Who holds the future in India

Institutional Entrepreneurship or Free-Market Entrepreneurship

It is the review of two different streams of literature: ‡ Institutions, and ‡ Entrepreneurship.

explaining what is and is not. what can be acted upon and what cannot´ .WHAT ARE INSTITUTIONS« ‡ Institutions are commonly defined as ³rules. and beliefs that describe reality for the organization. norms.

.WHAT IS ENTREPRENEURSHIP ¶Entrepreneurship is the professional application of knowledge. skills and competencies and/or of monetizing a new idea. innovation and venturing into new business activities for profit. by an individual or a set of people by launching an enterprise de novo or diversifying from an existing one (distinct from seeking self employment as in a profession or trade). employment and social good¶. Three crucial characteristics of entrepreneurial activity are : risk taking. thus to pursue growth while generating wealth.

‡ Institutional entrepreneurship is therefore a concept that reintroduces agency.INSTITUTIONAL ENTREPRENEURSHIP ‡ Activities of actors who have an interest in particular institutional arrangements and who leverage resources to create new institutions or to transform existing ones. ‡ Institutional entrepreneurs create a whole new system of meaning that ties the functioning of disparate sets of institutions together. interests and power into institutional analyses of organizations. .

‡ Institutional entrepreneurship in Indian Micro.INSTITUTIONAL ENTREPRENEURSHIP ‡ It thus offers promise to researchers seeking to bridge what have come to be called the ³old´ and ³new´ institutionalisms in organizational analysis.finance institutions. Emergence of NBFCs-MFI through transformation of NGO within the given context of Indian Micro-Finance .

‡ Proposition 2: The new venture engaged in institutional entrepreneurship creates legitimacy for its industry by creating a dominant design for that industry. .Propositions of Institutional Entrepreneurship ‡ Proposition 1: The new venture engaged in institutional entrepreneurship creates legitimacy for its industry by creating standards for the industry. ‡ Proposition 4: The new venture engaged in institutional entrepreneurship will demonstrate superior performance in the growth stage if it does not lose its first mover advantage. ‡ Proposition 3: The new venture engaged in institutional entrepreneurship creates legitimacy for its industry by forming linkages with other established firms.

FREE MARKET ENTREPRENEURSHIP ‡ A free market system is one in which individuals. make decisions about how to use most of the economy's resources. ‡ In a free market. not the government. ‡ It provides entrepreneurs one of the best environments to flourish. the potential to make a profit supplies a huge incentive for entrepreneurs to come up with new and better ideas. .

‡ patent.µ  Such intervention takes the form of ‡ price ceilings and floors.FREE MARKET ENTREPRENEURSHIP  The distinguishing feature of a free-market system is its lack of direct governmental intervention. ‡ certificates of convenience and necessity. ‡ tariffs. ‡ licenses. and ‡ import restrictions .

FREE MARKET ENTREPRENEURSHIP ‡ The free market demands that people be accountable for their actions ‡ The beauty of the free market is that entrepreneurs will only earn a profit if they do something that other people value. .

textile industry. Daryani & Binod K.FREE MARKET ENTREPRENEURSHIP ‡ Small-Scale Industries.handloom industry. jute industry ‡ Wow! Momos by Sagar J. . ‡ Kaushalaya Foundation by Kaushlendra ³MBA sabziwala´ in Bihar. Homagai.

ENTREPRENEURSHIP IN INDIA ± PRE 1990s ‡ India¶s environment of regulated economic development led to use of price ceilings. . in which prices are set below their equilibrium level to make products and services affordable to relatively poorer sections of the society.

. the government had the following choices: ± increase the price of the product. ‡ To alleviate the resulting shortage of products and services. or ± permit imports to reduce or eliminate the shortage. demand outstrips supply. the government can either help to increase the supply or help to decrease demand for those products and services.DEMAND-SUPPLY IMBALANCES ‡ Specifically. ‡ Considering the supply side options first. when prices are kept artificially low. ± subsidize production of existing suppliers so they will produce and sell more. ± encourage new businesses to enter the line of production and selling.

none of these options was seen as satisfactory. ‡ Third. because price ceilings appealed to a majority of the vote bank. although the government did subsidize production in several sectors considered essential. the resulting increased production was not sufficient to eliminate the large shortages. ‡ First. ‡ Second. . the government decided to restrict rather than increase the entry of new producers under the pretext of directing scarce resources into their efficient uses.FAILURE TO INCREASE SUPPLY ‡ In India. the government certainly did not wish to increase prices.

