ESBE-Unit I
ESBE-Unit I
ESBE-Unit I
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Vignan Institute of Technology & Science, Hyderabad-508284
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COURSE OBJECTIVE
The aim of this course is to have a comprehensive perspective of inclusive
learning, ability to learn and implement the Fundamentals of
Entrepreneurship.
COURSE OUTCOMES
It enables students to learn the basics of Entrepreneurship and
entrepreneurial development which will help them to provide vision for their
own Start-up.
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SYLLABUS
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Recommended Books
TEXTBOOK(S):
1. Entrepreneurship Development and Small Business Enterprises, Poornima M. Charantimath, 2e, Pearson,
2014.
2. Entrepreneurship, A South – Asian Perspective, D.F.Kuratko and T.V.Rao, 3ed,Cengage, 2012.
(URL ebook: http://slidehtml5.com/zykj/mzik)
REFERENCE BOOKS:
1. Entrepreneurship, Arya Kumar, 4ed, Pearson 2015.
2. The Dynamics of Entrepreneurial Development and Management, Vasant Desai, Himalaya Publishing
House, 2015.
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https://www.startupindia.gov.in/content/sih/en/startup-scheme.html
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UNIT: I Entrepreneurial Perspectives
S.No. Topic
1 Entrepreneurship Definition
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Chapter Objectives
Studying this chapter should provide you with the entrepreneurial knowledge
needed:
• To examine the historical development of entrepreneurship
• To explore and debunk (throw light on) the myths of entrepreneurship
• To define and explore the major schools of entrepreneurial thought
• To explain the process approaches to the study of entrepreneurship
• To set forth a comprehensive definition of entrepreneurship
• To understand process of entrepreneural development
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AFTMME 2019 at IIT Ropar
Entrepreneur Definition
The Evolution of Entrepreneurship
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The Evolution of Entrepreneurship
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The Evolution of Entrepreneurship
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The Evolution of Entrepreneurship
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The Evolution of Entrepreneurship
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The Evolution of Entrepreneurship
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Summary…
• Entrepreneurship (Robert C. Ronstadt)
▫ The dynamic process of creating incremental wealth.
▫ This wealth is created by individuals who assume major risks in
terms of equity, time, and/or career commitment of providing value
for a product or service.
▫ The product or service itself may or may not be new or unique but
the entrepreneur must somehow infuse value by securing and
allocating the necessary skills and resources.
A good entrepreneur is one who is capable of inspiring confidence in people, and has the ability to
motivate them to work with him in fulfilling the economic goas set by him – Stephen Covey
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Who is entrepreneur?
• Individuals who discover market needs and launch new business to meet those
needs.
• They take risk and provide an impetus for change, innovation, and progress in
economic life.
• If a salaried employee comes up with some business idea, they will be rewarded with
a specified compensation and there is no ownership risks associated in such case.
Note: A manager is a person who is responsible for a part of a company, i.e., they 'manage' the
company. Managers may oversee a department and the people who work in it. In some cases,
the manager is in charge of the whole business.
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Who is entrepreneur?
The term entrepreneur is not only limited to founders of business firms; but can be
applied to the operators of family-owned firms, franchisees, and owner-managers who
have bought out the founders of existing firms. This definition excludes salaried
managers of larger corporations, even though sometimes described as entrepreneurs,
because of their flair for innovation and willingness to accept risk.
One of the examples of entrepreneurial ventures is Sergey Brin and Larry Page, the
founders of Google. If success is having your firm’s name outstanding, then these
two individuals can without question claimed to be successful. Google has clearly
been a phenomenal success, with a total stock value of over $140 billion at the end of
2006.
But while few of us can relate to Brin and Page’s level of success, as their experience
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An Integrated Definition
• Entrepreneurship
▫ A dynamic process of vision, change, and creation.
Requires an application of energy and passion towards the creation and implementation of
new ideas and creative solutions.
▫ Essential ingredients include:
The willingness to take calculated risks—in terms of time, equity, or career.
The ability to formulate an effective venture team; the creative skill to marshal needed
resources.
The fundamental skills of building a solid business plan.
The vision to recognize opportunity where others see chaos, contradiction, and confusion.
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Concept of Entrepreneurship
TYPES OF ENTREPRENEURS
Types of Entrepreneurs
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TYPES OF ENTREPRENEURS
Types of Entrepreneurs
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TYPES OF ENTREPRENEURS
Types of Entrepreneurs
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TYPES OF ENTREPRENEURS
Types of Entrepreneurs
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TYPES OF ENTREPRENEURS
Types of Entrepreneurs
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TYPES OF ENTREPRENEURS
Types of Entrepreneurs
OTHER CLASSIFICATIONS
6)ACCORDING TO GENDER AND AGE
▫ Man entrepreneurs
▫ Women entrepreneurs
▫ Young entrepreneurs
▫ Old entrepreneurs
▫ Middle-aged entrepreneurs
7)ACCORDING TO AREA
▫ Urban entrepreneurs
▫ Rural entrepreneurs
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TYPES OF ENTREPRENEURS
Types of Entrepreneurs
8)ACCORDING TO SCALE
▫ Large scale entrepreneurs
▫ Medium scale entrepreneurs
▫ Small scale entrepreneurs
often said that “economy is the effect for which
▫ Tiny scale entrepreneurs entrepreneurship is the cause". The development of
9)OTHERS economy is usually associated with its industrial
development.
