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MBA curriculum UNIT - 1
ENTREPRENEURSHIP
CONCEPT AND DEFINITIONS
• Entrepreneurship is the act of setting out on your own and
starting a business instead of working for someone else in his
business
• Hence, anyone who exhibits the characteristics of self-
development, creativity, self-decision making and risk taking.
• According to oxford dictionary Entrepreneur is ‘one who
organizes and manages enterprise involving high risk’. But
researches indicates that entrepreneurs need not necessarily be
high risk takers, however, they reduce risk and increase
likelihood of success.
DEFINITIONS
• An Economist defines an entrepreneur as one who brings
resources, labor, material and other assets in to combinations
that make their value greater than before and also one who
introduces changes, innovations and a new order.
• A Psychologist defines an entrepreneur as a person who is
typically driven by a psychological force, which create a desire to
obtain or attain something.
• As per sociologist a person whose actions would determine social
status & contribute to societal development.
• As per Management expert a person who has a vision and
generates action plan to achieve it.
ENTREPRENEURSHIP AND
ECONOMIC DEVELOPMENT
• Entrepreneurs occupy a central position in a market economy. It’s
the entrepreneurs who serve as the spark plug in the economy’s
engine, activating and stimulating all economic activity.
• The economic success of the nations worldwide is the result of
encouraging and rewarding the entrepreneurial instinct.
• Entrepreneurs seek disequilibrium- a gap between the wants and
needs of customers and the products and services that are
currently available.
• The entrepreneur then brings together the factors of production
necessary to produce, offer and sell desired products and
services.
• They invest and risk their money- and other people’s money- to
produce a product or service that can be sold at a profit.
• An increase in the number of entrepreneurs leads to an increase
in economic growth. This effect is a result of a concrete
expression of their skills, and more precisely, their ability to
innovate. This can be termed as “the carrying out of new
combinations” by distinguishing five cases:
1. The introduction of a new product- that is one with which
consumers are not yet familiar- or of a new quality of a product.
2. The introduction of a new method of production, that is one not
yet tested by experience in the branch of manufacture concerned,
which need by no means be founded upon a discovery scientifically
new, and can also exist in a new way of handling a commodity
commercially
3. The opening of a new market, that is a market into which the
particular branch of manufacture of the country in question has not
previously entered, whether or not this market has existed before.
4. The conquest of a new source of supply of raw materials or half
manufactured goods, again irrespective of whether this source
already exists or whether it has first to be created.
5. The carrying out of the new organization of any industry, like the
creation of a monopoly position or the breaking up of a monopoly
position.
• Through this innovative activity, entrepreneur seeks to create new
profit opportunities.
• These opportunities can result from productivity increases, in
which case, their relationship to economic growth appears quite
clearly.
• Moreover, the disequilibrium created by the entrepreneur can be
encouraging for additional innovations and profit opportunities.
• Therefore, more entrepreneurs means more growth, which in turn
leads to more entrepreneurs.
5 ROLES OF ENTREPRENEURSHIP IN
ECONOMIC DEVELOPMENT
1. Wealth Creation and Sharing: By establishing the business entity,
entrepreneurs invest their own resources and attract capital (in
the form of debt, equity, etc.) from investors, lenders and the
public.
2. Create Jobs: Entrepreneurs are by nature and definition job
creators, as opposed to job seekers
3. Balanced Regional Development: Entrepreneurs setting up new
businesses and industrial units help with regional development
by locating in less developed and backward areas.
4. GDP and Per Capita Income: India’s MSME sector, comprised of
36 million units that provide employment for more than 80
million people, now accounts for over 37% of the country’s GDP.
5. Standard of Living: Increase in the standard of living of people in
a community is yet another key goal of economic development
Timing of Venture
Creations
•Early starters
•Experienced
•Mature
Type of Business
•Business Entrepreneurs
•Trading Entrepreneurs
•Industrial Entrepreneurs
•Corporate Entrepreneurs
•Agricultural Entrepreneurs
Use of Technology
•Technical Entrepreneurs
•Non-technical Entrepreneurs
•Professional Entrepreneurs
Motivation
•Pure Entrepreneurs
•Induced Entrepreneurs
•Motivated Entrepreneurs
•Spontaneous Entrepreneurs
Growth
•Growth Entrepreneurs
•Super Growth Entrepreneurs
Stage of Development
•First-Generation Entrepreneurs
•Modern Entrepreneurs
•Classical Entrepreneurs
Socio-Cultural Variables
•Social Entrepreneurs
•Entrepreneurs from
business family
•Women entrepreneurs
Others
•Innovative Entrepreneurs
•Adoptive or Imitating Entrepreneurs
•Fabian Entrepreneurs
•Drone Entrepreneurs
•Aspiring Entrepreneurs
•Lifestyle Entrepreneurs
•Mompreneurs
Entrepreneurs are broadly classified according to the types of business,
use of profession skills, motivation, growth and stage of development.
11
1. According to timing of venture creations:
a)



b.



Early Starters
Start venture with little or no full-time work experience
Often from family business
Suhas Gopinath started his company Gopals Inc. at the age of 14, in
USA as Indian laws do not permit a minor to run a company.
Experienced
Spent a few yrs in family business or a large company.
Usually, the venture is related to the same business as previously
engaged in.
Narayan Murthy together with his like minded professionals started
Infosys at the age of 35 years
c.
