Entrereneurship: Development

ENTRERENEURSHIP
DEVELOPMENT
SSIPMT/SAPNA SHARMA/ED/MBA 1
ENTREPRENEUR- Chapter
Scheme
◼ Introduction
◼ Concept
◼ Definition
◼ Nature/Characteristics
◼ Types of risk an entrepreneur may face
◼ Functions
◼ Role
◼ Types & Classification
◼ Women Entrepreneurs
◼ Entrepreneurs Vs Managers
INTRODUCTION
◼ Since an Individual has 3 career options-
✓ to work for someone else
✓ To be self employed
✓ To be an entrepreneur
◼ Important factor in economic development
◼ First & foremost catalyst for change
◼ As a tool for income generation & employment
REASONS OF POPULARITY
◼ Provides numerous opportunities for self-

expression & self realisation for doing
something new
◼ Offers growth & self development
◼ More monetary rewards
◼ Decision making power
◼ Satisfactory rewards
CONCEPT
◼ The word’s derivation is from French word
‘entreprendre’ which means ‘to undertake’.
◼ Previously applied to military expeditions (early
16th century), then in context to
architects,contractors etc (18th century), then as
an intermediate between capital & labour (19th-
20th century), & at last as emerging class called
entrepreneur class (in 21st century).
Entrepreneurs...
◼ 14th century...Tax contractors...bore the risks of
collecting taxes. If they collected more than the
fee...they kept the rest as profit.
◼ Called the “change agents” of progressive
economies
Entrepreneurship
◼ Entreprendre...17th century French...the
individual who undertook the risk of a new
enterprise... “undertakers”.
◼ They were “contractors” who bore the risks of
profit or loss
◼ Examples: soldiers of fortune, adventurers,
builders, merchants and funeral directors
Entrepreneurs...
◼ Adam Smith...The Wealth of Nations: spoke of
the “enterpriser” as an individual who
undertook the formation of an organization for
commercial purposes
◼ A. Smith...mentioned “role of
industrialist...,person with unusual foresight who
could recognize potential demand for goods and
services”
Entrepreneurs...
◼ John Stuart Mill...describes an entrepreneur as a
business founder
◼ Recognized entrepreneurship as central to economic
theory
◼ Carl Menger...Principles of Economics: “Economic
change does not arise from circumstances but from an
individual’s awareness and understanding of those
circumstances
Entrepreneurs...
◼ In 19th century entrepreneurs were:
◼ risk takers
◼ decision makers
◼ aspired to wealth
◼ endured commensurate losses
◼ gathered and managed resources to create new

enterprises
Entrepreneurship
◼ Joseph Schumpeter...20th century talks about
“creative destruction” whereby established ways
of doing things are destroyed by the creation of
new and better ways of getting things done
◼ Described it as a process and entrepreneurs as
innovators who use process to shatter the status
quo through new methods...
Entrepreneurs...
◼ Are not equal to inventors...inventor might only
create anew product, whereas an entrepreneur
will gather resources, organize talent, and
provide leadership to make it a commercial
success
◼ Peter Drucker...”Resources, to produce results,
must be allocated to opportunities rather than to
problems...
DEFINITIONS
◼ The entrepreneur can be defined as Cantilllon A person bearing
‘one who recognizes & manages only 1755 risk
enterprise especially involving high
risk’. Say Agent combinig
◼ An entrepreneur is one who creates a
1816 all fops
new business in the face of risk &
Knight Recipient of pure
uncertainty for the purpose of
achieving profit & growth by
1921 profits
identifying significant opportunities &
Schumpter Ability to identify
assembling the necessary resources to
capitalize on them.
1934 new opportunity
◼ As per different social scientist- like Relentless pursuit
economist, psychologist, sociologists, 1985 Stevenson
management experts of opportunity
As per different authors- like Gartner Actions taken to
◼
R.CANTILLON, J.B.SAY, 1988 create org.
J.A.SCHUMPETER, P.F.DRUCKER..
Bygrave & Characteristic of
1991 entrepreneur
Hofer
process
ENTREPRENEURIAL
NATURE/CHARACTERISTICS/DIMENSIONS
◼ An entrepreneur should be one who bears, innovates or imitates

