Chapters 2,3,4,5 of entrepreneurship by dr manishankar chakraborty

Entrepreneurship
Chapters 2,3,4 and 5
Dr. Manishankar Chakraborty
Ibra College of Technology

Lesson-2
Entrepreneur and Entrepreneurial Competencies
• Famous Entrepreneurs
• Sheikh Saud Salim Bahwan,Saud Bahwan
Group
• Dr Mohammed Al Barwani, MB Holdings
• Abdulla Ahmad Sulaiman Al Hadi, Gulf Mining
Materials Company
• Kanaksi Gokaldas Khimji, Khimji Group
• Bill Gates, Microsoft
2/18/2015 Dr. Manishankar Chakraborty, ICT, Oman 2

Lesson-2
• Who is an entrepreneur?
• An entrepreneur is one who creates a new
business in the face of risk and uncertainty for
the purpose of achieving profit and growth by
identifying opportunities and assembling the
necessary resources to capitalize on them.

Lesson-2
• Risk- It is the threat or probability that an
action or event will adversely or beneficially
affect an organization’s ability to achieve its
objectives.
• Uncertainty- It is a state of having limited
knowledge where it is impossible to exactly
describe existing state or future outcome,
more than one possible outcome.

Lesson-2
• Resources required for business:
• Four basic resources required for a business are
Man, Machine, Material and Money.
• Entrepreneur is a person who-
• Identifies opportunities and gathers resources to
establish/create a new business.
• Bears risk and uncertainty
• Runs a business
• Receives financial and social rewards

Lesson-2
• Title of an Entrepreneur
• Business Owner
• General Manager
• Administrator
• Proprietor
• Business Developer
• Managing Director
• President
• Chief Executive Officer(CEO)
• Chief Operating Office (COO)
• Business Leader

Lesson-2
• Functions of Entrepreneur
• 1. Risk Assumption
• Should necessarily act as a risk bearing agent
of production since he has to handle a greater
amount of uncertainties in business
• Risk due to the possibility of changes in the
taste of customers, change in fashion and
technique of production cannot be insured

Lesson-2
• An entrepreneur therefore has to take
calculated risks.
• 2. Decision-making process
• An entrepreneur has to decide the nature and
type of goods to be produced, the size of the
business, its location, technique of
production, type of employees etc.

Lesson-2
• 3. Managerial Function
• An entrepreneur has to know the managerial
functions like coordination, organization and
supervision.
• 4. Function of Innovation
• The person who discovers new methods, new
materials and machines is called as Inventor.

Lesson-2
• The person who utilizes the inventions so as to
make new combinations of products is called
as Innovator.
• An entrepreneur has to be always on the
lookout to introduce a new product or a new
production technology or open a new market
hitherto untapped potential or discover new
source of supply of new material.

Lesson-2
Entrepreneur and Entrepreneurial
Competencies
• Types of Entrepreneur
• They are classified on the following basis-
• 1. According to the type of Business
• Business entrepreneurs
• Trading entrepreneurs
• Industrial entrepreneurs
• Agricultural entrepreneurs
• Retail entrepreneurs
• Service entrepreneurs

Lesson-2
• 2. According to gender
• Men entrepreneur
• Women entrepreneur
• 3. According to the area of operation
• Urban entrepreneurs
• Rural entrepreneurs

Lesson-2
Competencies
• 4. According to risk taking ability
• (a)Innovative entrepreneur-
• Who can foresee potentially viable and profitable
opportunities through innovation.
• Example- Apple and i-phone
• They are motivated, talented as innovation is
their key function.
• As per Peter Drucker, “One who always searches
for change, responds to it and exploits it as an
opportunity”.

Lesson-2
Competencies
• (b)Adoptive or Imitative entrepreneur
• One who is ready to adopt the successful
innovations already started by innovating
entrepreneurs.
• Example- Microsoft coming out with their own
search engine, Bing after Google.
• Imitative entrepreneur does not innovate, he
only imitates techniques and technologies of
innovators.

Lesson-2
• (c) Fabian entrepreneur-
• He is one who adopts a great caution in
introducing any changes in the business.
• Example- Companies making aeroplanes (Boeing
and Airbus)
• He has neither the will to introduce any new
changes nor the desire to adopt new methods.
• He imitates when he is clear that failure to do so
would result in heavy loss.

Lesson-2
Competencies
• (d)Drone entrepreneur-
• One who blindly follows the traditional methods
of production even when it causes loss to him.
• Example-Government owned companies in
developing countries like India having this
approach towards the public sector controlled
companies.
• He carries out business in traditional way even
after making losses.

Lesson-3
Major Entrepreneurial Competencies
• Entrepreneurial competencies refers to the
key characteristics possessed by an
entrepreneur to perform important functions.
• This includes Knowledge Skills and Attitude
• Competencies required for successful
entrepreneurs
• Check from next slide

Lesson-3
Competencies required for successful entrepreneurs are:
Competencies Definitions/ Illustration
1. Initiative Does things before being asked or forced to, by
events.
2. Assertiveness Confronts problems with others directly. Tells others
what they have to do.
Achievement Orientation
3. Sees and acts on
opportunities
Looking for opportunities and take action to use the
opportunities. Action like obtaining financing, land,
work, space, or assistance.
4. Efficiency orientation Looks for or finds ways to do things faster or at less
cost.
5. Concern for high quality of
work
Desire to produce or sell a top or better quality
product or service.
1. Systematic Planning Develops logical, step by step plans to reach the goal.
(Breaks a large task down into subtasks, or sub
goals, anticipates obstacles, and evaluates
alternatives.)
7. Monitoring Develops or uses procedures to ensure that work is
completed or that work meets standards of quality.
Commitment To Others
8. Commitment to work contract Makes a personal sacrifice or expends (use/ apply)
extraordinary effort to complete a job, pitches in with
workers or works in their place to get the job done.
9. Recognizing the importance
of business relationships
Acts to build rapport or friendly relationships with
customers sees interpersonal relationships as a
fundamental business resource, places long-term
goal will over short-term gain.