•
•
12
•
•
Mature
Very senior professionals, some at the level of CEO
Very high confidence and desire to do things in a way that may not
be totally acceptable to their earstwhile employers.
Ashok Soota and Subroto Bagchi quit Wipro to start Mindtree.
BVR Subbu, ex-CEO of Hyundai India, recently started a venture
that brought the plant of Daewoo in India.
2. According to type of business:
a)
•
•
•
Business Entrepreneurs :
Conceive an idea for a new product/service and then create
business to materialise idea in reality.
Tap both production and material resources to develop new
business opportunity.
Often small business entrepreneurs with small business units eg.
Printing press, advertising agency, textile processing house,
readymade garments or confectionary.
Trading Entrepreneur
13
b.
•
•
•
•
c.
•
•
Trading Activities not manufacturing work
Identifies potential markets, stimulates demand and creates
interest and demand among buyers to go in for his product.
Can be engaged in both domestic &overseas trade.
Whole sale trade, retail trade, Mall trading, exporters, importers,
stock trading, real estate.
Industrial Entrepreneur
Ability to convert economic resources and technology into
profitable venture
Essentially a manufacturer, identifies potential needs and starts
industrial units for new products.
Corporate Entrepreneur
14
d.
•
•
e.
•
•
•
Individual who plans, develops & manages a corporate body.
Corporate body is a form of business organisation, one body of
many individuals, large corporations, which are registered as
separate legal entity under some statute or act eg. Company
registered under companies act, or trust under trust act.
Agricultural entrepreneur
Agricultural activities such as raising & marketing of crops,
fertilizers and other inputs of agriculture.
Motivated to raise the productivity through mechanization and
technology.
Plantation, horticulture, dairy, forestry, floriculture, animal
husbandry, poultry, seeds.
3. According to use of technology:
15
a.
•
•
•
b.
•
c.
•
•
•
Technical Entrepreneur
Essentially an entrepreneur of craftsman type, develops high
quality goods due to craftsmanship.
Concentrates more on production than marketing.
Introduction techniques, innovations for production.
Non-technical Entrepreneur
Not concerned with technical aspect of production, but developing
alternative distribution strategies to promote their business.
Professional Entrepreneur
Interested in establishing a business but does not have interest in
managing or operating once it established.
Professional entrepreneur sells out running business and starts
another venture with the sales proceeds.
Such an Entrepreneur is dynamic who conceives new ideas to
develop new projects.
4. According to Motivation
16
a.
•
•
b.
•
c.
•
•
•
d.
•
•
•
Pure Entrepreneur
Motivated by psychological and economic rewards.
Undertakes entrepreneurial activities for personal; satisfaction in work, ego
or status.
Induced Entrepreneur
Induced to take entrepreneurship due to policy measures of the govt that
provides assistance, incentives, concessions and overhead facilities to start
ventures.
Motivated Entrepreneur
Desire for self-fulfillment is the motivation
Making and marketing new products for consumers
If successful, further motivated by reward in term of profit.
Spontaneous Entrepreneurs
Start business out of their natural talents
Initiative, boldness and confidence as motivation
Strong conviction and confidence in their ability.
5. According to Growth
17
a.
•
•
b.
•
•
Growth Entrepreneur
Takes up a high growth industry
Chooses an industry which has sustained growth prospects.
Super-Growth Entrepreneur
Those entrepreneur who have shown enormous growth of performance in
their venture.
The growth performance is identified by the profitability and liquidity of
funds.
6. According to stage of development
a.
•
•
b.
•
First-generation Entrepreneur
One who starts not from family business
Innovator, combining different skills and technologies to produce
marketable products or service.
Modern Entrepreneur
One who undertakes those ventures which go well along with changing
demand and suit in the current marketing needs.
c.
18
•
•
Classical Entrepreneur
Concerned with customer and marketing needs through the development of
self-supporting ventures.
Stereotype who aims to maximize economic returns at a consistent level
with the survival of the firm with or without the element of the growth.
7. Classification based on Socio-cultural Variables
a.
•
•
a.
•
•
Entrepreneurs from business family
Few socio-cultural groups have dominated business scene in India,
prominently , Marwadi, Gugrati, Parsee, Sindhi communities. Tatas, Birlas,
Wadias and Singhanias are all from business community.
Entrepreneurship is easier for someone from business family or business
community as having solid support structure.
Women entrepreneurs
Progressive laws & incentives have boosted women presence in
entrepreneurial activities in diverse fields.
Kiran Majumdar Shaw founded Biocon, which is now a leading Biotech firm
in India.
c.
19
•
•
Social Entrepreneurs
As per Ashoka – Innovators, a global non-profit organization, a social
entrepreneur is one who recognizes the part of society which is stuck and
provides new ways to get it unstuck.- child upliftment, environment,
women empowerment, blind, social unprivileged.
Verghese kurien of Amul, Rippan Kapur of CRY, Jeroo Billimoria of
childline(toll free help)
8. Other Categories:
a.
•
•
b.
•
•
c.
•
•
Innovative Entrepreneurs
Aggressive assemblage of information and analysis of results from
combination of factors.
Aggressive in experimentations and one who see and explore opportunity.
Adoptive or Imitating Entrepreneurs
Readiness to adopt successful innovation.
Follow innovators,imitate techniq & technologies.
Fabian Entrepreneurs
Great caution and scepticism in practicing change.
Shy & lazy, no will to introduce change or new method.
d.
