Entrepreneur, Entrepreneurship and Intrapreneur

1. HFM 505 – Entrepreneurship Development
1. Entrepreneur, Entrepreneurship and Intrapreneur
1.1 Definition of an Entrepreneur, Entrepreneurship and Intrapreneur
1.2 Concept of Entrepreneurship – McClelland, Joseph Schumpeter & Peter Drucker
1.3 Reasons for growth of Entrepreneurship
1.4 Entrepreneurial Characteristics and Skills
1.5 Types of Entrepreneurs
1.6 Entrepreneurial Failure and Pitfalls( Peter Drucker)
1.7 Difference between Entrepreneurs, Managers and Intrapreneur
1.8 Emergence of Women Entrepreneurs

2. 1.1 Definition of an Entrepreneur, Entrepreneurship and Intrapreneur
Entrepreneur: The word entrepreneur is derived from the French word ‘Entreprendre’
which means to undertake, i.e., the person who undertakes risk of a new enterprise. It first
appeared in the French language in the 16th century.
a. Richard Cantillon: An entrepreneur is a person who buys factor services at certain prices
with a view to selling its product at uncertain prices.
b. Leon Walrus: An entrepreneur is the coordinator of basic factors of production who
combines land, labour and capital. He is the fourth factor of production.
c. The New Encyclopedia Britannica: An entrepreneur is an individual who bears risk of
operating a business in the face of uncertainty about future conditions.

3. Entrepreneurship: It is a multi – dimensional task defined differently by different
authorities.
a. A. H. Cole: Entrepreneurship is the purposeful activity of an individual or a group of
associated individuals, undertaken to initiate, maintain or organize a profit – oriented
business unit for the production or distribution of economic goods and services.
b. Leon Walrus: Entrepreneurship is not itself a factor of production, but rather a fuction that
can be carried on by an agent.
c. Richard Cantillon: Entrepreneurship is a matter of foresight and willingness to assume
risks, which is not necessarily connected with the employment of labour in some productive
process.

4. Intrapreneur: This term was introduced by Gifford and Elizabeth Pinchot in 19733 as
“intra – corporate entrepreneur” and later re-coined as “intrapreneur” in 1992.
American Heritage Dictionary defines an intrapreneur “as a person within a large corporation
who takes direct responsibility for turning an idea into a profitable finished product through
assertive risk- taking and innovation”.
Intrapreneurs do not raise funds and are dependent on the entrepreneur. They do not
take risks associated with the business and operate from within the organisation.
Eventually, these intrapreneurs leave their jobs and start their own enterprises. Such
entrepreneurs pose a threat to the organisation they have left by bringing in innovative
products.

6. 1. Cowasji Nanabhai Davar ( 1814 -1873)
2. Jamshedji Nusserwanji Tata ( 1839 – 1904)
3. Shantanu Rao Kirloskar ( 1903 – 1994)
4. Rai Bahadur Mohan Singh Oberoi ( 1898 – 2002)
5. Jehangir Ratanji Dadabhoy Tata (JRD) (1904 – 1993)
6. Henning Holck Larsen ( 1907 – 2013)
7. Dr. Varghese Kurien ( 1921 – 2012)
8. Aditya Vikram Birla ( 1943 – 1995)
9. Karsenbhai Khodidas Patel ( 1944 -

8. 1. Lakshmi Mittal – Indian Steel Magnate:
2. Late Dhirajlal Hirachand Ambani aka Dhirubhai Ambani
3. Ratan Naval Tata
4. Nagavara Ramarao Narayana Murthy aka N. R. Narayana Murthy
5. Shiv Nadar
6. Azim Premji
7. Adi Burjorji Godrej aka Adi Godrej
8. Late Ramesh Chandra Agarwal

10. 9. Anand Mahindra
10. Radhakishan Damani
11. Gautam Adani
12. Hari Menon
13. Kishore Biyani
14. Baba Kalyani

12. 1. Kiran Majumdar Shaw
2. Radhika Ghai Aggarwal
3. Richa Kar
4. Ritu Kumar
5. Shahnaz Hussain
6. Vandana Luthra
7. Falguni Nayar
8. Indira Nooyi

