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Iv sem ed module 01.


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Iv sem ed module 01.

  2. 2. Meaning of Entrepreneur. • An entrepreneur is a person who starts an enterprise. He searches for change and responds to it. • A number of definitions have been given of an entrepreneur- The economists view him as a fourth factor of production along with land, labour and capital. • The sociologists feel that certain communities and cultures promote entrepreneurship like for example in India we say that people from Gujarat and Sind are very enterprising. • Still others feel that entrepreneurs are innovators who come up with new ideas for products, markets or techniques. GSSSIETW IMS MYSORE P.K.KUMAR 2
  3. 3. Meaning of Entrepreneur. • To put it very simply an entrepreneur is someone who perceives opportunity, organizes resources needed for exploiting that opportunity and exploits it. • Computers, mobile phones, washing machines, ATMs, Credit Cards, Courier Service, and Ready to eat Foods are all examples of entrepreneurial ideas that got converted into products or services. • Some definitions of an entrepreneur are listed below: GSSSIETW IMS MYSORE P.K.KUMAR 3
  4. 4. Definition of Entrepreneur. • Stems: from the French word ‘entrependre’ meaning one who undertakes or one who is a ‘go-between’ • Richard Cantillon: An entrepreneur is a person who pays a certain price for a product to resell it at an uncertain price, thereby making decisions about obtaining and using the resources while consequently admitting the risk of enterprise. • According to J B Say, an entrepreneur is “one who combines the land of one, the labor of another, the capital of yet another and thus produces a product”. By selling the product in the market, he pays interest on capital, rent on land, wages to the labor and what remains is his profits. A close look at this definition Say emphasizes the functions of co-ordination, organisation, and supervision. Thus entrepreneur is an organizer. GSSSIETW IMS MYSORE P.K.KUMAR 4
  5. 5. Meaning of Entrepreneurship • According to Peter F Drucker “ Entrepreneur is one who considers the changes that take place in the market as an opportunity to do business. Innovation is his tool. He further states that entrepreneur need to search purposefully for the sources of innovation, the changes and their symptoms that indicates opportunities for successful innovation. And they need to know and to apply the principles of successful innovation. Here the definition seem to suggest: • Innovation work, • Success based on strength / hard work, • Activity close to market, focus on the market and every thing else is market driven. GSSSIETW IMS MYSORE P.K.KUMAR 5
  6. 6. Evolution of the Concept. • In olden days the builders of forts for the king were called ‘entrepreneurs’. It was believed that such builders required skills of special nature & that the forts built by them would lost longer & stronger. Thus people who were capable of delivering any thing to society which was novel & that required special skill to develop were started to be called entrepreneurs. GSSSIETW IMS MYSORE P.K.KUMAR 6
  7. 7. Qualities of Entrepreneur. • Mental Ability, • Organizing skills, • Hard Work, • Discipline, • Clear goals, • Desire to Achieve, • Optimistic, • Ready to take risk, • Good at HR, • Emotional Stability, • Communication ability, • Self-Confidence, • Adaptability, • Positive Attitude. GSSSIETW IMS MYSORE P.K.KUMAR 7
  8. 8. Functions of an Entrepreneur. • Market research, • Idea Generation, • Product/service analysis, • Form of business, • Determination of business objectives, • Promotional formalities, • Raising the Capital, • Providing Infrastructure, • Selection of human resource, • Carrying out the Operations, • Risk bearing, • Organisation. • Innovation, • Exploration of new opportunity, • Providing Leadership. GSSSIETW IMS MYSORE P.K.KUMAR 8
  9. 9. Types of Entrepreneurs. • Based on Business Type; Trading, • Industrial, • Corporate, • Agricultural, • Based on Skills; Technical, • Non-Technical, • Based on Motivation: Pure, • Motivated, • Based on Growth; Growth oriented, • Non growth oriented, • Based on Scale/Size; Small, • Medium, • Large • GSSSIETW IMS MYSORE P.K.KUMAR 9
  10. 10. Types of Entrepreneurs. • Based on founder: First Generation, • Inherited, • Based on Gender: Men, • Women, • Based on Study: Innovative, • Imitative, • Fabian, • Drone, • Other types; Public, • Private, • Forced, • Artisan. GSSSIETW IMS MYSORE P.K.KUMAR 10
  11. 11. Intrapreneurs. 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 have entrepreneurial skills blended with managerial skills but operate within the confines of an organization. GSSSIETW IMS MYSORE P.K.KUMAR 11
  12. 12. Intrapreneurs & Enterpreners. • Dependant Vs Independent, • No risk Vs risk, • Salary Vs Reward, • Qualified Vs may or may not be qualified, • Restricted area of operation Vs limitless • boundary for operation, • No high achievement desire Vs desire to achievement, GSSSIETW IMS MYSORE P.K.KUMAR 12
  13. 13. Entrepreneurs Vs Managers. Entrepreneur Manager ======================================== An entrepreneur is involved A manager with running the With the start-up process business over a long period of time ------------------------------------------------------------------------ An entrepreneur assumes A manager does not have to financial, material and bear risks, psychological risks ------------------------------------------------------------------------ An entrepreneur is driven by A manager by the resources perception of opportunity he currently possesses, ---------------------------------------------------------------------- An entrepreneur is his own A manager follows rules & boss, procedures, ---------------------------------------------------------------- An entrepreneur gets A manager gets fixed uncertain rewards, rewards, ==================================== GSSSIETW IMS MYSORE P.K.KUMAR 13