20
•
•
e.
•
•
•
•
g.
•
Drone Entrepreneurs
Refusal to adopt and use new opportunities to make changes in production
methods.
Traditional ways, products losses its marketability and operations becomes
uneconomical.
Aspiring Entrepreneurs
Have dream of starting a business, yet not made the leap from their current
employment into the uncertainty of a startup.
Lifestyle Entrepreneurs
Develop an enterprise that fits their individual circumstances and style.
Basic intention is to earn an income for themselves & their families.
Mompreneurs
Homemaker entrepreneur
An entrepreneurial competence is an underlying characteristic of a
person, which results in effective and /or superior performance in a
business venture.
It is an underlying characteristics of a person, in that it may be motive,
traits, skills ,aspect of ones self-image, a body of knowledge, set of skills
and cluster of appropriate motives/ traits that an individual possess to
perform in his business.
Personal Entrepreneurial Competencies - The EMPRETEC Model
Research by McClelland and McBer, funded by USAID, has identified 14
personal entrepreneurial competencies (PECs) which appear to
characterize the behaviour of successful entrepreneurs. The study,
conducted in India, Ecuador and Malawi, also found that these PECs
transcended culture, country and continent.
These competencies can be grouped into 3 main clusters and the
EMPRETEC model has merged some of these competencies to derive 10
PECs.
22
Achievement Cluster
1. Opportunity Seeking and Initiative
- Does things before asked or forced to by events
- Acts to extend the business into new areas, products or services
- Seizes unusual opportunities to start a new business, obtain
financing, equipment, land work space or assistance
2. Risk Taking
- Deliberately calculates risks and evaluates alternatives
- Takes action to reduce risks or control outcomes
- Places self in situations involving a challenge or moderate risk
3. Demand for Efficiency and Quality
- Finds ways to do things better, faster, or cheaper
- Acts to do things that meet or exceed standards of excellence
- Develops or uses procedures to ensure work is completed on time or
that work meets agreed upon standards of quality
23
-
24
-
-
4. Persistence
- Takes action in the face of a significant obstacle
- Takes repeated actions or switches to an alternative strategy to
meet a challenge or overcome an obstacle
Takes personal responsibility for the performance necessary to
achieve goals and objectives
5. Commitment to the Work Contract
- Makes a personal sacrifice or expends extraordinary effort to
complete a job
Pitches in with workers or in their place to get a job done
Strives to keep customers satisfied and places long term good will
over short term gain
Planning Cluster
25
-
6. Information Seeking
- Personally seeks information from clients, suppliers or competitors
- Does personal research on how to provide a product or service
- Consults experts for business or technical advice
7. Goal setting
- Sets goals and objectives that are personally meaningful and
challenging
- Articulates clear and specific long range goals
- Sets measurable short term objectives
8. Systematic Planning and Monitoring
- Plans by breaking large tasks down into time-constrained sub-tasks
- Revises plans in light of feedback on performance or changing
circumstances
Keeps financial records and uses them to make business decisions
Power Cluster
9. Persuasion and Networking
• Uses deliberate strategies to influence or persuade
others
• Uses key people as agents to accomplish own
objectives
• Acts to develop and maintain business contracts
10. Independence and self-confidence
26
• Seeks autonomy from the rules or control of others
• Sticks with own judgement in the face of opposition or early
lack of success
• Expresses confidence in own ability to complete a difficult task
or meet a challenge
1. ECONOMIC FACTORS
a) Lack of adequate overhead facilities:
Profitable innovations require basic facilities like transportation,
communication, power supply etc. They reduce cost of production and
increase profit.
b) Non availability of capital
Inventions are capital oriented. In less developed countries most capital
equipment have to be imported which involves foreign exchange which
acts as a difficult problem.
c) Great risk
Risk is high in case of less developed countries as there is lack of reliable
information, markets for good and services is small etc.
d) Non availability of labor and skills
Though there is abundant labor supply there is generally scarcity of skills
at all levels.
27
2. SOCIAL FACTORS
A society that is rational in decision making would be favorable for
decision making. Education, research and training is given
less importance in less developed countries therefore there is very little
vertical mobility of labor.
3. CULTURAL FACTORS
Religious, social and cultural factors also influence the individual taking
up an entrepreneurial career, in some countries there is religious and
cultural belief that high profit is unethical. This type of belief inhibits
growth of entrepreneurship.
4. PERSONALITY FACTORS
In less developed countries the entrepreneur is looked upon with
suspicion. Public opinion in the less developed nations sees in
the entrepreneur only a profit maker and exploited.
28
5. MOTIVATING FACTORS
Motivation is the act of stimulating someone or oneself to get a desired
course of action, to push the right button to get the desired results. Some
of these are:
1.Education background
2.Occupational experience
3.Family background
4.Desire to work independently in manufacturing line
5.Assistance from financial institution
6.Availability of technology
7.Other factors
29
ENTREPRENEURSHIP
DEVELOPMENT PROGRAMMES
(EDPs)
•Entrepreneurship plays a vital role in the economic
development of a country.
After liberalisation and globalisation , the role of
entrepreneur has reduced. This calls for organisation of
EDP’s for the development and growth of entrepreneurs.
EDPs may be defined as:-
‘’a Programme designed to help an individual in
strengthening his entrepreneurial motive and in
acquiring skills and capabilities necessary for playing his
entrepreneurial role effectively’’.