& organizes the business
➢ Desire for responsibility
➢ Preference for moderate risk
➢ Confidence to succeed
➢ Immediate desire for feedback
➢ High level of energy & commitment
➢ Future orientation
➢ Skill at organizing
➢ Value of achievement over money
➢ Tolerance for ambiguity & flexibilty
➢ Locus of control
➢ Other important traits
TYPES OF RISK
Financial
Risk
Family &
RISKS Career Risk
Social Risk
Psychological
Risk
Type of Start ups
◼ Lifestyle firms: A privately held small venture that
supports the owners & usually does not grow or takes
several years for little opportunity for significant
growth.
◼ Foundation Company: Formed from extensive R & D.
This rarely goes public, draws the interest of private
investors & can grow in 5-10 years.
◼ High potential venture: Receives the greatest
investment interest and publicity. The company starts
like a foundation company but its growth is far more
rapid
FUNCTIONS OF AN
ENTREPRENEUR
◼ A successful entrepreneur recognizes the commercial potential
of a product, designs operating policies in marketing, production,
product development & the organization structure.
◼ Function of Innovation
◼ Assumption of Risk
◼ Managerial Function of Organization & Managemant
◼ Business Decisions
Thus,the entrepreneur is an institution himself & he perfomes Various

functions related with organization development& management
control.
ROLE OF ENTREPRENEUR
◼ Most important factor in the economic development.
◼ Organizes & utilizes the various factors & set
productive machinery in action.
◼ As per Prof. Schumpter, supply of entrepreneur
depends on the rate of profit & social climate.
◼ Innovator with a certain achievement motive
◼ In ensuring the change required by the development
process
◼ Mobilises capital source to have a command over
FOP’s.
Potential Drawbacks
◼ Uncertainty of income
◼ Risk of loosing your entire investment
◼ Lack of banking and communication facilities
◼ Long hours and hard work
◼ Lower quality of life until the business gets establish
◼ High level of stress
◼ Complete responsibility
◼ Unfavorable political and eco system
◼ Improper educational system
◼ Small industries are neglected
Forces driving Entrepreneurship
◼ Entrepreneurship as heroes
◼ Entrepreneurial education
◼ Demographic and economic factors
◼ Shift to service economy
◼ Independent and self sustaining lifestyle
◼ Technological advancement
◼ International opportunities
ENTREPRENEUR Vs MANAGER
◼ Very often Entrepreneur & manager are used interchangeable
terms, but strictly speaking these terms are different.
◼ Entrepreneurial role is Played by Chief Executive teams & Top
level executive team Whereas Managerial Role by Middle & joint
Level executives.
◼ Management involves combining or coordinating resources to
produce whereas entrepreneurship involves combining to initiate
changes in production.
◼ As per Joseph Schumpter, manager is one who deals with day to
day affairs of a going concern. But an entrepreneur attempts to
change the factor combinations & thus increases productivity &
profits.
Difference
Parameter Entrepreneur Manager
Goal Management Starts a new venture for personal use Renders service in an already
existing set up
Status Owner Employee/servant
Risk Bears all risk and responsibilities Bears no risk or responsibility
Rewards Gets uncertain & irregular profit & Receives fixed & regular salary
may even be negative for service rendered & never
negative
Innovation Innovator, change agent & meets Executes & translates existing
changing customer needs plans of others
Qualification To possess high qualities & To possess distinct

qualifications (high achievement qualifications (knowledge in
motive etc) management theory)
Continuity Discontinuous Continuous
To Produce Result of 2 days, this month, year etc Result of tomorrow, next year
Result etc
TYPES
◼ As per Clarence Danhof (on the basis of economic development)
❖ Innovative/aggressive entrepreneur (ex. new car models )
❖ Imitative/Adoptive entrepreneur (ex. Soft drink, ready made clothes)
❖ Fabian entrepreneur (offering discounts, free material)
❖ Drone entrepreneur (struggle to exist, not to grow)
❑ As per Arthur H. Cole(on the basis of function & characteristics)