  14. 14. Concept of Entrepreneurship. • Entrepreneurship can be described as a process of action an entrepreneur undertakes to establish his enterprise. Entrepreneurship is a creative activity. It is the ability to create and build something from practically nothing. It is a knack of sensing opportunity where others see chaos, contradiction and confusion. Entrepreneurship is the attitude of mind to seek opportunities, take calculated risks and derive benefits by setting up a venture. It comprises of numerous activities involved in conception, creation and running an enterprise. 14
  15. 15. Concept of Entrepreneurship. • According to Peter Drucker Entrepreneurship is defined as ‘a systematic innovation, which consists in the purposeful and organized search for changes, and it is the systematic analysis of the opportunities such changes might offer for economic and social innovation.’ • Entrepreneurship is a discipline with a knowledge base theory. It is an outcome of complex socio-economic, psychological, technological, legal and other factors. It is a dynamic and risky process. It involves a fusion of capital, technology and human talent. • Entrepreneurship is equally applicable to big and small businesses, to economic and non-economic activities. 15
  16. 16. Concept of Entrepreneurship. • Different entrepreneurs might have some common traits but all of them will have some different and unique features. If we just concentrate on the entrepreneurs then there will be as many models as there are ventures and we will not be able to predict or plan, how and where, and when these entrepreneurs will start their ventures. Entrepreneurship is a process. It is not a combination of some stray incidents. It is the purposeful and organized search for change, conducted after systematic analysis of opportunities in the environment. 16
  17. 17. Concept of Entrepreneurship. • Entrepreneurship is a philosophy- it is the way one thinks, one acts and therefore it can exist in any situation be it business or government or in the field of education, science and technology or poverty alleviation or any others. 17
  18. 18. Development of Entrepreneurship. • Economic development does not occur automatically. It mainly depends on the utilization of available resources which in turn depends on the number & quality of entrepreneurs. Thus there is a direct relationship between economic development & entrepreneurship. Earlier there was a belief that entrepreneurs are born and not made. Emergence of entrepreneurs in a few restricted castes and regions of people more often than others, perhaps, made this belief stronger. Many economists & sociologists have done research in the area to know what makes an individual an entrepreneur. One such study by David McClelland brought to lime light that a strong individual desire to achieve high as one of the reasons not withstanding the non business background. Thus now it is a known facts that entrepreneurs can be made besides those born. 18
  19. 19. Development of Entrepreneurship. • Entrepreneurship is now developed through education.Usually the model used for entrepreneurial education has three phases: • Stimulatory Phase- This phase involves planned publicity for opportunities, motivation training and help and guidance in selection of product or service. • Support Phase- This provides help in registration of units, arrangement of finance as well as land, sheds, power, water, common facility centres etc. Help is also provided in marketing of products. • Sustenance Phase- Once the enterprise is set up then help is provided for modernization, diversification, additional finance etc. 19
  20. 20. Entrepreneurial Culture Culture can be defined as the mix of norms, values and beliefs that are shared by a particular community [be it a business community, a cultural (or ethnic) community, a country, or a geographical region]. 20
  21. 21. Cultural Values • Linton (1975) describes values as a predisposition to act in a certain way. • Values of entrepreneurs: According to Sexton & Bowman (1986), entrepreneurship is a value in itself for Americans. Different authors suggest different values for entrepreneurs: • Kets de Vries (1984): reputation, power, status and recognition Gordon Survey of values (1976): independence, efficacy and a negative reaction to affiliation. • There is a general presumption that a society may have potential entrepreneurs, but only becomes entrepreneurial if it has a culture that supports innovation and initiative. 21
  22. 22. Cultural Attitudes • According to J. M. Toulouse (1990), entrepreneurial culture is favored by the following set of attitudes: 1. Business activities are valued. 2. Individual and collective initiatives are highly rated. 3. Determination and perseverance are desirable qualities. 4. An equilibrium between security and risk is accepted. 5. The tension between stability and change is resolved. Therefore, in a society favoring entrepreneurship, entrepreneurs are role models who are not only acceptable, but desirable. 22
  23. 23. • According to Prosek, the key to unleashing that creative energy is to create an entrepreneurial culture based on four pillars. • Authenticity -- Demonstrate your sincerity by being enthusiastic about entrepreneurial strategies and actions pursued by the business. • Commitment to People – “An entrepreneurial culture is based on the idea that each individual can be a powerful force for change in the organization,” said Prosek. Support the professional development of your staff, celebrate exceptional work, and don't forget to have fun. • Commitment to the Business -- Align an individual's interests with those of the business. “ • Continuous Effort -- The work of building a company’s culture never ends. *Prosek Partners, New York 23
  24. 24. Sustaining an entrepreneurial culture starts with who you hire.   It  is  essential  to  carefully  screen  prospective  employees  to  ensure  that  they  will  fit  within  your  culture.   An  entrepreneurial  culture  is  also  sustained  by  your  reward  system,  by  the  autonomy  and  respect  you  give  to  your  employees,  and  by  consistent  communication  about  your  ongoing  entrepreneurial  vision  for  the  company. 24
  25. 25. The entrepreneurial process.