usually by restricting how much an individual or a family could consume.‡ Finally. in order to protect Indian producers. it could have done so ± By increasing taxes. . ‡ If the government had decided instead to limit demand. it allowed only limited recourse to imports. or ± By regulating the level of demand itself. ‡ The overall result was that inadequate amounts of products and services were supplied to the market. unless the shortage reached a stage of crisis.

the rationing regulations required those licensed private retailers to follow government stipulations in their sale of the scarce products and services . the Indian government in fact resorted to largescale rationing. albeit at less than desired levels. ‡ As might be expected.FAILURE TO RESTRICT DEMAND ‡ To ensure the availability of the scarce products and services to Indian consumers. ‡ This rationing was undertaken by government agencies themselves or by licensed private retailers.

led to an economic environment ripe for corruption.PROBLEMS WITH REGULATED ENTREPRENEURSHIP ‡ The policy of price ceilings. the lure of higher profits led producers and sellers ± to have little concern for quality such that many deliberately produced and sold inferior quality products. ‡ Also. along with the quantitative restrictions on production and consumption. and ± to resort to the creation of artificial shortages by not releasing to the market all of the products that were available for selling .

.FUTURE OF INDIA ± FREE MARKETS ‡ The Indian economy provides a revealing contrast between how individuals react under a governmentcontrolled environment and how they respond to a market-based environment. ‡ Evidence suggests that recent market reforms that encouraged individual enterprise have led to higher economic growth in that country. ‡ India can generate additional economic growth by fostering entrepreneurial activity within its borders.

FUTURE OF INDIA ± FREE MARKETS ‡ To pursue further the entrepreneurial approach to economic growth. . minimal role for the government. although the Indian government should establish policies supportive of entrepreneurial efforts. India must now provide opportunities for ± education directed specifically at entrepreneurial skills. its role overall should be minimized so that the influence of the free market and individual self-interest can be fully realized. ± financing of entrepreneurial efforts. and ± networking among potential entrepreneurs and their experienced counterparts. ± and a well-defined. ‡ Further.

± and the third is the need for further land reform in India. .FUTURE OF INDIA ± FREE MARKETS ‡ However. ± The first is the obstacle still presented by the Indian tax system. it still has several areas in need of major free market-based reforms. ‡ Below. we identify three areas from India¶s economy that reveal a restriction of the pursuit of individual selfinterest and a diversion of resources away from their most efficient use. ± the second is the inefficiencies of the Indian civil service. even though India has made substantial economic progress in recent years.

Entrepreneurship Pyramid in India .


MBA from BIMTECH. Gurgaon Price range: Rs. 26. Ghaziabad (2010).000 .200 to Rs. Starting Capital: Rs.EXAMPLES OF FREE MARKET ENTREPRENEURSHIP ‡ NURTURING GREEN: Business: To make gifting plants more fashionable than sweets or flowers. 20. 5 lacs Stores at: Shipra Mall. Started By: Annu Grover. South Delhi.

5 crore Launched the service in April 2010 with 50 Tuk Tuks. 50 for first 3 kms and Rs. Starting Capital: Rs. Started By: Sulab Mehra and his friends in Gurgaon. . Charges: Rs. 80 for subsequent one.1.‡ RADIO TUK TUK: Business: Bridging the Cab Gap. It will go where no radio cab is willing to even if it¶s just a 2km distance.

Graduate from National Law School Starting Capital: Rs. New Delhi and Noida. 13 lacs Offices at: Nehru Place. Fee charged: Rs.Contd« ‡ AKOSHA: Business: Mediator of Consumer Complaints. started in May 2010.450 . Started By: Ankur Singla.

30 for 200 ml and Rs. 2010 Price: Rs. 60 for 500 ml. 4 lacs Set up Carts at various Malls starting with MGF Metropolitan Mall at gurgaon on April 11. .‡ COCO LOCO: Business: Selling chilled coconut water as ideal isotonic drink and a alternative to colas and sports drinks Started By: Savinay Jain and Mayank Sethia Starting Capital: Rs.

Contd« ‡ NEXTLEAP Business: Runs the website www.com. 300 ± 750 per recommendation . Started By: Suruchi Wagh.yournextleap. a recommendation engine and a virtual counsellor to help students make career decisions. Studied Computer Science at College of Engineering in Pune Starting Capital: Not Disclosed Uses Psychometric Evaluations and Math models on past admission patterns and also online Personality Test Fee charged: Rs.


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