Since 1950, a substantial volume of study has gone into the facets
of entrepreneur development in India.
It is possible to identify the individuals in all communities with
entrepreneurial talent, to motivate and train them through
properly organized programmes.
The EDP thus became a new concept for harnessing the vast
untapped human resources.
It strikes a welcome note in respect of change in perception and in
recognition of critical role the entrepreneurs play in industrial
development by creating potential avenues for self development.
Entrepreneurship development progam covers the entire venture
creation process, from idea generation to building viable global
businesses, with special emphasis on the nurturing roles of
corporations, universities, governments and foundations.
Using entrepreneurial culture as a model, participants learn what
they need to know in order to develop ideas into successful
businesses and to increase entrepreneurial opportunities in their
corporation, institutions and regions.
OBJECTIVES OF EDPs
1. To identify the potential entrepreneurs
2. To develop necessary knowledge and skills among the
participants.
3. To understand the process and procedure of setting up of
small business.
4. To train the entrepreneurs to understand environmental
threats and opportunities.
5. To provide help in identification and formulation of viable
projects.
6. To impart training in managerial understanding and skills.
NEED AND RELEVANCE OF
EDP’s
• It is now believed that Entrepreneurs are made and not born.
• EDP’s are based on this belief that they can inculcate relevant
attributes, change the outlook and convert the ideas into
action through the systematic and organised training.
• They tend to change the personality of the participants.
Induce motivation and competence among the young
prospective entrepreneurs.
• For rapid industrial development.
• To remove or reduce regional industrial imbalance.
ROLE & CONTRIBUTION OF EDP’s IN
INDIA
• Great role in increasing the supply of new
entrepreneurs to accelerate the process of
industrialisation.
• Elimination of unemployment & poverty
• Balanced Regional Development.
• Utilisation of local resources.
• Large scale employment can reduce unrest and
violence amongst the youth as they would be
gainfully employed.
PHASES OF EDP’s
1. PRE-TRAINING PHASE-
The activities and preparations require to launch the
programmes come under this phase. It includes:
• Identification & selection of Entrepreneurs(written test,
personal interviews)
• Designing of course Curriculum
• Selection of necessary tools, techniques and arrangements of
infrastructure.
• Arranging Guest Speakers after finalising training syllabus.
2. TRAINING PHASE.
The main objectives of this phase are:
To bring desirable change in the behaviour of trainees.
To develop ‘’need for achievement ‘’in employees i.e,
motivation.
Phase of guidance and monitoring
Practical exposure, preparation of project report.
Developing a goal directed behaviour pattern.
Raising positive thinking & belief.
3. POST- TRAINING PHASE
This phase involves the assessment to judge how far the
objectives have been achieved.
• This is basically a follow-up phase i.e, follow up meeting
of the officials of EDP with the participants.
• Suggesting guidelines for framing future policies to
improve performance.
• Assistance in selection location of unit.
• Help in bringing the trainees in touch with financial
institutions
Traits/qualities of an
entrepreneur
• Self confident
• Give positive response to challenges
• Ability to take calculated risk
• Flexible and adaptive
• Knowledge of market
• Ability to get along with others
• Independent mindedness
• Versatile knowledge
• Creative
• Dynamic leadership
• Response to suggestions
• Take initiatives
• Resourceful
• Perceptive and foresighted
• Response to criticism
Manager vs entrepreneur
• The entrepreneur is often contrasted with the
manager, as they are the key persons in an
enterprise that help in organizing managing and
controlling of the company.
• An entrepreneur is a person with an idea skills and
courage to take any risk to pursue that idea, to turn
it into reality.
• On the other hand manager as the name suggests
is the person who manages the operations and
functions of the organization.
Comparison Table
Basis for comparison Entrepreneur Manager
Meaning Refers to a person who creates
an enterprise, by taking financial
risk in order to get profit
Refers to an individual who takes
the responsibility of organizing
and controlling the organization.
Focus Business startup Ongoing operations
Primary motivation Achievement Power
Approach to task Informal Formal
Status Owner Employee
Reward Profit Salary
Risk orientation Risk taker Risk averse
Entrepreneur vs entrepreneurship
Entrepreneur is a living individual where as entrepreneurship is a process through
which entrepreneur goes during the conversion of the idea into reality
The difference between entrepreneur and entrepreneurship is as follows:-
• An entrepreneur is the one who undertakes and operates a new enterprise and
assumes some accountability for inherent risks
where as Entrepreneurship is the practice of stating new organization,
particularly new business generally in responses to identified opportunities.
• Entrepreneur is founder where as entrepreneurship ranges in scale from solo
projects to major undertakings
• Entrepreneur is a coordinator and entrepreneurship is the coordination
maintained by an entrepreneur
• Entrepreneur is an innovation where entrepreneurship is a process of
innovation
• The one who leads an enterprise towards its mission and vision is a n
entrepreneur where as the way in which an entrepreneur leads his manpower
motivates them for achievement of the firm goal is entrepreneurship.
• Entrepreneur bears risk of the firm and practicing of risk bearing is done under
entrepreneurship.
Entrepreneur vs administrator
• An entrepreneur starts and builds a business
enterprise. He is the leader of the company. An
administrator is someone who manages a
department, division, or functional area within an
organization.
Example of
entrepreneur and manager
Vijay Shekhar Sharma as an
entrepreneur
• Vijay Shekhar Sharma (born 1978) is an Indian billionaire businessman.
