% of a total
of 1.7 million in India.
 Thus from 1980 onwards, India has shown positive
growth among women entrepreneurship.
During 95-96, there were 3,00,000 women
entrepreneurs in India.
 In the financial year 2021. Women owned a little
over 20 percent of all micro, small and medium
businesses across India compared to 80 percent
among men.
 In India women, entrepreneurs are classified as
follows:
 Women with adequate education & professional
qualification get engaged in the business
 Middle-class women who have an education but
lack training.
 Women who take up a business enterprise who
face financial difficulties
 Government of India has made certain efforts
through industrial policies
7-5-year plan
 This plan has included a special provision for the
development of women.
 1991 industrial policy highlights a special training
program to develop women entrepreneur.
 The objective of these plans was to increase the
number of women in the field of small industry & to
create self-employment.
8-5 years plan
 This plan gave importance to the development of
the SSI sector.
 Before the implementation of this plan, the
percentage of women entrepreneur was 9 % & was
targeted to 20%.
 In 1996 the Department of SSI under the ministry of
industry had taken initiative to train lakh women
entrepreneurs. Through various schemes like
 Mahila Gramudyog Scheme
 Jawahar Rojagar Uyojaga Scheme
 Ibis Mahila Udyog Vidhi
 Urban Poverty Education Programme
 Scheme Of Nabard
 Shakti Package for Women’s
 Schemes of SBI
 These were to stimulate growth among women
  There is a federation of the society of women
entrepreneur which also supports women
entrepreneur.
 Besides this, at state level also various programs
are conducted. For E.g. –women Industrialist
Association of Maharashtra was set up in 1985.

Problems and Challenges faced by Women

entrepreneurs
 The major problems and challenges encountered by
women entrepreneurs are as below: -
1. MALE DOMINATED SOCIETY: A woman is
dominated by men in her family as well as in business. She
has to obtain prior approval from men for almost everything.
They are not treated as equal members. Her freedom is
restricted.
 She always has to consult and get approval of men before
taking any decision regarding her business.
 Most women CEOs find themselves in a male dominated
workplace that does not want to accept their leadership
role.
 Alison Gutterman, CEO and president of her family's
business “Jelmar”, had this experience early in her career
that "As a female entrepreneur in a male-dominated
industry, earning respect has been a struggle".
2. LIMITED FINANCE:
 Finance is the basic problem faced by all women
entrepreneurs. They have to depend upon self-generated
finance for starting their businesses. Before marriage
 they have to depend upon their fathers and after
marriage, they have to follow the f their husbands.
 As such, women do not have any property in their names
and they have limited access over external sources of
funds, even getting loans either from banks or financial
institutions become difficult for them.
3. SCARCITY OF RAW MATERIAL: Most of the women
entrepreneurs face the problem of scarcity of raw material and
other necessary inputs. Either they get raw material at very
high prices or get minimum discount while purchasing.
4. STIFF COMPETITION: Women entrepreneurs do not
have more funds to advertise their products at a large scale.
Thus, they have to face tough competition for marketing their
products.
5. BALANCING BUSINESS AND FAMILY LIFE: It is
very difficult for women entrepreneurs to manage their
business along with family. If she doesn’t get support from
family, she cannot handle the business properly.
6. LIMITED MOBILITY: Women mobility is very limited,
due to her family which restricts her timings for work. she is
not in a position to travel frequently and be away from home
for longer periods.
7. FAMILY TIES: a married women’s main duty is to look
after her family members. Her involvement in family, leaves
little energy and time to start a business. On the other hand, in
the case of an unmarried girl, a lot of restrictions are made by
the parents.
8. LOW RISK BEARING ABILITY: from the childhood,
her parents take decisions for her and after marriage her
husband takes decisions for her. She is protected throughout
her life. This reduces her ability to bear risk involved in
running the business.
9. LACK OF EDUCATION OR TRAINING: In our
society, importance is given to male child as compared to
female child. This mindset results in lack of education and
necessary training for the women.
10. LACK OF CONFIDENCE: women are given a
subordinate status, as a result they do not have confidence in
their own capabilities. Even at home, family members do not
have faith in their abilities of decision-making.
11. ADMINISTRATIVE AND REGULATORY
BARRIERS Administrative and regulatory barriers were
judged to be major issues faced by women entrepreneurs.
12. FEAR OF FAILURE: These losses and mistakes prevent
a woman from moving ahead. She is afraid of what people
will say if she fails. This fear stops her to start a new venture.