1.3.

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Mind map
Definitions

Characteristics Motives

Entrepreneur
Successful entrepreneurs Mc Gregors theory
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Leadership styles

JEFF BEZOS Founded Amazon.com Chief Executive of Amazon.com

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Steven Paul Jobs III He is the co-founder, Chairman, and CEO of Apple Inc.
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Duncan Bannatyne
Director of Bannatyne Enterprises
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RICHARD BRANSON Founder of VIRGIN brand and owner of over 360 companies
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Definitions
Meaning of enterprise: An enterprise

is the business organization that is formed and which provides goods and services, creates jobs, contributes to national income, exports and overall economic development. Factors of an enterprise are land, labor, capital and entrepreneur.
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Definitions
Meaning of entrepreneur: An entrepreneur is the person who bears risk, unites various factors of production to exploit the perceived opportunities in order to evoke demand, create wealth and employment. The word derived from the French entre (to enter) and predndre (to take). It was first defined by the Irish economist Richard Cantillon. A female entrepreneur sometimes known as an entrepreneuse.
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Definitions
Meaning of intrapreneur: Is an individual who acts like an entrepreneur but from inside the confines of a large organization or corporation. These people within the organization work hard and bring the innovative thought into practice.
Meaning of entrepreneurship: Entrepreneurship can be described as a process of action an entrepreneur undertakes to establish his enterprise.

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Characteristics of an entrepreneur
Initiative: showing the spark to seize the

opportunities, without being intimidated by the thought why is no one else doing this already; this requires self confidence and the ability to cope with. Planner: entrepreneur frames realistic business plans and follows them rigorously to achieve the objectives in a stipulated time limit.
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 Resilience and determination: to see through

if the going gets tough, backed by simple hard work. Readily recovering form shock or distress. Innovation/Creative: Innovation is the specific tool of entrepreneurs, the means by which they exploit change as an opportunity for a different business or a different service. It is capable of being practiced. Entrepreneur thoughts and way of doing things will be different than others. For example innocent drinks, Richard Branson, Bill Gates etc.,
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 Risk bearer: entrepreneur accepts risk they select a moderate risk situation and they understand and manage risk. He has to guarantee wages to employees, interest on capital, rent to the landlord without any guarantee of returns. High degree of

vision, foresight, and imagination are required to handle risks. Take calculated risks, weighing up the potential risks and rewards. Opportunity explorer: entrepreneur identifies opportunities. The seize opportunity and convert them into realistic achievable goals.
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Self confidence: entrepreneur

directs his abilities towards the accomplishment of goals with the help of his strengths and weaknesses. Motivator: entrepreneur influence and initiate people and make them think in his way and act accordingly.
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What motivates entrepreneurs?

Entrepreneur is motivated by three

motives (motives means which are attracts and stimulate the person (i.e. entrepreneur) to do the business) Profit motive Non profit motive (Social responsibility) Ethical Stance.
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Ethical uniforms at Tesco. Smart kids can be stylish and ethical by choosing Tesco's recycled, organic or Fair trade
cotton ranges.
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Tesco wins green award Business in the Community has recognized us as the green leader with a prestigious environmental award! The big tick award
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Tesco is the first supermarket to trial labels showing the carbon footprint of the products you're buying.
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Leadership
Leadership is the process of influencing

group activities towards the accomplishment of goals in a given situation. Leadership depends on three things such as the individual, the follower and the condition. Management is doing things right, leadership is doing the right things (Peter Ducker)
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What leader does?

Leader develops teamwork
Leader represents his/her subordinators Leader uses power properly Leader manages the time well Leader strives for effectiveness

Leader counsels appropriately

Leader sets realistic goals.
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IMPORTANCE OF LEADERSHIP
Aid to authority Motive power to Group

Efforts Basis for cooperation Integration of formal and informal organization

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FACTORS AFFECTING LEADERSHIP STYLES AND APPROACHES

The task
The tradition of the organization The type of labor force The group size The leaders personality

Group personality
Time
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Types of leadership styles Autocratic Style Democratic Style Paternalistic Style Free Rein or Laissez Faire leadership
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Autocratic style
Leader makes decisions without reference

to anyone else, quick and decisive. High degree of dependency on the leader Can create de motivation and alienation of staff May be valuable in some types of business where decision need to be made
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Evaluation
Advantages

It permits quick decisions

Disadvantages It leads to frustration, low

as a single person takes decisions It provides strong motivation and satisfaction to the leader. It can be successful where subordinates are reluctant to take initiative Decisions and direction of business will be consistent.

