Competencies of Entrepreneurship

1. CHAPTER 2
COMPETENCIES OF
ENTREPRENEURSHIP

2. ENTREPRENEURIAL
COMPETENCIES

3. The term “Entrepreneurial Competencies”
refers to the abilities or skills that should be
possessed by successful entrepreneurs in
order to perform entrepreneurial functions
effectively.
PERSONAL ENTREPRENEURIAL
COMPETENCIES (PECs)_

4. Entrepreneurial Competencies
McClelland and McBer (1985)
01 06
05
02
03 04
Efficiency orientation
Information seeking
Systematic planning
Sees and acts on opportunities
Persistence
Initiative

5. Entrepreneurial Competencies
McClelland and McBer (1985)
07 12
11
08
09 10
Use of influence strategies
Persuasion
Self-confidence
Assertiveness
Problem solving

6. IMPORTANCE OF
ENTREPRENEURSHIP

7. MINDMAP DIAGRAM
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Provide
avenues
Healthy
entrepreneurial
culture
Enterprising
Country
Allocate resources
productively
and efficiently
Create
wealth
Importance

8. 1. Providing leadership in the industrial
development
 An entrepreneur is the combination of two
skills – an ideal person and a manager
 There must be persons who have vision,
initiative and drive to utilize the resources.
 These qualities and abilities are combined
only in entrepreneurs.
How Entrepreneurship Impacts a Nation?

9. 2. Introducing innovations and changes
 Entrepreneur always looks for changes
 Entrepreneur not only combines the
factors of production but also introduces
new combinations of factors.
 Responds to changes and exploits it as an
opportunity.

10. 3. Increasing productivity
 The entrepreneur allocates scarce
resources & co-ordinates the various
factors of production.
 An entrepreneur employs each factor in
the right proportion by using the best
technical devices, division of labour, etc.
 An entrepreneur tries to eliminate waste in
production.

11. 4. Providing employment
 Entrepreneurship generates employment
and income.
 It also helps to reduce unemployment
which is the root of all socio-economic
problems.

12. 5. Increasing the standard of living of the
people
 Entrepreneurs can contribute much to the
growth of national income of a country by
exploiting natural resources, creating
wealth and generating employment and
income.
 A country is said to have achieved
economic development only when its
people enjoy a higher standard of living.

13. FACTORS AFFECTING
ENTREPRENEURSHIP

14. FACTORS AFFECTING
ENTREPRENEURIAL GROWTH
Entrepreneurial
Growth
Economic Factors
Non-Economic
Factors
•Social Condition
•Psychological Factors
Government Action

15. 1. Economic factors
From a strictly economic viewpoint, it can be said that the
same factors which promote economic development
account for the emergence of entrepreneurship also.
Economic Factors
Capital
Labour
Raw Materials
Market

16.  Capital:
• Capital is one of the most important prerequisites
to establish an enterprise.
• Availability of capital facilitates the entrepreneur
to bring together the land of one, machine of
another and raw material of yet another to
combine them to produce goods.
• Capital is therefore, regarded as lubricant to the
process of production/render services.
 Labour:
• The quality rather quantity of labour in another
factor which influences the emergence of
entrepreneurship.

17.  Raw Materials:
• The necessity of raw material hardly needs any
emphasis for establishing any industrial activity
and therefore it influences the emergence of
entrepreneurship.
• In the absence of raw materials, neither any
enterprise can be established nor an entrepreneur
can emerged.
 Market:
• The fact remains that the potential of the market
constitutes the major determinant of probable
rewards from entrepreneurial function.
• The size and composition of market both influence
entrepreneurship in their own ways.

18. Non-Economic factors
Social Conditions
Legitimacy of Entrepreneurship Social Mobility Security
Psychological Factors
Need Achievement
2. Non-economic factors

19. Social Conditions
• Legitimacy of Entrepreneurship: The proponents of non-
economic factors give emphasis to the relevance of a system
of norms and values within a socio-cultural setting for the
emergence of entrepreneurship.
• Social Mobility: Social mobility involves the degree of
mobility, both social and geographical, and the nature of
mobility channels within a system.
• Security: Security is a significant factor for entrepreneurial
development. If individuals are fearful of losing their
economic assets or of being subjected to various negative
sanctions, they will not be inclined to increase their insecurity
by behaving entrepreneurially.

20. Psychological Factor
 Need Achievement:
• If the average level of need achievement in a
society is relatively high, one would expect a
relatively high amount of entrepreneurship
development in the society.

21. 3. Government action
• The government by its actions or failure to act also does
influence both the economic and non-economic factors
for entrepreneurship development.
• Any interested government in economic can help,
through its clear expressed industrial policy, promote
entrepreneurship in one way or other, by creating basic
facilities, utilities and services and by providing incentives
and concessions.
• The government can provide the prospective
entrepreneurs a facilitative socio-economic setting. Such
conductive setting minimizes the risks which the
entrepreneurs are to encounter.
• The supportive actions of the government appears as the
most conductive to the entrepreneurial growth.

23. Thanks!
Any questions?