  26. 26. Steps in the Entrepreneurial Process 1. Discovery 2. Concept Development 3. Resourcing 4. Actualization 5. Harvesting
  27. 27. Steps in the Entrepreneurial Process 1. Discovery: The stage in which the entrepreneur generates ideas, recognizes opportunities, and studies the market Innovation Opportunity
  28. 28. Discovery Consider your hobbies or skills Consider consumer needs and wants Conduct Surveys and questionnaires – test the market Study demographics
  29. 29. There are five basic questions that you should ask as you  evaluate an opportunity. • Is there a sufficiently attractive market opportunity? • Is your proposed solution feasible, both from a market  perspective and a technology perspective? • Can we compete (over a sufficiently interesting time  horizon): is there sustainable competitive advantage? • Do we have a team that can effectively capitalize of  this opportunity? • What is the risk / reward profile of this opportunity,  and does it justify the investment of time and money? 29
  30. 30. Steps in the Entrepreneurial Process 2. Concept Development: – Develop a business plan: a detailed proposal describing the business idea Executive summary Code of ethics Mission Statement
  31. 31. Concept Development – Choose business location – Will a patent or trademark be required?
  32. 32. Steps in the Entrepreneurial Process 3. Resourcing: The stage in which the entrepreneur identifies and acquires the financial, human, and capital resources needed for the venture startup, etc Start-up resourcesStart-up resources
  33. 33. Resourcing Identify potentialIdentify potential investorsinvestors HireHire employeesemployees Apply for loans,Apply for loans, grants andgrants and assistanceassistance
  34. 34. Steps in the Entrepreneurial Process 4. Actualization: The stage in which the entrepreneur operates the business and utilizes resources to achieve its goals/objectives. $$ Grand Opening $$ Day-to-Day Operations
  35. 35. Steps in the Entrepreneurial Process 5. Harvesting: The stage in which the entrepreneur decides on venture’s future growth, development, or demise What is your 5-year or 10-year plan? Consider adding locations or providing different products/services Will you go public?
  36. 36. Check for Understanding
  37. 37. You are collecting, reviewing, and interpreting surveys you distributed last week about your new business idea. What stage of the entrepreneurial process are you in? A.A. ActualizationActualization B.B. Concept DevelopmentConcept Development C.C. DiscoveryDiscovery D.D. HarvestingHarvesting
  38. 38. You are currently seeking people and companies to invest in your business venture. What stage of the entrepreneurial process are you in? A.A. ActualizationActualization B.B. Concept DevelopmentConcept Development C.C. DiscoveryDiscovery D.D. ResourcingResourcing
  39. 39. What is an example of an activity for a business person who is entering the harvesting stage of entrepreneurship? A.A. Considering opening a second storeConsidering opening a second store B.B. Gathering market research data about theGathering market research data about the productproduct C.C. Having a grand opening for the businessHaving a grand opening for the business D.D. Seeking financial assistance from the SmallSeeking financial assistance from the Small Business AdministrationBusiness Administration
  40. 40. Preparing a business plan for a new business, renting a building for the new store, and copyrighting the website for the new business are all classified as which stage of the entrepreneurial process? A.A. ActualizationActualization B.B. Concept DevelopmentConcept Development C.C. DiscoveryDiscovery D.D. ResourcingResourcing
  41. 41. Offering shares of stock to public investors and planning goals for the business during the next five years are examples of activities in which stage of the entrepreneurial process? A.A. ActualizationActualization B.B. Concept DevelopmentConcept Development C.C. HarvestingHarvesting D.D. ResourcingResourcing
  42. 42. Having a large grand opening sale or a summer clearance sale are examples of which stage of the entrepreneurial process? A.A. ActualizationActualization B.B. Concept DevelopmentConcept Development C.C. HarvestingHarvesting D.D. ResourcingResourcing