types of Entrepreneur

1. ENTREPRENEURSHIP
DEVELOPMENT
An Introduction
11/28/2014
PRAJEESH E MENON
MBA,KVM COLLEGE, Cherthala, Kerala

2. According to George Bernard Shaw, people fall
into three categories:
(1) those who make things happen
(2) Those who watch things happen, and
(3) those who are left to ask what did happen.
Generally, Entrepreneurs fall under the first
category.
11/28/2014
PRAJEESH E MENON KVM COLLEGE,
Cherthala, Kerala

3. ABOUT ENTREPRENEURSHIP…
• Entrepreneurship is a dynamic process of vision, change, and creation.
• It requires an application of energy and passion towards the creation
and implementation of new ideas and creative solutions.
• An entrepreneur is an aggressive catalyst for change in the world of
business.
• He or she is an independent thinker who dares to be different in a
background of common events thereby catering to the social and
economic upliftment.
• The prime focus of any entrepreneur is to capitalize the opportunities
and to build a strong ethical base.
• Entrepreneurial development is a pivotal issue that needs to be
addressed by any country to develop endowed entrepreneurs who can
make a mark in this world of competitions.
11/28/2014
PRAJEESH E MENON KVM COLLEGE,
Cherthala, Kerala

4. ENTREPRENEUR
PERSON
ENTREPRENEURSHIP
PROCESS
ENTERPRISE
OBJECT
11/28/2014
PRAJEESH E MENON KVM COLLEGE,
Cherthala, Kerala

5. ENTREPRENEUR
• The word entrepreneur is derived from
the French verb “enterprendre”, which
means “to undertake”.
• Entrepreneur is the person who brings
together the factors of production and
combines them into a product.
• He organizes and manages a business
unit assuming the risk for profit.
11/28/2014
PRAJEESH E MENON KVM COLLEGE,
Cherthala, Kerala

6. ENTREPRENEURSHIP
• Entrepreneurship is the process of
creating value by bringing
together a unique package of
resources to exploit an
opportunity.
11/28/2014
PRAJEESH E MENON KVM COLLEGE,
Cherthala, Kerala

7. EVOLUTION OF THE CONCEPT…
EARLY PERIOD:
• The earliest definition of the entrepreneur as a go-between is
Marco Polo.
• He tried to establish trade route to the far East.
• He used to sign a contract with a venture capitalist to sell his
goods.
• The capitalist was the risk bearer.
• The merchant adventurer took the role of trading.
• After his successful selling of goods and completing his trips, the
profits were shared by the capitalist and the merchant.
11/28/2014
PRAJEESH E MENON KVM COLLEGE,
Cherthala, Kerala

8. EVOLUTION OF THE CONCEPT…
MIDDLE AGES:
• The term entrepreneur was referred to a person who was
managing large projects.
• He was not taking any risk but was managing the projects using
the resources provided.
• An example is the cleric who is in charge of great architectural
works such as castles, public buildings, cathedrals etc.
11/28/2014
PRAJEESH E MENON KVM COLLEGE,
Cherthala, Kerala

9. EVOLUTION OF THE CONCEPT…
16th CENTURY:
• The term entrepreneur was referred to a person who was
involved in military expeditions.
17th CENTURY:
• An entrepreneur was a person who entered into a contractual
arrangement with the Govt. to perform a service or to supply
some goods.
• Civil engineering activities such as construction and
fortification.
• The profit was taken (or loss was borne) by the entrepreneur.
PRAJEESH E MENON KVM COLLEGE,
11/28/2014
Cherthala, Kerala

10. EVOLUTION OF THE CONCEPT…
18th CENTURY:
3 MAIN CONCEPTS EVOLVED
• It was Richard Cantillon, French Economist, who applied the
term entrepreneur to business for the first time (1734).
• He is regarded by some as the founder of the term.
• He defined an entrepreneur as a person or an agent who buys
factor services at certain prices with a view to sell them at
uncertain prices in the future.
• Concept 1: ENTREPRENEUR = RISK BEARER
11/28/2014
PRAJEESH E MENON KVM COLLEGE,
Cherthala, Kerala