❖ Empiric (family business)
❖ Rational (mobile manufacturers)
❖ Cognitive (cold storage, transportation)
CLASSIFICATION
TYPES OF
BUSINESS
Business
Entrepreneur
Agricultural Trading Corporate Industrial Service Retail
Horti
Dairy Forestry
Culture
Tiny Small Medium Large
USE OF TECHNOLOGY
Technical Non Technical Professional High Technology Low Technology
MOTIVATION
Pure Induced Motivated Spontaneous
DEVELOPMENT
First Generation Modern Classical
GROWTH
Growth Super Growth
AREA
Urban Rural
GENDER
M/F
Young Old Middle
Others
◼ Skilled
◼ Non skilled
◼ Inherited
◼ Forced
◼ National
◼ International
◼ Immigrant
◼ Social
◼ serial
WOMEN ENTREPRENEUR
◼In 1988, for the first time the definition of
Women entrepreneurs’ enterprise was evolved.
Topics to be covered :
◼ Concept
◼ Functions/ role
◼ Growth
◼ Problems faced
◼ Remedies to solve
◼ Selection of industry
◼ Development & role of entrepreneurial association
◼ Success story
ENTREPRENEUR LEADERS
The Builder of Indian Industry
J R D TATA
◼ Dhirubhai Ambani alias Dhirajlal
Hirachand Ambani was born on
December 28, 1932, at Chorwad,
Gujarat, into a Modh family. His
father was a school teacher.
Dhirubhai Ambani started his
entrepreneurial career by selling
"bhajias" to pilgrims in Mount
Girnar over the weekends.
◼ After doing his matriculation at the age of 16, Dhirubhai
moved to Aden, Yemen. He worked there as a gas-station
attendant, and as a clerk in an oil company. He returned
to India in 1958 with Rs 50,000 and set up a textile
tradingcompany.
◼ Assisted by his two sons, Mukesh and Anil, Dhiru Bhai
Ambani built India's largest private sector company,
Reliance India Limited, from a scratch. Over time his
business has diversified into a core specialisation in
petrochemicals with additional interests in
telecommunications, information technology, energy,
power, retail, textiles, infrastructure services, capital
markets, and logistics.
N. R. Narayana Murthy
◼ An Indian IT chief who's really made it