▫ Spiritual Entrepreneur
▫ Social entrepreneurs An entrepreneur is a person who organizes the factors of
productions - land, labour and capital, and establish a
▫ Edupreneurs business venture and carries out the operations in the
business in a profitable manner.
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Entrepreneurial Competencies
– Bird (1995)
“Total ability the entrepreneur to perform this
role successfully. Several studies have found
positive relationship between existences of
competencies and venture performance”.
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Entrepreneurial Competencies
1.Personal Entrepreneurial competencies - the personal characteristics of an
individual who possess to perform the task effectively and efficiently, they
include
a) Initiative - The entrepreneur
▫ able to take actions that go beyond his job requirements and to act faster.
▫ always ahead of others and able to become a leader in the field of business.
▫ does things before being asked or compelled by the situation and acts to
extend the business into new areas, products or services.
b) Sees and acts on opportunities - An entrepreneur
▫ always looks for and take action on opportunities.
▫ sees and acts on new business opportunities and
▫ seizes unusual opportunities to obtain financing, equipment, land, workspace
or assistance.
c) Persistence - An entrepreneur
▫ able to make repeated efforts or to take different actions to overcome an
obstacle that get in the way of reaching goals.
▫ Takes action in the face of a significant obstacle.
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Entrepreneurial Competencies
1.Personal Entrepreneurial competencies - the personal characteristics of an
individual who possess to perform the task effectively and efficiently, they
include (Cont’d)
d) Information Seeking - An entrepreneur
▫ able to take action on how to seek information to help in achieving business
objectives or clarify business problems.
▫ do personal research on how to provide a product or service.
▫ seek information or ask questions to clarify what is wanted or needed.
▫ personally undertake research and use contacts or information networks to
obtain useful information.
e) Concern for High Quality of Work - An entrepreneur
▫ acts to do things that meet certain standards of excellence that gives him
greater satisfaction.
▫ states a desire to produce or sell a top or better quality product or service.
▫ compare own work or own company’s work favourably to that of others.
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Entrepreneurial Competencies
1.Personal Entrepreneurial competencies - the personal characteristics of an individual who
possess to perform the task effectively and efficiently, they include (Cont’d)
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Entrepreneurial Competencies
l) Persuasion - Entrepreneurs
▫ with this competency successfully pursue others to perform the activities effectively and
efficiently.
▫ can persuade or influence others for mobilizing resources, obtaining inputs, organizing
productions and selling his products or services.
m) Use of Influence Strategies- An entrepreneur
▫ is able to make use of influential people to reach his business goals.
▫ with this competency influence the environment (Individuals/Institution) for mobilizing resources
organizing production and selling goods and services to develop business contacts.
n) Monitoring - Entrepreneurs with this competency normally monitor or surprise all the
activities of the concern to ensure that the work is completed by maintaining good quality.
o) Concern for Employee Welfare - Entrepreneurs with this competency take action to
improve the welfare of employees and take positive action in response of employee’s
personal concerns.
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Venture Initiation and success Competencies Vignan Institute of Technology and Science
Entrepreneurial Competencies
In addition to personal competencies
Entrepreneur must also possess the competencies required to launch the enterprise and for its
growth and survival. It is further divided into two categories of competencies:
i. Enterprise launching competencies
ii. Enterprise management competencies
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Entrepreneurial Competencies
i. Enterprise launching competencies (Cont’d)
•Competency to develop a business plan
-To identify how a business plan helps the entrepreneur.
-To recognize how a business plan should be organized.
-To identify and use the mechanisms for developing a business plan.
•Competency to obtain technical assistance
-To prepare for using technical assistance.
-To select professional consultants. A business plan is
-To work effectively with consultants. a written description of business's future.
a document that tells what is planned to do and
how one planned to do it.
It’s “also a road map that provides directions so a business can plan its future and helps it
avoid bumps in the road.”
A business plan, as defined by Entrepreneur, is a “written document describing the
nature of the business, the sales and marketing strategy, and the financial
background, and containing a projected profit and loss statement.” However,
business plan can serve several different purposes
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Venture Initiation and success Competencies Vignan Institute of Technology and Science
Entrepreneurial Competencies
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Entrepreneurial Competencies
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Entrepreneurial Competencies
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Enterprise Management Competencies Vignan Institute of Technology and Science
Entrepreneurial Competencies
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Enterprise Management Competencies Vignan Institute of Technology and Science
Entrepreneurial Competencies
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Enterprise Management Competencies Vignan Institute of Technology and Science
Entrepreneurial Competencies
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Enterprise Management Competencies Vignan Institute of Technology and Science
Entrepreneurial Competencies
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Enterprise Management Competencies Vignan Institute of Technology and Science
Entrepreneurial Competencies
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▫ One need to be able to accurately estimate and build financial statements and to
understand them.