11. EVOLUTION OF THE CONCEPT…
• Jean-Baptiste Say, (aristocratic industrialist) in 1803— An
entrepreneur is an economic agent who unites all means of
production- land, labour and capital to produce a product or
service.
• Product sales pay rent, wages, interest and what remains is profit.
• He shifts economic resources from an area of lower to an area of
higher productivity.
• Concept 2: ENTREPRENEUR = ORGANISER
11/28/2014
PRAJEESH E MENON KVM COLLEGE,
Cherthala, Kerala

12. EVOLUTION OF THE CONCEPT…
• Joseph A. Schumpeter (1934)
• The entrepreneur in an advanced economy is an individual who
introduce something new in the economy- a method of production
not yet tested by experience in the branch of manufacturing, a
product with which consumers are not yet familiar, a new source of
raw material or of new markets and the like.
• Concept 3: ENTREPRENEUR = INNOVATOR
11/28/2014
PRAJEESH E MENON KVM COLLEGE,
Cherthala, Kerala

13. • 1910: Adam Smith – An entrepreneur is a person who
only provides capital without taking active part in the
leading role in the enterprise.
• 1961: David McClelland—A person with a high need
for achievement [N-Ach] who is energetic and a
moderate risk taker.
• 1964: Peter Drucker—One who searches for change,
responds to it and exploits opportunities. Innovation is a
specific tool of an entrepreneur hence an effective
entrepreneur converts a source into a resource.
• 2013: Ronald May—Someone who commercializes his
or her innovation.
11/28/2014
PRAJEESH E MENON KVM COLLEGE,
Cherthala, Kerala

14. CHARACTERISTICS OF AN ENTREPRENEUR
11/28/2014
PRAJEESH E MENON KVM COLLEGE,
Cherthala, Kerala

15. • HARD WORK
• BUSINESS ACUMEN AND SINCERITY
• PRUDENCE
• ACHIEVEMENT MOTIVATION
• SELF-RELIANCE AND INDEPENDENCE
• HIGHLY OPTIMISTIC
• KEEN FORSIGHT
• PLANNING AND ORGANISING ABILITY
• INNOVATIVENESS
• RISK TAKING
• SECRECY MAINTENANCE
• MAINTAIN PUBLIC RELATIONS
• COMMUNICATION SKILL
11/28/2014
PRAJEESH E MENON KVM COLLEGE,
Cherthala, Kerala

16. QUALITIES OF AN ENTREPRENEUR
11/28/2014
PRAJEESH E MENON KVM COLLEGE,
Cherthala, Kerala

17. • ENTERPRISING
• RISK BEARER
• CREATIVE THINKER
• AMBITIOUS
• HIGH NEED ACHIEVEMENT
• CHANGE AGENT
• GOOD ORGANISER AND MANAGER
• DECISION MAKER
• STRONG COMMITMENT
• FIRM DETERMINATION
11/28/2014
PRAJEESH E MENON KVM COLLEGE,
Cherthala, Kerala

18. FUNCTIONS OF AN ENTREPRENEUR
11/28/2014
PRAJEESH E MENON KVM COLLEGE,
Cherthala, Kerala

19. • Risk Assumption Function
• Business Decision Making Function
• Managerial Function
• Function of Innovation
11/28/2014
PRAJEESH E MENON KVM COLLEGE,
Cherthala, Kerala

20. RISKS FACED BY ENTREPRENEURS
1. FINANCIAL RISK:
• The entrepreneurship has to invest money in the
enterprise on the expectation of getting in return
sufficient profits along with the investment.
• He may get attractive income or he may get only
limited income. Sometimes he may incur losses.
2. PERSONAL RISK:
• Starting a new venture uses much of the
entrepreneur’s energy and time.
• He or she has to sacrifice the pleasures attached
to family and social life.
11/28/2014
PRAJEESH E MENON KVM COLLEGE,
Cherthala, Kerala

21. 3) CARRIER RISK:
• This risk may be caused by a number of reasons such
as leaving a successful career to start a new business
or the potential of failure causing damage to
professional reputation.
4) PSYCHOLOGICAL RISK:
• Psychological risk is the mental agonies an
entrepreneur bears while organizing and running a
business venturesome entrepreneurs who have
suffered financial catastrophes have been unable to
bounce back.
11/28/2014
PRAJEESH E MENON KVM COLLEGE,
Cherthala, Kerala