big without dropping his ethical
precepts by the wayside is Nagawara
Ramarao Narayana Murthy, Chairman
of Infosys.
◼ Born in 1946, Murthy's father was a
schoolteacher in Kolar district,
Karnataka, India. A bright student,
Murthy went on to acquire a degree in
Electrical Engineering from Mysore
University and later studied Computer
Science at the IIT, Kanpur, India.
◼ The Infosys legend began in
1981 when Narayana
Murthy dreamt of forming
his own company, along
with six friends. There was
a minor hitch, though-he
didn't have any seed money.
Luckly, like many Indian
women who save secretly
without their husband's
knowledge, his wife Sudha-
then an engineer with Tatas-
had saved Rs 10,000. This
was Murthy's first big break.
Infosys.
◼ The decade until 1991 was a tough period
when the couple lived in a one-room house.
The second break came in 1991 when Indian
doors to liberalization were flung open…
Murthy grabbed the opportunity with both
hands and has never looked back ever since.
Today, Infosys is the first Indian company to
be listed on the US NASDAQ.
It provides employment to 85,000 people.
Food king
◼ When 27-year old Sarathbabu
graduated from the Indian
Institute of Management,
Ahmedabad, he created quite a
stir by refusing a job that
offered him a huge salary. He
preferred to start his own
enterprise -- Foodking Catering
Service -- in Ahmedabad.
The Motivating Force of Food King
Requirements to be an entrepreneur
◼ Innovation,
◼ Creativity
◼ Risk Taking
◼ Organization
Creative as a prerequisite to
innovation
◼ Creativity- is “the ability to bring
something new into existence
◼ Innovation - is the process of doing
new thing.
The Creative Process
◼ Idea Germination
◼ Preparation
◼ Incubation
◼ Illumination
◼ Verification
The difference between invention
and innovation is:
◼ Invention - is the creation of new products,
processes, and technologies not previously
known to exist.
◼ Innovation - is the transformation of creative
ideas into useful applications by combining
resources in new or unusual ways to provide
value to society for or improved products,
technology, or services.
Elements in the Innovation
Process
◼ Analitical Planning
◼ Organizing Resources
◼ Implementation
◼ Commercial Application
ENTREPRENEURSHIP
◼ It is an important factor of industrial development of a
country.
◼ This concept is a complex phenomenon, broadly it relates
to the entrepreneur, his vision & its implementation.
◼ Therefore, it refers to a process of action an entrepreneur
undertakes to establish his/her enterprise.
◼ BUT,,, the degree & quality of entrepreneurship differ
from entrepreneur to entrepreneur.
◼ Is a dynamic process of creating incremental wealth. This
wealth is created by individuals who assume the major
risks in terms of equity, time and career commitment of
providing value for some product or service
◼ The entrepreneur must somehow infuse value to the
product or service.SSIPMT/SAPNA SHARMA/ED/MBA 45
CONCEPT/APPROACHES
THEORIES
Entrepreneurship is an evolved thing. With the advancement of
science and technology it has undergone metamorphosis change
and emerged as a critical input for socio-economic development.
Various writers have developed various theories on
entrepreneurship and popularized the concept among the
common people. The theories propounded by them can be
categorized as under-
◼ Sociological theories
◼ Economic theories
◼ Cultural theories
◼ Psychological theories
Explanation
◼ Sociological Theory: It is a process of role performance. Entrepreneurs are
expected to be governed by the wishes of the society, customs, ethics etc.
CONTRIBUTORS- Thomas Chocharan, Peter Marris etc
◼ Economics Theory: Process of initiating a new venture, organizing the

resources it requires & assuming the risk it entails. Entrepreneurship and
economic development are interdependent. Economic development takes
place when a country' real rational income increases overall period of time
wherein the role of entrepreneurs is an integral part.
CONTRIBUTORS-Adam Smith (1776),JB Say(1803), J.S.Schumpter(1934),
P.F.Drucker
According to Schumpeter an entrepreneur is one who perceives the opportunities
to innovate, i.e. to carry out new combinations or entreprise. In his views, the
concept of new combination leading ti innovation covers the following 5 cases-
➢ 1- The introduction of new goods, that is the one with which consumers are not
yet familiar, of a new quality.
➢ 2- The introduction of new method of production
➢ 3- The opening of new market
➢ 4- the conquest of new source of supply of raw material
➢ 5-The carrying out of new organization
THEORIES conttdd…
◼ Cultural Theory: Advocates of cultural theories point out that
entrepreneurship is the product of culture. Entrepreneurial
talents come from cultural values and cultural system embedded
into the cultural environment.
Hoselitz explains that the supply of entrepreneurship is governed by cultural factors, and
culturally minority groups are the spark-plugs of entrepreneurial and economic
development. in many countries, entrepreneurs have emerged from a particular socio-
economic class. He emphasized the role of culturally marginally groups like Jews and
the Greeks in medieval Europe, the Chinese in south Africa and Indian in east Africa
in promoting economic development.
◼ Psychological Theory: It center's around the psychological

characteristic so the individual in a society. Psychological
characteristics affect the supply of entrepreneurs in the society.
Mc Clelland states that it is the need for achievement which drives people
towards entrepreneurial activities. Individuals with High achievement motive
tend to take interest in situations of High risk.
DEFINITION
❖ Higgin B: It is meant for the function of seeking investment & production
opportunity, organizing an enterprise to undertake a new production
process, raising capital, hiring labour, arranging the supply of RM, finding
site, introducing a new technique & commodities, discovering new sources
of RM & selecting top managers of day to day operations of enterprise.
❖ J.A.Schumpter: It is essentially doing things that are not generally done in

the ordinary course of business routine.
❖ P.F.Drucker: It occurs when resources are redirected to progressive

opportunities not used to ensure administrative efficiency.
❖ A.H.Cole; It is the purposeful activity of an individual or group of