He is the founder of mobile payments company Paytm.
• Sharma was ranked as India's youngest billionaire in 2017 by
the Forbes with a net worth of $2.1 billion
Indra Nooyi as a manager
• Indra Nooyi is an Indian American business
executive, serving as chairman of PepsiCo,
the second largest food and beverage
business in the world by net revenue, and as
CEO for 12 years from 2006-2018.
THANK YOU

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Ed ppt unit 1

  • 1. Presented By: Chaitanya Ranga (021) Bhawna Singh (086) Kunal (041) Kamna (039) Nancy Bhatia (049) MBA curriculum UNIT - 1
  • 2. ENTREPRENEURSHIP CONCEPT AND DEFINITIONS • Entrepreneurship is the act of setting out on your own and starting a business instead of working for someone else in his business • Hence, anyone who exhibits the characteristics of self- development, creativity, self-decision making and risk taking. • According to oxford dictionary Entrepreneur is ‘one who organizes and manages enterprise involving high risk’. But researches indicates that entrepreneurs need not necessarily be high risk takers, however, they reduce risk and increase likelihood of success.
  • 3. DEFINITIONS • An Economist defines an entrepreneur as one who brings resources, labor, material and other assets in to combinations that make their value greater than before and also one who introduces changes, innovations and a new order. • A Psychologist defines an entrepreneur as a person who is typically driven by a psychological force, which create a desire to obtain or attain something. • As per sociologist a person whose actions would determine social status & contribute to societal development. • As per Management expert a person who has a vision and generates action plan to achieve it.
  • 4. ENTREPRENEURSHIP AND ECONOMIC DEVELOPMENT • Entrepreneurs occupy a central position in a market economy. It’s the entrepreneurs who serve as the spark plug in the economy’s engine, activating and stimulating all economic activity. • The economic success of the nations worldwide is the result of encouraging and rewarding the entrepreneurial instinct. • Entrepreneurs seek disequilibrium- a gap between the wants and needs of customers and the products and services that are currently available. • The entrepreneur then brings together the factors of production necessary to produce, offer and sell desired products and services.
  • 5. • They invest and risk their money- and other people’s money- to produce a product or service that can be sold at a profit. • An increase in the number of entrepreneurs leads to an increase in economic growth. This effect is a result of a concrete expression of their skills, and more precisely, their ability to innovate. This can be termed as “the carrying out of new combinations” by distinguishing five cases: 1. The introduction of a new product- that is one with which consumers are not yet familiar- or of a new quality of a product. 2. The introduction of a new method of production, that is one not yet tested by experience in the branch of manufacture concerned, which need by no means be founded upon a discovery scientifically new, and can also exist in a new way of handling a commodity commercially
  • 6. 3. The opening of a new market, that is a market into which the particular branch of manufacture of the country in question has not previously entered, whether or not this market has existed before. 4. The conquest of a new source of supply of raw materials or half manufactured goods, again irrespective of whether this source already exists or whether it has first to be created. 5. The carrying out of the new organization of any industry, like the creation of a monopoly position or the breaking up of a monopoly position.
  • 7. • Through this innovative activity, entrepreneur seeks to create new profit opportunities. • These opportunities can result from productivity increases, in which case, their relationship to economic growth appears quite clearly. • Moreover, the disequilibrium created by the entrepreneur can be encouraging for additional innovations and profit opportunities. • Therefore, more entrepreneurs means more growth, which in turn leads to more entrepreneurs.
  • 8. 5 ROLES OF ENTREPRENEURSHIP IN ECONOMIC DEVELOPMENT 1. Wealth Creation and Sharing: By establishing the business entity, entrepreneurs invest their own resources and attract capital (in the form of debt, equity, etc.) from investors, lenders and the public. 2. Create Jobs: Entrepreneurs are by nature and definition job creators, as opposed to job seekers 3. Balanced Regional Development: Entrepreneurs setting up new businesses and industrial units help with regional development by locating in less developed and backward areas. 4. GDP and Per Capita Income: India’s MSME sector, comprised of 36 million units that provide employment for more than 80 million people, now accounts for over 37% of the country’s GDP. 5. Standard of Living: Increase in the standard of living of people in a community is yet another key goal of economic development
  • 9. Timing of Venture Creations •Early starters •Experienced •Mature Type of Business •Business Entrepreneurs •Trading Entrepreneurs •Industrial Entrepreneurs •Corporate Entrepreneurs •Agricultural Entrepreneurs Use of Technology •Technical Entrepreneurs •Non-technical Entrepreneurs •Professional Entrepreneurs Motivation •Pure Entrepreneurs •Induced Entrepreneurs •Motivated Entrepreneurs •Spontaneous Entrepreneurs Growth •Growth Entrepreneurs •Super Growth Entrepreneurs Stage of Development •First-Generation Entrepreneurs •Modern Entrepreneurs •Classical Entrepreneurs Socio-Cultural Variables •Social Entrepreneurs •Entrepreneurs from business family •Women entrepreneurs Others •Innovative Entrepreneurs •Adoptive or Imitating Entrepreneurs •Fabian Entrepreneurs •Drone Entrepreneurs •Aspiring Entrepreneurs •Lifestyle Entrepreneurs •Mompreneurs
  • 10. Entrepreneurs are broadly classified according to the types of business, use of profession skills, motivation, growth and stage of development. 11 1. According to timing of venture creations: a)    b.    Early Starters Start venture with little or no full-time work experience Often from family business Suhas Gopinath started his company Gopals Inc. at the age of 14, in USA as Indian laws do not permit a minor to run a company. Experienced Spent a few yrs in family business or a large company. Usually, the venture is related to the same business as previously engaged in. Narayan Murthy together with his like minded professionals started Infosys at the age of 35 years
  • 11. c. • • 12 • • Mature Very senior professionals, some at the level of CEO Very high confidence and desire to do things in a way that may not be totally acceptable to their earstwhile employers. Ashok Soota and Subroto Bagchi quit Wipro to start Mindtree. BVR Subbu, ex-CEO of Hyundai India, recently started a venture that brought the plant of Daewoo in India. 2. According to type of business: a) • • • Business Entrepreneurs : Conceive an idea for a new product/service and then create business to materialise idea in reality. Tap both production and material resources to develop new business opportunity. Often small business entrepreneurs with small business units eg. Printing press, advertising agency, textile processing house, readymade garments or confectionary.