morale and conflict which affect organizational efficiency Subordinates highly dependent upon leaders. Supervision needed which increases supervision cost. Insecure and afraid of leaders power There is resistance to change as workers feel harassed and disturbed.
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Democratic style
Decentralize power and authority Encourages decision making from different perspectives

leadership may be Emphasized throughout the organization. May help motivation and involvement Consultative: Process of consultation before decisions are taken Persuasive: leader takes decision and seeks to persuade others that the decision is correct. Workers feel ownership of the firm and its ideas improves the sharing of ideas and experiences within the business. It will delay decision making.
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Evaluation
Advantages It reduces resistance to change and increases acceptance of new ideas. It improves the attitudes of employees towards their jobs and the organization It increases cooperation between management and workers It improves employee morale and reduces complaints or grievances
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Disadvantages It may delay in decisions It may be used covertly to manipulate employees. Participation will not be meaningful unless the subordinates understand thoroughly the complex problems of the organization. It may not be liked by people who want minimum interaction with superiors and colleagues.
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Paternalistic Leader acts as a father figure Paternalistic leader makes decision but may consult Believes in the need to support staff
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Evaluation
Advantages can get loyalty low labor turnover it emphasis on social needs It guides, helps and protect the followers. Good working conditions Fringe benefits Welfare facilities and services.
Disadvantages Employees may resent the leaders gratitude in industrial organizations. Little opportunity to exercise initiative to grow and realize their full potential. Groups will become dependent. They may become dissatisfied with leader. It is similar to autocratic It will not allow subordinate to take decisions.
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Free Rein or Laissez - Faire

This is also called free rein style of leadership It avoid power and responsibility Group members train themselves and provide their own

motivation Leader plays only a minor role Let it be the leadership responsibilities are shared by all Can be very useful in business where creative ideas are important Can be highly motivational, as people have control over their working life. Can make coordination and decision making, time consuming and lacking in overall direction Relies on good team work Relies on good interpersonal relations.
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Evaluation
Advantages complete freedom to subordinates improves their motivation and morale
There is maximum

opportunity for the development of subordinates. professional or creative groups.

May bring best out of highly

Disadvantages There is abdication of formal leadership role; informal leaders emerge to fill the void. The group does not get the benefit of leaders inspired motivation, guidance and socio emotional support. It can succeed only when the followers are highly mature, able and self motivated. It ignores the managers contribution just as autocratic leadership ignores the contribution of the group.
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Evaluation continued..
All persons are given the May not be deliberate, but bad

chance to express themselves and to function relatively independently.

No supervision, it reduces

supervision expenses
No bossism Flexibility in doing work

management Staff lack focus and sense of direction, Much dissatisfaction Lack of group cohesion and unity toward organizational objectives. Without leader, the group may have little direction and a lack of control. The result can be inefficiency or, even worse, chaos.
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Douglas McGregor
Theory X and Theory Y It was an attempt to apply implications of Maslow, Taylor and Mayo It is not dividing the employees into two categories but it is the manager perspective about employees It assumes theory X employees are lazy theory Y people are active/motivated

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Theory X is based on the following assumptions

People in general have an inherent dislike for work and avoid it if they can. They are basically lazy and like to work as little as possible.
Most people have lack of ambition

Workers are motivated by money

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Assumptions continued ..
Workers are selfish, ignore the needs of organizations avoid

responsibility and lack ambition They are by nature resistant to change. They lack creativity and prefer to maintain status quo.
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Theory Y is based on the following assumptions

Manager assumes that employees are motivated.
Workers have many different needs which motivates them

Workers can enjoy work

If motivated, workers can organize themselves and take responsibility

Management should create a situation where workers can show creativity and apply their job knowledge.
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The concept of McGregor to motivate X employees

Autocratic leadership is required

because workers need more control Decision making can be centralized Apply scientific management (i.e. money is motivating factor) Pay and punish.
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The concept of McGregor to motivate theory Y employees

A democratic or even free rein style of leadership is required Decentralization of decision making
Encouraging the employees to do

more work.
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Evaluation
Advantages Managers can take the decisions according to X and Y Competition between X and Y employees increases efficiency Management control can be possible

Disadvantages Employees dislike the discrimination Conflicts between Y and X employees Management biased to Y employees.
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Criticism
The main contribution of McGregor is that he helped to crystallize and set in right perspective the findings of the Hawthorne Experiments. One might get the impression that Theory X is bad and Theory Y is good. This is not

true as in practice people do not belong to either of the two extremes. An enterprise man shares the traits of both the theories and the emphasis shifts with changes in environment and motives. Therefore, it is a combination of both. Theory X and Theory Y will be more effective than either of the two alone.
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