associated individuals undertaken to initiate maintain profit by production or
distribution of economic G/S.
❖ Thus, It is the propensity of mind to take calculated risk with confidence to
achieve a predetermined business or industrial objective.
CHARACTERISTICS OF ENTREPRENEURSHIP
◼ Innovation
◼ A function of high achievement
◼ Organization building function
◼ A function of group level pattern
◼ A function of managerial skills & leadership
◼ A function of status withdrawal
◼ Gap filling function
◼ A function of religious belief
◼ Dynamic process
◼ Decision making, skillful management, accepting
challenges
DIMENSIONS
Individual
Characteristics
New venture
Environment Organization
creation
Constraints
BENEFITS
◼ Opportunity to create your own destiny
◼ Opportunity to make a difference
◼ Opportunity to reach full potential
◼ Opportunity to reap impressive profits
◼ Opportunity to contribute to society & be recognized
for the efforts
◼ Opportunity to make avocations their vocation
◼ Opportunity for Economic & social benefits
-creating innovation, fuelling economic growth,
identifying ownership opportunities ,enhancing welfare
amenities
BARRIERS
BARRIERS
ENVIRONMENTAL FINANCIAL PERSONAL SOCIETAL
CAUSES DRAWBACKS
ENTREPRENEURSHIP
STIMULANTS
◼ Entrepreneurial education
◼ Entrepreneurs are heroes
◼ Demographic & economic factors
◼ Technological advancements
◼ Increased focus on capital formation
◼ Supportive government programmes
◼ E-commerce & WWW.
◼ International opportunities
◼ Availability of required training & input
◼ Business & research
◼ To make an environment for innovation
CULTURAL DIVERSITY
◼ Young entrepreneurs
◼ Women entrepreneurs
◼ Minority entrepreneurs
◼ Part-time entrepreneurs
◼ Home-based entrepreneurs
◼ Family business
◼ Copreneurs
◼ Corporate castoffs
◼ Corporate dropouts
HOW TO AVOID PITFALLS
◼ Know your business in depth
◼ Develop a solid business plan
◼ Manage financial resources
◼ Understand financial statements
◼ Learn to manage people effectively
◼ To keep in tune with yourself
MODELS ON
ENTREPRENEURSHIP
◼ A Conceptual model of entrepreneurship by
John. J. Kao
◼ Integrated model of entrepreneurship by Abdul
Aziz Mahmud
CONCEPTUAL MODEL
◼ As per Kao, a conceptual model of entrepreneurship can be a
relativity among various factors. It was generated due to the
limitations of some of the definitions.
THE
PERSON
THE ENTREPRENEUR-
THE TASK
ORGANIZATION -SHIP
THE
ENVIRONMENT
ANALYTICAL FRAMEWORK
◼ THE PERSON: personality, skill, experience, motives,
psychological preferences
◼ THE TASK: perceiving opportunity, marshalling
resources, providing leadership
◼ THE ENVIRONMENT: availability of resources,
infrastructure, competitive pressures, social values,
rules, state of technology
◼ THE ORGANIZATION: structure, rules, policies,
culture, HR system, communication system
Integrated Model of
Entrepreneurship
◼ Focus on Political, Organizational, Economic,
Sociological & psychological factors.
◼ The Entrepreneurial Behavior is effected by
External factors as well as Internal factors.
◼ Various activities like Training program,
developmental firms, industrial estate, marketing
aids, labour relations services, industrial research
services etc, helps in generating output.
ENTREPRENEURIAL DECISION
◼ This decision occurs despite recession, inflation, high
interest rates, lack of infrastructure, economic
uncertainties etc. Each of these decisions is a personal
human process which although is unique, have common
characteristics.
◼ The impulsive motives are the forces behind these
decisions.
◼ The decision to start a new company occurs when an
individual perceives that it is both desirable & possible.
◼ The perception is desirable result from an individual’s
culture, teachers, sub culture, family etc.
DECISION FOR A POTENTIAL
ENTREPRENEUR
Form new enterprise
DESIRABLE
•Change from present cultural
Life style Sub cultural
•Work environment Family
•Disruption Teachers
Peers
POSSIBLE
Government
Background
Marketing
Finance
Role models
ENTREPRENEUR Vs
ENTREPRENEURSHIP Vs
ENTERPRISE
CONCEPT
ENTREPRENEUR ENTREPRENEURSHIP ENTERPRISE