22. 11/28/2014
TYPES OF ENTREPRENEURS
PRAJEESH E MENON KVM COLLEGE,
Cherthala, Kerala

23. 1. CLASSIFICATION BY CLARENCE
DANHOF:
Clarence Danhof, On the basis of
American agriculture, classified
entrepreneurs in the following categories:
a) INNOVATIVE ENTREPRENEURS
b) ADOPTIVE OR IMITATIVE
ENTREPRENEURS
c) FABIAN ENTREPRENEURS
d) DRONE ENTREPRENEURS
11/28/2014
PRAJEESH E MENON KVM COLLEGE,
Cherthala, Kerala

24. INNOVATIVE ENTREPRENEURS
• They are generally aggressive on experimentation and cleverly
put attractive possibilities into practice.
• An innovative entrepreneur, introduces new goods, inaugurates
new methods of production, discovers new markets and
reorganizes the enterprise.
• Innovative entrepreneurs bring about a transformation in
lifestyle and are always interested in introducing innovations.
11/28/2014
PRAJEESH E MENON KVM COLLEGE,
Cherthala, Kerala

25. ADOPTIVE OR IMITATIVE ENTREPRENEURS
• Imitative entrepreneurs do not innovate the changes
themselves, they only imitate techniques and technology
innovated by others.
• They copy and learn from the innovating entrepreneurs.
• While innovating entrepreneurs are creative, imitative
entrepreneurs are adoptive.
11/28/2014
PRAJEESH E MENON KVM COLLEGE,
Cherthala, Kerala

26. FABIAN ENTREPRENEURS
• These entrepreneurs are traditionally bounded.
• They would be cautious.
• They neither introduce new changes nor adopt new methods
innovated by others entrepreneurs.
• They are shy and lazy. They try to follow the footsteps of their
predecessors.
• They follow old customs, traditions, sentiments etc. They take
up new projects only when it is necessary to do so.
11/28/2014
PRAJEESH E MENON KVM COLLEGE,
Cherthala, Kerala

27. DRONE ENTREPRENEURS
• Drone entrepreneurs are those who refuse to adopt and use
opportunities to make changes in production.
• They would not change the method of production already
introduced.
• They follow the traditional method of production.
• They may even suffer losses but they are not ready to make
changes in their existing production methods.
11/28/2014
PRAJEESH E MENON KVM COLLEGE,
Cherthala, Kerala

28. COLE’S CLASSIFICATION
1. EMPIRICAL ENTREPRENEUR
 Who never introduces anything new in his method of production or
business.
 Simply follows the rule of thumb
 Like drone entrepreneurs
2. RATIONAL ENTREPRENEUR
 Who is ready to introduce even revolutionary changes on the basis of
general economic conditions prevailing in that area.
 Takes rational decisions himself depending up on the situation.
3. COGNITIVE ENTREPRENEUR
 Who takes advices and services of experts and introduces changes.
11/28/2014
PRAJEESH E MENON KVM COLLEGE,
Cherthala, Kerala

29. ON THE BASIS OF STAGES OF DEVELOPMENT
1) First Generation Entrepreneur: He is one who starts an industrial
unit by means of his own innovative ideas and skills. He is
essentially an innovator. He is also called new entrepreneur.
2) Modern Entrepreneur: He is an entrepreneur who undertakes those
ventures which suit the modern marketing needs.
3) Classical Entrepreneur: He is one who develops a self supporting
venture for the satisfaction of customers’ needs. He is a stereo type
or traditional entrepreneur.
11/28/2014
PRAJEESH E MENON KVM COLLEGE,
Cherthala, Kerala

30. ON THE BASIS OF TYPE OF BUSINESS
1) Business Entrepreneur: He is an individual who discovers an idea to start
a business and then builds a business to give birth to his idea.
2) Trading Entrepreneur: He is an entrepreneur who undertakes trading
activity i.e; buying and selling manufactured goods.
3) Industrial Entrepreneur: He is an entrepreneur who undertakes
manufacturing activities.
4) Corporate Entrepreneur: He is a person who demonstrates his innovative
skill in organizing and managing a corporate undertaking.
5) Agricultural Entrepreneur: They are entrepreneurs who undertake
agricultural activities such as raising and marketing of crops, fertilizers and
other inputs of agriculture. They are called agripreneurs.
11/28/2014
PRAJEESH E MENON KVM COLLEGE,
Cherthala, Kerala