13. 1.2 Concept of Entrepreneurship – McClelland, Joseph Schumpeter & Peter Drucker
Prof. David McClelland propounded the High Achievement Theory were he identified two
characteristics of entrepreneurship, namely, “doing things in a new and better way” and “decision –
making under uncertainty”.
He opined that people having high need for achievement were more likely to succeed as
entrepreneurs. While people with low achievement people work harder for money or external
incentives, high achievement people are looking foe profits and not simply money.
He believed that employees with a high need for achievement derive satisfaction from achieving
goals and become wealthy. They prefer immediate feedback on their performance and underatake tasks
having moderate risk. They dislike tasks with high risk because they do not get achievement
satisfaction. At the same time , they do not like risk – free or easy tasks.

14. McClelland stated following characteristics of high achievement people:
a. They set moderate , realistic and attainable goals.
b. They take calculated risks and look for challenging tasks.
c. They prefer situations wherein they can take personal responsibility for solving problems.
d. They need concrete feedback on how well they are doing.
e. Personal achievement is more important to them than mere economic rewards or social recognition.
According to McClelland, the need for achievement can be learned. This need if imparted to
economically backward cultures can help change them into successful and developed cultures.
He believed that motivation, abilities and congenial environment all combine to promote
entrepreneurship. Environment will include political, social and economic environments.

15. Joseph Schumpeter is the first major theorist to put the human agent at the centre of
the process of economic development. In 1949, he gave a dynamic theory of entrepreneurship
which considered entrepreneurship as the catalyst that disrupts the stationary circular flow of
economy and thereby initiates and sustains the process of development.
New combination of factors of production, which he termed as ‘innovation’ by an
entrepreneur activates the economy to a new level of development.
The concept of Innovation and its related development covers five functions:
1. Introduction of new product/service.
2. Introduction of new method of production
3. Opening of a new market

16. 4. Conquest of a new source of supply of raw materials and
5. Carrying out a new organisation of any industry.
According to Schumpeter, any person performing the above functions is an
entrepreneur, whether he is an independent businessman or dependent employee of a company,
such as managers or directors.
To Schumpeter, entrepreneurs are individuals motivated by a will for power, their
special characteristics being an inherent capacity to select correct answers, will and mind to
overcome fixed talents of thoughts and a capacity to withstand social opposition. Intuition –
capacity to see things in a way which in future, prove to be true even though it can not be
established in present – is an important factor which brings success to the entrepreneur.

17. Peter Drucker was of the opinion that entrepreneurship involved a purposeful search
for the sources of innovation, the changes and their symptoms that indicate opportunities for
successful innovation. He believed that entrepreneurs need to know and apply the basic
principles of successful innovation.
Systematic innovation – monitoring sources for innovative opportunity is required to be done
by entrepreneurs. There are six sources, out of which three lie within the enterprise and
remaining three are external to the enterprise.
1. The Unexpected – success, failure and outside event.
2. The Incongruity – between reality as it is actually and reality as it is assumed.
3. Innovation in industry / market structure.

18. 4. Demographics ( changes in population)
5. Changes in perception, mood and meaning.
6. New knowledge, both scientific and non – scientific.
According to Drucker, three conditions should be fulfilled for successful and systematic
innovation:
a. Innovation at work
b. Innovation to build on strengths
c. Innovation close to market focused on the market and market- driven.

19. 1.3 Reasons for growth of Entrepreneurship
The process of improving entrepreneurial skills and knowledge among individuals with
the help of providing well- organised training and developing supporting institutions is called
Entrepreneurial growth or development.
The main aim of such entrepreneurial growth is growing the start-up rates through
increasing the entrepreneurial base. This will eventually help in generating employment
prospects and accelerating the economic growth.
Following are the reasons for growth in Entrepreneurship:
1. Entrepreneurship mobilises idle saving of the public and thereby promotes capital
formation.
2. It provides immediate large scale employment.

20. 3. It promotes balanced regional development.
4. It helps in reducing concentration of economic power in few hands.
5. It stimulates equitable redistribution of wealth, income and even political power.
6. It encourages effective resource mobilization of capital and skill which would otherwise
remain unutilized.
7. It induces backward and forward linkages which stimulate economic development.
8. It promotes the exports of the country which enable economic development.