(person) (process of action) (object)
ENTREPRENEUR Vs ENTREPRENEURSHIP
Refers to a person Refers to a process
Visualizer Vision
Able Ability
Creator Creation
Organizer Organization
Innovator Innovation
Decision maker Decision
Administration Administration
Motivator Motivation
Analysizer Analysis
Leader Leadership
Human Humanity
Planner Planning
Conttddd….
Character Characteristics
Believer Belief
Marketier Marketing
Director Direction
Programmer Action
Investor Investment
Empowerer Empowerment
ENTREPRENEUR & ENTERPRISE
◼ Entrepreneur is one who provides the 4th FOP, namely
‘enterprise’.
◼ Enterprise may be defined as an undertaking or
adventure involving uncertainty & risk & requiring
innovations.
◼ It serves as the framework within which decisions
concerning what to produce, how much to produce,
when to produce & how to produce are taken by
entrepreneurs / managers.
◼ The success of an enterprise depends upon several
internal & external factors to the business world & some
of these factors may be under the control of the
entrepreneur.
ENTREPRENEURIAL PROCESS
◼ Identify an opportunity
◼ Establish vision
◼ Persuade others
◼ Gather resources
◼ Create new venture
◼ Change/adapt with time
INTRAPRENEUR
◼ In the era of globalization, large organization are
developing new products or services and create
innovative technology and system.
◼ The term intrapreneur was coined in America in
late 70’s.
◼ Intrapreneur is also called as Corporate
entrepreneur.
◼ The concept was promoted by G. Pinchot III
Definition
◼ Those who take hands of responsibility for
creating innovation of any kind within an
organization.
◼ The intrapreneur may be creator or inventor but
is always the dreamer who figures out how to
turn an idea into a profitable reality.
◼ Intrapreneur is a person who promote creativity
and innovation within a large enterprise.
◼ Example: Don Estrige an employee at IBM
posted at Florida far way from his bosses at IBM
HQ headed the creation of PC’s.
◼ Paul Scangetti an engineer at Intel came up with
a concept of a hand held computer aimed at
helping people to record & plan the fitness and
nutrition popularly known as Vivonic Fitness
Planner.
Evolution of Concept
◼ In 70’s, in America, several senior executives of
big corporations left their jobs to start their own
small businesses because the top bosses in these
corporation were not receptive to innovative
ideas. These people turned entrepreneur and
posed a threat to the corporations. This type of
entrepreneur were known as Intrapreneur
◼ An American management expert, G. Pinchot
III, wrote in his famous book “ Intrapreneuring”
in 1985, as Intrapreneur are the person who
resigned from their well paid executive positions
to launch their own venture.
◼ Pinchot suggested that well established company
should learn to make use of the entrepreneurial
talents within to avoid stagnation & decline.
Features
◼ It is an entrepreneurship which takes place
within an existing business.
◼ It is the development within a corporation of
internal markets.
◼ Internal managers & employees are responsible
for it through their innovative work.
◼ It is promoted in the form of autonomous or
semiautonomous business units that produce
products, services or technologies in a unique
way.
What Intrapreneurs Do
◼ Are visionary and flexible
◼ Create management options
◼ Encourage teamwork
◼ Encourage new ideas
◼ Long term horizon
◼ Multi discipline teamwork approach
◼ Volunteer programmer
◼ Desire support from top management
Stages
◼ Solo (initial innovative vision & not shared untill putted in
proper shape.)
◼ Networking (share with trusted colleagues in organization,
get informal feedback)
◼ Boot Lagging (on bash of positive feedback, intrapreneurs
act as a leader of his informal team & also examine capabilities of
team mamber)
◼ Creating formal group (If idea approved by organization,
then formal refinement happens)
Process
◼ Problem definition
◼ Coalition building
◼ Resource mobilization
◼ Project execution
◼ Venture completion
Classification
◼ Innovating Intrapreneur
◼ Technical Intrapreneur
◼ Marketing Intrapreneur
◼ Manufacturing Intrapreneur
◼ Financial Intrapreneur
◼ Service Intrapreneur
◼ Other Intrapreneur in various management
activities.
Factor Traditional Manager Entrepreneur Intrapreneur
Primary motive Promotion & Independence, the Independence, the