31. ON THE BASIS OF USE OF TECHNOLOGY
Technical Entrepreneur:
• They are extremely task oriented.
• They are of craftsman type.
• They develop new and improved quality goods
because of their craftmanship.
• They concentrate more on production than on
marketing.
11/28/2014
PRAJEESH E MENON KVM COLLEGE,
Cherthala, Kerala

32. ON THE BASIS OF USE OF TECHNOLOGY
Non-Technical Entrepreneur:
• These entrepreneurs are not concerned with the
technical aspects of the product.
• They develop marketing techniques and
distribution strategies to promote their business.
• Thus they concentrate more on marketing
aspects.
11/28/2014
PRAJEESH E MENON KVM COLLEGE,
Cherthala, Kerala

33. ON THE BASIS OF USE OF TECHNOLOGY
Professional Entrepreneur:
• He is an entrepreneur who starts a business unit
but does not carry on the business for long
period.
• He sells out the running business and starts
another venture.
11/28/2014
PRAJEESH E MENON KVM COLLEGE,
Cherthala, Kerala

34. ON THE BASIS OF MOTIVATION
Pure Entrepreneur:
• They believe in their own performance while
undertaking business activities.
• They undertake business ventures for their
personal satisfaction, status and ego.
• They are guided by the motive of profit.
• For example, Dhirubhai Ambani of Reliance
Group.
11/28/2014
PRAJEESH E MENON KVM COLLEGE,
Cherthala, Kerala

35. ON THE BASIS OF MOTIVATION
Induced Entrepreneur:
• He is induced to take up an entrepreneurial
activity with a view to avail some benefits
from the government.
• These benefits are in the form of assistance,
incentives, subsidies, concessions and
infrastructures.
11/28/2014
PRAJEESH E MENON KVM COLLEGE,
Cherthala, Kerala

36. ON THE BASIS OF MOTIVATION
Motivated Entrepreneur:
• These entrepreneurs are motivated by the desire to
make use of their technical and professional
expertise and skills.
• They are motivated by the desire for self-fulfillment.
Spontaneous Entrepreneur:
• They are motivated by their desire for self-employment
and to achieve or prove their
excellence in job performance.
• They are natural entrepreneurs.
11/28/2014
PRAJEESH E MENON KVM COLLEGE,
Cherthala, Kerala

37. ON THE BASIS OF ENTREPRENEURIAL ACTIVITY
Novice:
• A novice is someone who has started his/her first entrepreneurial venture.
Serial Entrepreneur:
• A serial entrepreneur is someone who is devoted to one venture at a time
but ultimately starts many.
• He repeatedly starts businesses and grows them to a sustainable size and
then sells them off.
Portfolio Entrepreneurs:
• A portfolio entrepreneur starts and runs a number of businesses at the same
time.
• It may be a strategy of spreading risk or it may be that the entrepreneur is
simultaneously excited by PRAJEESH a variety E MENON of KVM opportunities. COLLEGE,
11/28/2014
Cherthala, Kerala

38. ENTREPRENEUR VS MANAGER
ENTREPRENEUR
• Owner of the business
• Profit
• Full risk bearing
• All functions
• Innovator
MANAGER
• Servant of the business
• Salary
• No risk bearing
• Managerial functions only
• Executor
11/28/2014
PRAJEESH E MENON KVM COLLEGE,
Cherthala, Kerala

39. INTRAPRENEURS
• The new brand of corporate entrepreneurs from within an
organisation are called as intrapreneurs.
• The term intrapreneur was coined in USA in the late seventies.
• Many senior executives of big companies in America left their jobs
and started small business of their own.
• They left the organisation because they did not get any opportunity
to apply their own ideas and innovative ability.
• These entrepreneurs become successful in their own ventures.
• Some of them caused a threat to the corporations they left.
11/28/2014
PRAJEESH E MENON KVM COLLEGE,
Cherthala, Kerala