Lesson-3
• Other competencies
• Persistence
• Problem solving
• Self-confidence
• Monitoring
• Concern for other’s welfare

Lesson 4
Role of Entrepreneurship in Oman’s Economic
Development
• Projection for the Vision for Oman’s economy
Oman 2020
• Check the table from next slide.
• Gross Domestic Product is the value of a
country’s overall output of goods and
services(during one fiscal year) at market
prices, excluding net income from abroad.

Lesson 4
Development
Activity 1995 2000 2020
Oil 33.5 25.9 9.0
Gas 1.5 5.0 10.0
Agriculture 3.0 3.5 3.1
Fishing 1.1 1.0 2.0
Mining & Quarrying 0.6 0.6 2.0
Manufacturing 5.4 6.8 15.0
Electricity & Water 1.7 4.3 2.0
Building, Construction & Real Estate 3.2 6.9 10.0
Trade & Tourism 14.1 17.8 18.0
Transportation & Communication 7.0 8.6 8.0
Banks, Insurance and Financial Services 7.9 4.3 8.0
Other Private Services* 8.3 3.2 5.0
Public Services 13.9 12.6 10.0
Gross Domestic Product 100.0 100.0 100.0

Lesson 4
Development
• Role of entrepreneurship in economic
development
• Entrepreneurship helps in creating
job/employment.
• It helps in increase number of enterprises.
• It promotes healthy competition leading to
innovation and creativity.
• It encourages in exploration and utilization of
natural resources.

Lesson 4
Role of Entrepreneurship in Oman’s
Economic Development
• It promotes the country’s exports which is
very important for economic development.
• It helps in generating wealth at all levels in a
society(equal distribution of income).
• It helps in improving social and community
condition( improved standard of living)

Lesson 4
Development
• Characteristics of Enterprising Society
• Continuous discovery of unidentified needs of
economy.
• New ideas continuously infused for revitalization and
growth of economy.
• Constant solving of problems experienced in
economy/society.
• Useful goods and services constantly
produced/provided.
• Wide distribution of needed goods and services
throughout the population.

Lesson 4
Development
• Entrepreneurship provides:
• Economy with small enterprises which grow
into medium and large enterprises.
• Competition throughout the economy among
small, medium and large firms alike, leading to
improved products, services and efficiency in
society and economy.

Lesson 4
Development
• Factors stimulating entrepreneurship:
• Capital formation
• Entrepreneurship Development Programs
• Training Facilities
• Suitable Environment
• Collateral Arrangements
• Ideal climate for Innovation

Lesson-5
Difference between Entrepreneur and Other
Business People
Businessman / Business Entrepreneur / Entrepreneurship
Own an enterprise or venture Own an enterprise or venture
Usually a profit oriented Customer oriented
Usually plays safe Bold and ambitious (motivated)
May be purchased, donated or inherited Creates his own idea and realize it as a
business
Generally traditional An innovator
Employee's role is not too significant Employee's role is significant as ideas are
shared with them
Usually distressed and faces more pressure Happy and enthusiastic businessman
Generally hire people to contribute profit Hire people to make their lives better

Lesson-5
Business People
Entrepreneur Vs Manager: A Comparison
There are misconceptions that entrepreneur and manager are the same. However, the reality is
that they are different.
Entrepreneur Manager
Owner- An entrepreneur is the owner of his
own business.
Servant- A manager is a servant of his employer.
Profits- An entrepreneur earns profits from his
business which is uncertain and unlimited.
Salary- A manager earns salary which is
generally certain and limited.
Full Risk Bearing- An entrepreneur is a person
who has to take high risks for starting and
running venture.
Less or No Risk Bearing- A manager takes less
or no risk while performing his job.
All Functions- An entrepreneur has to look
after all the functions of his organization.
Selective Functions- A manger looks after
selective functions of an organization.
Innovator- An entrepreneur is always an
innovator, in the lookout for new products and
services.
Executor- A manager is simply an executor who
is responsible for executing the decisions of the
owner and entrepreneur.

Lesson-5
Business People
Ent er pr ise
Competencies needed to be an Entrepreneur
Competencies may be defined as:
a body of knowledge
a set of skills
a cluster of traits
Knowledge consists of a set or body of information stored, which may be recalled at an
appropriate time. Knowledge in the context of business may be to have information with aspects
such as business opportunity, customers, the market, business management and different
processes etc.
Skill is the ability to apply knowledge. It can be acquired or developed through practice. In the
context of business, it is possible to distinguish between skills of a technical and managerial
nature. Such as:
Technical Skills Managerial Skills
Engineering Organizing
Computing Planning
Carpentry Marketing (including selling)
Mechanics Financial management
Trait is the total of qualities or characteristics that constitutes (comprise, form) personal
individuality. Traits like initiator, persistent, efficiency oriented, take calculated risks,
persuasive, self-confidence, assertive etc.
Knowledge
TraitsSkills

Chapters 2,3,4,5 of entrepreneurship by dr manishankar chakraborty

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