Traditional corporate chance to be creative & chance to be creative &
rewards the opportunity to the opportunity to
make more money move towards
organizational &
personal successes
Time Focus Short term (to meet Survival and achieving In between traditional
budgets) long term (5+ year ) managers and
growth entrepreneurs
Activity Amount of Delegation, Do it oneself, extreme, Do it oneself,
risk status conservative, not concerned about moderate, not
concerned about status status concerned about status
Failure & mistakes Minimizes mistakes & Deals with mistakes Reduces risky activities
decisions surprises , agrees with and failures, follows a ready, gets the help of
upper management personal dream others to achieve
dreams
Constituencies served Others (upper Oneself & customers Oneself, customers,
management & organization
customers)
Entrepreneur Intrapreneur
An owner of his enterprise Not the owner, but a key worker
Independent Partially independent
Raises financial from various sources Does not own responsibility to raise capital
May not be educated & skilled Educated & skilled person
Organizer Strategist
Strives to earn maximum profit Strives to excel in all fields
Bears full risk of business Does not bear full risk
Promoter Operates & develops the business
Visualizer Pragmatic visionary, innovator & creative
Direct participation in al activities Direct but restricted participation
Objective is money, freedom to take Objective freedom to take decisions,
decisions, chance to innovate. corporate rewards, promotion rewards.
Factors Governing
Intrapreneurial success
◼ Appropriate rewards & punishment
◼ Recruitment of interested & enthusiastic
personnel.
◼ New ventures & established business with a
differences.
◼ Internal product competition & corporate
bureaucracy.
Entrepreneurial Culture
◼ Culture includes laws, morals, knowledge, values,
character, qualities, skills, and also tangibles such as
clothing & furniture etc
◼ Entrepreneurship realises that culture brings people
together. It makes a great difference in the attitude of
business man and managers.
◼ Entrepreneurial culture implies a set of values, norms &
traits that are conducive to the growth of
entrepreneurship.
◼ A highly cultured entrepreneur will show concern for
other people.
Sub Cultures of Entrepreneurship
◼ Culture of a business organization
◼ Business ethics
◼ Productivity culture
◼ Total quality culture
◼ Cultural change
◼ Leaders
◼ Corporate Values
Organizational Culture: A comparison
Dimension Traditional Organization Entrepreneurial Organization
Strategy Status quo, Conservative Evolving, Futuristic
Productivity Short term focus, profitability Short & long term, multiple criteria
Risk Averse, Punished Emphasized & rewarded
Opportunity Absent Integral
Leadership Top down, autocratic Culture of empowerment
Power Hoarded Given away
Failure Costly OK: Teaches a lesson
Decision making Centralised Decentralised
Communication Chain of command, by the book Flexible, facilitates innovation
Structure Hierarchal Organic
Creativity Tolerated Priced & worshiped
Efficiency Valued, Accountants are heroes Valued if it helps realize overall goals
Growth of Entrepreneurship in
India
◼ Entrepreneurship in Pre independence Era (metal
handicraft, caste based division, karkhanas- corah(bengal),
dhotis(ahmedabad), silk border cloth(nagpur), shawl(kashmir)
etc, emergence of entrepreneurial class)
◼ Entrepreneurship in Post Independence Era
(support from GOI, first industrial policy in 1948,
SSIs,establishment of directorate of industries, financial
corporations, SSI corporation etc)
Role of Entrepreneur in Indian
◼ Rise in income
Economy
◼ Capital Formation
◼ Regional Development
◼ Employment Generation
◼ High standards of living
◼ Perception of market opportunities
◼ Gaining command over scarce resources
◼ Purchasing inputs
◼ Marketing the products
◼ Dealing with bureaucrats
◼ Managing customer & supplier relation
◼ Managing finance and production
◼ Introducing new production technology and products
Entrepreneurial Performance
◼ Entrepreneurial performance is a function of:
◼ Socio cultural Backgrounds of entrepreneur (SB)
◼ Motivational force (MF)
◼ Knowledge & ability of entrepreneur (KA)
◼ Financial strength (FS)
◼ Environmental variable (EV)
EP= f( SB, MF, KA, FS,EV)
Judgment of performance
◼ Gestation period: Time gap between date of
incorporation & date of commencement of
commercial production.
◼ Financial results
◼ Capacity utilization
◼ Expansion & diversification
◼ Value added by manufacturer
◼ Growth of offspring enterprises
◼ Others like sales turnover, size of employment
generated etc SSIPMT/SAPNA SHARMA/ED/MBA 87
Entrepreneurship Development
◼ Key element of economic development of a country
◼ Development of an entrepreneur means inculcating
entrepreneurial traits into a person, imparting the
required innovation, developing management &
building the entrepreneurial attitude.
◼ Process of entrepreneurial development incorporates
equipping a prospective entrepreneur with institutional
support system used for enterprise development &
sharpening his entrepreneurial competencies.
◼ Therefore ED programmes has been designed to help a
person in strengthening his entrepreneurial motive & in
acquiring skills & capabilities.
Entrepreneurship Development
Program
EDPs helps in
◼ Accelerating the entry process into the business
◼ To encourage first generation entrepreneurs