  • 12. Trading Entrepreneur 13 b. • • • • c. • • Trading Activities not manufacturing work Identifies potential markets, stimulates demand and creates interest and demand among buyers to go in for his product. Can be engaged in both domestic &overseas trade. Whole sale trade, retail trade, Mall trading, exporters, importers, stock trading, real estate. Industrial Entrepreneur Ability to convert economic resources and technology into profitable venture Essentially a manufacturer, identifies potential needs and starts industrial units for new products.
  • 13. Corporate Entrepreneur 14 d. • • e. • • • Individual who plans, develops & manages a corporate body. Corporate body is a form of business organisation, one body of many individuals, large corporations, which are registered as separate legal entity under some statute or act eg. Company registered under companies act, or trust under trust act. Agricultural entrepreneur Agricultural activities such as raising & marketing of crops, fertilizers and other inputs of agriculture. Motivated to raise the productivity through mechanization and technology. Plantation, horticulture, dairy, forestry, floriculture, animal husbandry, poultry, seeds.
  • 14. 3. According to use of technology: 15 a. • • • b. • c. • • • Technical Entrepreneur Essentially an entrepreneur of craftsman type, develops high quality goods due to craftsmanship. Concentrates more on production than marketing. Introduction techniques, innovations for production. Non-technical Entrepreneur Not concerned with technical aspect of production, but developing alternative distribution strategies to promote their business. Professional Entrepreneur Interested in establishing a business but does not have interest in managing or operating once it established. Professional entrepreneur sells out running business and starts another venture with the sales proceeds. Such an Entrepreneur is dynamic who conceives new ideas to develop new projects.
  • 15. 4. According to Motivation 16 a. • • b. • c. • • • d. • • • Pure Entrepreneur Motivated by psychological and economic rewards. Undertakes entrepreneurial activities for personal; satisfaction in work, ego or status. Induced Entrepreneur Induced to take entrepreneurship due to policy measures of the govt that provides assistance, incentives, concessions and overhead facilities to start ventures. Motivated Entrepreneur Desire for self-fulfillment is the motivation Making and marketing new products for consumers If successful, further motivated by reward in term of profit. Spontaneous Entrepreneurs Start business out of their natural talents Initiative, boldness and confidence as motivation Strong conviction and confidence in their ability.
  • 16. 5. According to Growth 17 a. • • b. • • Growth Entrepreneur Takes up a high growth industry Chooses an industry which has sustained growth prospects. Super-Growth Entrepreneur Those entrepreneur who have shown enormous growth of performance in their venture. The growth performance is identified by the profitability and liquidity of funds. 6. According to stage of development a. • • b. • First-generation Entrepreneur One who starts not from family business Innovator, combining different skills and technologies to produce marketable products or service. Modern Entrepreneur One who undertakes those ventures which go well along with changing demand and suit in the current marketing needs.
  • 17. c. 18 • • Classical Entrepreneur Concerned with customer and marketing needs through the development of self-supporting ventures. Stereotype who aims to maximize economic returns at a consistent level with the survival of the firm with or without the element of the growth. 7. Classification based on Socio-cultural Variables a. • • a. • • Entrepreneurs from business family Few socio-cultural groups have dominated business scene in India, prominently , Marwadi, Gugrati, Parsee, Sindhi communities. Tatas, Birlas, Wadias and Singhanias are all from business community. Entrepreneurship is easier for someone from business family or business community as having solid support structure. Women entrepreneurs Progressive laws & incentives have boosted women presence in entrepreneurial activities in diverse fields. Kiran Majumdar Shaw founded Biocon, which is now a leading Biotech firm in India.
  • 18. c. 19 • • Social Entrepreneurs As per Ashoka – Innovators, a global non-profit organization, a social entrepreneur is one who recognizes the part of society which is stuck and provides new ways to get it unstuck.- child upliftment, environment, women empowerment, blind, social unprivileged. Verghese kurien of Amul, Rippan Kapur of CRY, Jeroo Billimoria of childline(toll free help) 8. Other Categories: a. • • b. • • c. • • Innovative Entrepreneurs Aggressive assemblage of information and analysis of results from combination of factors. Aggressive in experimentations and one who see and explore opportunity. Adoptive or Imitating Entrepreneurs Readiness to adopt successful innovation. Follow innovators,imitate techniq & technologies. Fabian Entrepreneurs Great caution and scepticism in practicing change. Shy & lazy, no will to introduce change or new method.