40. INTRAPRENEURS
• This type if entrepreneurs have come to be called Intrapreneurs.
• They believe strongly in their own talents.
• They have desire to create something of their own.
• They want responsibility and have a strong drive for individual
expression and more freedom in their present organisational
structure.
• When this freedom is not forthcoming, they become less productive
or even leave the organisation to achieve self actualisation
elsewhere.
11/28/2014
PRAJEESH E MENON KVM COLLEGE,
Cherthala, Kerala

41. ENTREPRENEUR VS INTRAPRENEUR
ENTREPRENEUR
• Independent
• Need not be highly educated
• Fund raising
• Risk bearing
• Routine work
• Operation from outside
• Strong authoritarian
INTRAPRENEUR
• Dependent
• Highly educated
• No fund raising
• No risk bearing
• Specialist
• Operation from inside
• Less authoritarian
11/28/2014
PRAJEESH E MENON KVM COLLEGE,
Cherthala, Kerala

42. COPRENEUR
• Copreneurs are entrepreneurial couples who work
together as co-owners of their business.
• They are creating a division of labour that is based on
expertise as opposed to gender studies show that
companies co-owned by spouses represent one of the
fastest growing business sectors.
11/28/2014
PRAJEESH E MENON KVM COLLEGE,
Cherthala, Kerala

43. ULTRAPRENEUR
• The concept of ultrapreneuring is to identify a business
opportunity, determine its viability and form a company.
• It requires assembling a super competent management team,
who then develop, produce and markets the product or service
in the shortest optimum time period.
• They create business and then sell out, merge or combine.
• In short, going beyond the simple undertaking and keeping a
focus on the benefits of that undertaking provides a sensible
definition of the word Ultrapreneur.
11/28/2014
PRAJEESH E MENON KVM COLLEGE,
Cherthala, Kerala

44. The Concept of Entrepreneurship…
11/28/2014
PRAJEESH E MENON KVM COLLEGE,
Cherthala, Kerala

45. DEFINITION
According to A. H. Cole, “Entrepreneurship is the purposeful
activities 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”.
11/28/2014
PRAJEESH E MENON KVM COLLEGE,
Cherthala, Kerala

46. THE ENTREPRENEURIAL PROCESS
1
• IDENTIFY AN OPPORTUNITY
2
• ESTABLISH VISION
3
• PERSUADE OTHERS
4
• GATHER RESOURCES
5
• CREATE NEW VENTURE , PRODUCT OR MARKET
6
• CHANGE OR ADAPT WITH TIME
11/28/2014
PRAJEESH E MENON KVM COLLEGE,
Cherthala, Kerala

47. ENTREPRENEURIAL COMPETENCIES/ TRAITS
KNOWLEDGE
TRAITS
MOTIVE SKILL
11/28/2014
PRAJEESH E MENON KVM COLLEGE,
Cherthala, Kerala

48. • KNOWLEDGE: Collection and retention of information in
ones mind
• SKILL: The ability to demonstrate a system and sequence of
behaviour which results in something that one can see
• MOTIVE: Urge to achieve one’s goal
11/28/2014
PRAJEESH E MENON KVM COLLEGE,
Cherthala, Kerala

49. TYPES OF COMPETENCIES
• HARD-SKILL COMPETENCIES:
Skills that are acquired through
education or work experience.
• SOFT-SKILL COMPETENCIES:
Skills that are generally inherent in an
individual or developed by him
consciously.
E.g., Communication Skill
11/28/2014
PRAJEESH E MENON KVM COLLEGE,
Cherthala, Kerala

50. MAJOR ENTREPRENEURIAL COMPETENCIES
11/28/2014
PRAJEESH E MENON KVM COLLEGE,
Cherthala, Kerala

51. Entrepreneurship Development Institute of India, Ahemedabad
conducted a study under Prof. David C. McClelland. The core
competencies according to the study are:
• Initiative
• Looking for opportunities
• Persistence
• Information seeker
• Quality conscious
11/28/2014
PRAJEESH E MENON KVM COLLEGE,
Cherthala, Kerala