who do not have any business background
◼ To develop & strengthen & support
entrepreneurial competencies
Stages
◼ Pre training phase- Development phase- Post
training phase
Objective
◼ Enable him to take decision
◼ Understanding the procedure for setting small enterprise
◼ Broad vision about business
◼ Acquire basic management skills
◼ Source of help & support
◼ Analyse environment & select products
◼ communication
◼ Knowing the pros & cons o becoming n entrepreneur
◼ To promote the development of small & medium
enterprise
◼ To generate employment & self employment
Course content of EDP
◼ General introduction to entrepreneur
◼ Motivational training
◼ Support system & procedure
◼ fundamental of project feasibility
◼ Plant visit
Problems faced
◼ Limited manpower
◼ Lack of creativity & commitment
◼ Non availability of raw material
◼ Low industrial support
Institutions
◼ NIESBUD- National Institute for
Entrepreneurship & small business development
◼ EDII- Entrepreneurial development institute of
India
◼ SIDBI- Small Industrial development
Organization
◼ NAYE- National Alliance of Young
Entrepreneur
◼ IIC- Indian Investment Centre
◼ Others- Various public or private sector banks

Entrereneurship: Development

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ENTRERENEURSHIP

◼ Provides numerous opportunities for self-

◼ endured commensurate losses

◼ gathered and managed resources to create new

◼ An entrepreneur should be one who bears, innovates or imitates

Thus,the entrepreneur is an institution himself & he perfomes Various

Risk Bears all risk and responsibilities Bears no risk or responsibility

Qualification To possess high qualities & To possess distinct

❑ As per Arthur H. Cole(on the basis of function & characteristics)

Tiny Small Medium Large

Technical Non Technical Professional High Technology Low Technology

Pure Induced Motivated Spontaneous

First Generation Modern Classical

Growth Super Growth

Young Old Middle

◼ An Indian IT chief who's really made it

◼ Economics Theory: Process of initiating a new venture, organizing the

◼ Psychological Theory: It center's around the psychological

❖ J.A.Schumpter: It is essentially doing things that are not generally done in

❖ P.F.Drucker: It occurs when resources are redirected to progressive

❖ A.H.Cole; It is the purposeful activity of an individual or group of

ENVIRONMENTAL FINANCIAL PERSONAL SOCIETAL

ENTREPRENEUR ENTREPRENEURSHIP ENTERPRISE

Primary motive Promotion & Independence, the Independence, the

◼ To encourage first generation entrepreneurs

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