  • 19. d. 20 • • e. • • • • g. • Drone Entrepreneurs Refusal to adopt and use new opportunities to make changes in production methods. Traditional ways, products losses its marketability and operations becomes uneconomical. Aspiring Entrepreneurs Have dream of starting a business, yet not made the leap from their current employment into the uncertainty of a startup. Lifestyle Entrepreneurs Develop an enterprise that fits their individual circumstances and style. Basic intention is to earn an income for themselves & their families. Mompreneurs Homemaker entrepreneur
  • 20. An entrepreneurial competence is an underlying characteristic of a person, which results in effective and /or superior performance in a business venture. It is an underlying characteristics of a person, in that it may be motive, traits, skills ,aspect of ones self-image, a body of knowledge, set of skills and cluster of appropriate motives/ traits that an individual possess to perform in his business. Personal Entrepreneurial Competencies - The EMPRETEC Model Research by McClelland and McBer, funded by USAID, has identified 14 personal entrepreneurial competencies (PECs) which appear to characterize the behaviour of successful entrepreneurs. The study, conducted in India, Ecuador and Malawi, also found that these PECs transcended culture, country and continent. These competencies can be grouped into 3 main clusters and the EMPRETEC model has merged some of these competencies to derive 10 PECs. 22
  • 21. Achievement Cluster 1. Opportunity Seeking and Initiative - Does things before asked or forced to by events - Acts to extend the business into new areas, products or services - Seizes unusual opportunities to start a new business, obtain financing, equipment, land work space or assistance 2. Risk Taking - Deliberately calculates risks and evaluates alternatives - Takes action to reduce risks or control outcomes - Places self in situations involving a challenge or moderate risk 3. Demand for Efficiency and Quality - Finds ways to do things better, faster, or cheaper - Acts to do things that meet or exceed standards of excellence - Develops or uses procedures to ensure work is completed on time or that work meets agreed upon standards of quality 23
  • 22. - 24 - - 4. Persistence - Takes action in the face of a significant obstacle - Takes repeated actions or switches to an alternative strategy to meet a challenge or overcome an obstacle Takes personal responsibility for the performance necessary to achieve goals and objectives 5. Commitment to the Work Contract - Makes a personal sacrifice or expends extraordinary effort to complete a job Pitches in with workers or in their place to get a job done Strives to keep customers satisfied and places long term good will over short term gain
  • 23. Planning Cluster 25 - 6. Information Seeking - Personally seeks information from clients, suppliers or competitors - Does personal research on how to provide a product or service - Consults experts for business or technical advice 7. Goal setting - Sets goals and objectives that are personally meaningful and challenging - Articulates clear and specific long range goals - Sets measurable short term objectives 8. Systematic Planning and Monitoring - Plans by breaking large tasks down into time-constrained sub-tasks - Revises plans in light of feedback on performance or changing circumstances Keeps financial records and uses them to make business decisions
  • 24. Power Cluster 9. Persuasion and Networking • Uses deliberate strategies to influence or persuade others • Uses key people as agents to accomplish own objectives • Acts to develop and maintain business contracts 10. Independence and self-confidence 26 • Seeks autonomy from the rules or control of others • Sticks with own judgement in the face of opposition or early lack of success • Expresses confidence in own ability to complete a difficult task or meet a challenge
  • 25. 1. ECONOMIC FACTORS a) Lack of adequate overhead facilities: Profitable innovations require basic facilities like transportation, communication, power supply etc. They reduce cost of production and increase profit. b) Non availability of capital Inventions are capital oriented. In less developed countries most capital equipment have to be imported which involves foreign exchange which acts as a difficult problem. c) Great risk Risk is high in case of less developed countries as there is lack of reliable information, markets for good and services is small etc. d) Non availability of labor and skills Though there is abundant labor supply there is generally scarcity of skills at all levels. 27
  • 26. 2. SOCIAL FACTORS A society that is rational in decision making would be favorable for decision making. Education, research and training is given less importance in less developed countries therefore there is very little vertical mobility of labor. 3. CULTURAL FACTORS Religious, social and cultural factors also influence the individual taking up an entrepreneurial career, in some countries there is religious and cultural belief that high profit is unethical. This type of belief inhibits growth of entrepreneurship. 4. PERSONALITY FACTORS In less developed countries the entrepreneur is looked upon with suspicion. Public opinion in the less developed nations sees in the entrepreneur only a profit maker and exploited. 28
  • 27. 5. MOTIVATING FACTORS Motivation is the act of stimulating someone or oneself to get a desired course of action, to push the right button to get the desired results. Some of these are: 1.Education background 2.Occupational experience 3.Family background 4.Desire to work independently in manufacturing line 5.Assistance from financial institution 6.Availability of technology 7.Other factors 29
  • 29. •Entrepreneurship plays a vital role in the economic development of a country. After liberalisation and globalisation , the role of entrepreneur has reduced. This calls for organisation of EDP’s for the development and growth of entrepreneurs. EDPs may be defined as:- ‘’a Programme designed to help an individual in strengthening his entrepreneurial motive and in acquiring skills and capabilities necessary for playing his entrepreneurial role effectively’’.
  • 30. Since 1950, a substantial volume of study has gone into the facets of entrepreneur development in India. It is possible to identify the individuals in all communities with entrepreneurial talent, to motivate and train them through properly organized programmes. The EDP thus became a new concept for harnessing the vast untapped human resources. It strikes a welcome note in respect of change in perception and in recognition of critical role the entrepreneurs play in industrial development by creating potential avenues for self development.