▫ With gained skills, one will need to be able to analyze financial statements,
looking at trends and indicators and what those all mean to your business.
▫ Financial reports provide key indicators and information on the business’ financial
health…there is a wealth of information in the financial statements.
▫ Other parties, partners and financial institutions will be looking at you and your
organization’s ability to manage finances.
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Source: Entrepreneurship Development and Small Business Enterprises (3rd Edition By Poornima M., Charantimath
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Holland (1985: 20) states, in his theory of vocational choice, that the interaction of work
environment and personality may affect performance in a career. Specifically, higher levels
of fit between the personality and work environment characteristics will result in higher
performance in that role.
Van Vuuren (1997:3) agrees that entrepreneurial performance goes hand in hand with
entrepreneurial achievement or results to the realising of set entrepreneurial goals.
This construct can be presented as: firstly, an increase in productivity; secondly, the increase
in the number of employees employed, which implies the expansion of the business; thirdly,
the net value of the business; fourthly, a core aspect in entrepreneurship, namely the
increase in profitability; and finally, the completion of the first market-related transactions.
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McClelland (1961: 40) similarly argues that need for achievement will be
related to successful performance in an entrepreneurial role. Entrepreneurs
who are high in achievement motivation are more likely to overcome obstacles,
utilise resources for help, compete and improve their skills. Therefore, one
would expect to find differences in achievement motivation in high-
performance entrepreneurs versus low performance entrepreneurs.
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Source: Entrepreneurship Development and Small Business Enterprises (3rd Edition) By Poornima M., Charantimath
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Another important aspect that can be associated with motivation is a need for achievement. The
concept of need for achievement (nAch) was formulated in the 1950s (McClelland, Clark, Roby &
Arkinson, 1958: 11).
McClelland and his colleagues argued that high-nAch people are more likely than low-nAch people to
engage in energetic and innovative activities that require planning for the future and entail an
individual’s responsibility for task outcomes, they also argued that high-nAch people should also
prefer tasks that involve skill and effort, provide clear performance feedback and hold moderate
challenge or risk.
The author based his hypothesis on individual observation, and proposed the following logical
psychological supposition: The more an individual achieves, the more he/she would like to achieve.
This achievement is tied to specific action behaviour. The author therefore argues that the motives are
rational or can be rationally deduced from the completion of certain actions.
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Antonites (2003) therefore believes that motivation on the one hand and
achievement motivation on the other play a vital role throughout the
training aimed at providing entrepreneurial as well as business skills.
McClelland and Winter (1971) in Henry et al. (2003: 35) point out that
training courses designed to develop achievement motivation have
significantly improved small business performance.
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Entrepreneurial skills
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Entrepreneurial skills
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Entrepreneurial skills
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Opportunity identification:
Timmons and Spinelli (2004) point out that not all ideas are opportunities. They
distinguish the two by indicating that opportunities must be:
· Durable (long-lasting in the market and industry);
· Timely (during the period when the window of opportunity stays open);
· Attractive (there must be a demand in the market for the product/service);
and
· Able to add value (add benefits, convenience to customers’ lives).
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Nieman and Bennet (2006) mention that there are certain functional
areas in a business which are essential for any entrepreneur. These
areas include: general management, marketing management, financial
management, human resource management, production and operations
management, corporate communications management, information
management and e-business, and purchasing and materials management.
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Entrepreneurial Education Model (E/E model)
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The Education for improved Entrepreneurial
Performance Model (E for E/P model)
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The improved entrepreneurship training model
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• Phases include
▫ Stimulatory Phase
▫ Support Phase
▫ Sustenance Phase
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Stimulation phase
• Involves implementing stimulatory activities for creating interest and
awareness among potential entrepreneurs
• Laying foundation for the emergence of entrepreneurship in society
• Activities such as
▫ Planned publicity on opportunities to become entrepreneur
▫ Entrepreneurial education
▫ Counselling, Motivational training
▫ Identification of potential entrepreneurs
▫ Providing guidance in selection of product/service
▫ Preparing Project reports
▫ Creating forums, recognition and rewarding existing entrepreneurs
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Support Phase
• Involves implementation of support activities that help in new venture
creation
• Nurture and promote
• Activities such as
▫ Registration of enterprise
▫ Prototype development
▫ Finance agreements
▫ Land, shed, power and common facility centre
▫ Management Consultancy services, marketing support
▫ Guidance for selecting plant and machinery, getting approvals and licenses
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Sustenance phase
• Implementation of sustenance activities in the continuous and efficient
function of enterprise
• Activities such as
▫ Modernization
▫ Diversification
▫ Expansion
▫ Getting additional financial support
▫ Research and development
▫ Support for survive, develop and grow after it is set up industry
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