UNIT I : ENTREPRENEURSHIP
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”.
Entrepreneurship refers to all those activities which are to be
carried out by a person to establish and to run the business
enterprises in accordance with the changing social, political and
economic environments.
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.
• 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.
ENTREPRENEUR ENTREPRENEURSHIP ENTERPRISE
PERSON PROCESS OBJECT
11/28/2014
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.
Entrepreneur:
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.
ENTREPRENEUR
• Entrepreneurs are business people who can detect and sense the
availability of business opportunities in any given scenario.
An entrepreneur is an aggressive catalyst for change in
the world of business.
They will utilize these opportunities to create new products by
employing new production methods in different markets.
Entrepreneurs are, thus, defined as ―individuals or groups
of individuals who carry out entrepreneurship activities that
are based on their innovative approaches to solving real-word
problems.
Top 10 Most Famous Entrepreneurs in the World
CHARACTERISTICS OF AN ENTREPRENEUR
• FACILITATING CHARACTER
• SELF-CONFIDENCE
• WORK WITH VISION AND MISSION
• HIGH DEGREE OF ENDURANCE
• TROUBLE SHOOTING NATURE
• INITIATIVE AND ENTERPRISING PERSONALITY
• CALCULATED RISK-TAKING ABILITY
• BUSINESS ACUMEN AND SINCERITY
• PRUDENCE
• SELF-RELIANCE AND INDEPENDENCE
• HIGHLY OPTIMISTIC
• KEEN FORSIGHT
QUALITIES OF AN ENTREPRENEUR
Self-confidence Emotional tolerance
Risk-taking ability Leadership quality
Decision-making ability Technical skill
Competitive Managerial skill
Intelligent Conflict resolution skill
Visualization Organizing skill
Patience High motivation
Reality-oriented Creative
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.
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.
TYPES OF ENTREPRENEURS
CLASSIFICATION BY CLARENCE DANHOF:
On the basis of American agriculture, classified entrepreneurs in
the following categories:
•INNOVATIVE ENTREPRENEURS
•ADOPTIVE OR IMITATIVE ENTREPRENEURS
•FABIAN ENTREPRENEURS
•DRONE ENTREPRENEURS
INNOVATIVE ENTREPRENEURS
• They are more interested in introducing some new ideas into
the market, organization or in the nation.
• They are drawn towards innovations and invest a lot of time
and wealth in doing research and development.
•An innovative entrepreneur, introduces new goods, inaugurates
new methods of production, discovers new markets and
reorganizes the enterprise.
ADOPTIVE OR IMITATIVE ENTREPRENEURS
•Imitative entrepreneurs do not innovate the changes themselves,
they only imitate techniques and technology innovated by others.
•They also known as replicative entrepreneurs.
•They copy and learn from the innovating entrepreneurs. While
innovating entrepreneurs are creative, imitative entrepreneurs are
adoptive.
FABIAN ENTREPRENEURS
• They are not prone to sudden decisions and try to shy away
from any innovations or change that doesn‘t fit their narrative.
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.
DRONE ENTREPRENEURS
• Drone entrepreneurs are those who refuse to adopt and use
opportunities to make changes in production.
• They want to do business in their own traditional or orthodox
methods of production and systems.
• Such people attach pride and tradition to even outdated
methods of doing business.
INTRAPRENEUR
“An employee in a large corporation who receives
freedom and financial support to create products,
services and systems”.
“An inside entrepreneur in a large firm, using
entrepreneurial skills without incurring risks.”
ENTREPRENEUR VS INTRAPRENEUR
ENTREPRENEUR INTRAPRENEUR
• Independent • Dependent
• Need not be highly educated • Highly educated
• Fund raising • No fund raising
• Risk bearing • No risk bearing
• Routine work • Specialist
• Operation from outside • Operation from inside
• Strong authoritarian • Less authoritarian
ENTREPRENEURSHIP IN ECONOMIC
GROWTH
1. Promotes capital formation 6. Increasing gross national
product and per capita income
2. Creates large-scale
employment opportunities 7. Improvement in the standard
of living
3. Promotes balanced regional
development 8. Promotes country export’s
trade
4. Reduces concentration of
economic power 9. Induces backward and
forward linkage
5. Wealth creation and
distribution 10. Facilitates overall
development
FACTORS AFFECTING ENTREPRENEURIAL
GROWTH
1. Aspiration and Attitude 7. Business Competition
2. Personal Factors 8. Economic and Business
Environment
3. Family Circumstances
9. Support System
4. Government Policies,
Facilities, and Incentives 10. Attitude of Big
Entrepreneurs
5. Social and Cultural Factors
11. Role of Banks and
6. Progeny and Traditions Financial Institutions
THE ENTREPRENEURIAL PROCESS
• IDENTIFY AN OPPORTUNITY
1
• ESTABLISH VISION
2
• PERSUADE OTHERS
3
• GATHER RESOURCES
4
• CREATE NEW VENTURE , PRODUCT OR MARKET
5
• CHANGE OR ADAPT WITH TIME
6
ENTREPRENEURIAL COMPETENCIES/ TRAITS
KNOWLEDGE
TRAITS
MOTIVE SKILL
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.
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.
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.
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.
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.
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.
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.
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.
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.