52. • Committed to work
• Efficiency seeker
• Proper planning
• Problem solver
• Self-confidence
• Assertive
• Persuasive
• Efficient monitor
• Employees’ well wisher
• Effective strategist
11/28/2014
PRAJEESH E MENON KVM COLLEGE,
Cherthala, Kerala

53. ACCORDING TO B. C. TANDON
• Entrepreneur is enough risk-bearer.
• He is ready to adapt change, if the situation warrant.
• He has the ability to Marshall the resources at his command.
• He is a good organiser as well as a good manager.
11/28/2014
PRAJEESH E MENON KVM COLLEGE,
Cherthala, Kerala

54. DEVELOPING COMPETENCIES
• Kakinada Experience.
• The procedure involves four
steps:
– Competency Recognition
– Self-Assessment
– Competency Application
– Feed back
11/28/2014
PRAJEESH E MENON KVM COLLEGE,
Cherthala, Kerala

55. ENTREPRENEUR VS ENTREPRENEURSHIP
ENTREPRENEUR
• Person
• Organiser
• Innovator
• Motivator
• Leader
• Creator
ENTREPRENEURSHIP
• Function/ Process
• Organisation
• Innovation
• Motivation
• Leadership
• Creation
11/28/2014
PRAJEESH E MENON KVM COLLEGE,
Cherthala, Kerala

56. ENTREPRENEUR VS ENTREPRENEURSHIP
ENTREPRENEUR
• Risk-bearer
• Initiator
• Visualiser
• Technician
• Imitator
• Administrator
ENTREPRENEURSHIP
• Risk-bearing
• Initiative
• Vision
• Technology
• Imitation
• Administration
11/28/2014
PRAJEESH E MENON KVM COLLEGE,
Cherthala, Kerala

57. ENTREPRENEURIAL MOTIVATION
11/28/2014
PRAJEESH E MENON KVM COLLEGE,
Cherthala, Kerala

58. 11/28/2014
PRAJEESH E MENON KVM COLLEGE,
Cherthala, Kerala

59. Motivation means….
• Willingness to exert high levels of effort toward organizational
goals
• Conditioned by the effort’s ability to satisfy some individual
need
• Motivation can be described in terms of intensity, persistence,
and direction
11/28/2014
PRAJEESH E MENON KVM COLLEGE,
Cherthala, Kerala

60. Definition…
• According to Dalton E. McFarland, “Motivation refers to the
way in which urges, drives, desires, strives, aspirations and
needs direct, control or explain the behaviour of human being”
11/28/2014
PRAJEESH E MENON KVM COLLEGE,
Cherthala, Kerala

61. Nature of Motivation…
• Motivation: The set of forces that leads people to
behave in particular ways
• The Importance of Motivation
– Performance depends upon motivation, ability, and
environment
– P = M + A + E
11/28/2014
PRAJEESH E MENON KVM COLLEGE,
Cherthala, Kerala

62. Concepts…
• Needs and Motives
• Goals
• Behaviour
• Incentives
• Instincts
11/28/2014
PRAJEESH E MENON KVM COLLEGE,
Cherthala, Kerala

63. Process of Motivation
GOAL
BEHAVIOR MOTIVE
11/28/2014
PRAJEESH E MENON KVM COLLEGE,
Cherthala, Kerala

64. MOTIVATION THEORIES
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PRAJEESH E MENON KVM COLLEGE,
Cherthala, Kerala

65. Abraham Maslow’s Need Hierarchy Theory
Self
Transcend
ence
Self
actualization
Self Esteem
Social Needs
Safety and Security Needs
Physiological Needs
11/28/2014
PRAJEESH E MENON KVM COLLEGE,
Cherthala, Kerala

66. David McClelland’s Acquired Needs Theory
Power
Achievement
Affiliation
11/28/2014
PRAJEESH E MENON KVM COLLEGE,
Cherthala, Kerala

67. Motivating Factors…
1. Intrinsic Factors:
• Desire to do something new
• Educational background
• Occupational background or experience
2. Extrinsic Factors:
• Government assistance and support
• Availability of labor and raw materials
• Encouragement from big business houses
• Promising demand for the product
11/28/2014
PRAJEESH E MENON KVM COLLEGE,
Cherthala, Kerala