  • 31. Entrepreneurship development progam covers the entire venture creation process, from idea generation to building viable global businesses, with special emphasis on the nurturing roles of corporations, universities, governments and foundations. Using entrepreneurial culture as a model, participants learn what they need to know in order to develop ideas into successful businesses and to increase entrepreneurial opportunities in their corporation, institutions and regions.
  • 32. OBJECTIVES OF EDPs 1. To identify the potential entrepreneurs 2. To develop necessary knowledge and skills among the participants. 3. To understand the process and procedure of setting up of small business. 4. To train the entrepreneurs to understand environmental threats and opportunities. 5. To provide help in identification and formulation of viable projects. 6. To impart training in managerial understanding and skills.
  • 33. NEED AND RELEVANCE OF EDP’s • It is now believed that Entrepreneurs are made and not born. • EDP’s are based on this belief that they can inculcate relevant attributes, change the outlook and convert the ideas into action through the systematic and organised training. • They tend to change the personality of the participants. Induce motivation and competence among the young prospective entrepreneurs. • For rapid industrial development. • To remove or reduce regional industrial imbalance.
  • 34. ROLE & CONTRIBUTION OF EDP’s IN INDIA • Great role in increasing the supply of new entrepreneurs to accelerate the process of industrialisation. • Elimination of unemployment & poverty • Balanced Regional Development. • Utilisation of local resources. • Large scale employment can reduce unrest and violence amongst the youth as they would be gainfully employed.
  • 35. PHASES OF EDP’s 1. PRE-TRAINING PHASE- The activities and preparations require to launch the programmes come under this phase. It includes: • Identification & selection of Entrepreneurs(written test, personal interviews) • Designing of course Curriculum • Selection of necessary tools, techniques and arrangements of infrastructure. • Arranging Guest Speakers after finalising training syllabus.
  • 36. 2. TRAINING PHASE. The main objectives of this phase are: To bring desirable change in the behaviour of trainees. To develop ‘’need for achievement ‘’in employees i.e, motivation. Phase of guidance and monitoring Practical exposure, preparation of project report. Developing a goal directed behaviour pattern. Raising positive thinking & belief.
  • 37. 3. POST- TRAINING PHASE This phase involves the assessment to judge how far the objectives have been achieved. • This is basically a follow-up phase i.e, follow up meeting of the officials of EDP with the participants. • Suggesting guidelines for framing future policies to improve performance. • Assistance in selection location of unit. • Help in bringing the trainees in touch with financial institutions
  • 38. Traits/qualities of an entrepreneur • Self confident • Give positive response to challenges • Ability to take calculated risk • Flexible and adaptive • Knowledge of market • Ability to get along with others • Independent mindedness • Versatile knowledge • Creative
  • 39. • Dynamic leadership • Response to suggestions • Take initiatives • Resourceful • Perceptive and foresighted • Response to criticism
  • 40. Manager vs entrepreneur • The entrepreneur is often contrasted with the manager, as they are the key persons in an enterprise that help in organizing managing and controlling of the company. • An entrepreneur is a person with an idea skills and courage to take any risk to pursue that idea, to turn it into reality. • On the other hand manager as the name suggests is the person who manages the operations and functions of the organization.
  • 41. Comparison Table Basis for comparison Entrepreneur Manager Meaning Refers to a person who creates an enterprise, by taking financial risk in order to get profit Refers to an individual who takes the responsibility of organizing and controlling the organization. Focus Business startup Ongoing operations Primary motivation Achievement Power Approach to task Informal Formal Status Owner Employee Reward Profit Salary Risk orientation Risk taker Risk averse
  • 42. Entrepreneur vs entrepreneurship Entrepreneur is a living individual where as entrepreneurship is a process through which entrepreneur goes during the conversion of the idea into reality The difference between entrepreneur and entrepreneurship is as follows:- • An entrepreneur is the one who undertakes and operates a new enterprise and assumes some accountability for inherent risks where as Entrepreneurship is the practice of stating new organization, particularly new business generally in responses to identified opportunities. • Entrepreneur is founder where as entrepreneurship ranges in scale from solo projects to major undertakings • Entrepreneur is a coordinator and entrepreneurship is the coordination maintained by an entrepreneur • Entrepreneur is an innovation where entrepreneurship is a process of innovation • The one who leads an enterprise towards its mission and vision is a n entrepreneur where as the way in which an entrepreneur leads his manpower motivates them for achievement of the firm goal is entrepreneurship. • Entrepreneur bears risk of the firm and practicing of risk bearing is done under entrepreneurship.
  • 43. Entrepreneur vs administrator • An entrepreneur starts and builds a business enterprise. He is the leader of the company. An administrator is someone who manages a department, division, or functional area within an organization.
  • 45. Vijay Shekhar Sharma as an entrepreneur • Vijay Shekhar Sharma (born 1978) is an Indian billionaire businessman. He is the founder of mobile payments company Paytm. • Sharma was ranked as India's youngest billionaire in 2017 by the Forbes with a net worth of $2.1 billion
  • 46. Indra Nooyi as a manager • Indra Nooyi is an Indian American business executive, serving as chairman of PepsiCo, the second largest food and beverage business in the world by net revenue, and as CEO for 12 years from 2006-2018.