LESSON # 2

By Abhishek
Duttagupta
 Learning Outcomes

 The Entrepreneurial decision process

 Role of Entrepreneurship in Economic Development
 Ethics and Social responsibility of Entrepreneurs
The Entrepreneurial Decision Process
• Entrepreneurial decision process -
– Entails a movement from something to something.
– Movement from a present lifestyle to forming a new
enterprise .

Reasons For Possibilities

Desire to
The Present Changing to Become An
Become An
Status The Present An Entrepreneur
Entrepreneur
Status Entrepreneur
Steps in the Entrepreneurial Process
• Once the decision to become an entrepreneur is taken,
the entrepreneurial process begins.
• The 5 stages of entrepreneurial process are –
1. Discovery
2. Concept Development
3. Resourcing
4. Actualization
5. Harvesting

Concept
Discove Resourci Actualizati Harvesti
Developm
ry ent ng on ng
 Steps in the Entrepreneurial Process (Contd..)
1. Discovery: The stage in which the entrepreneur generates
ideas, recognizes opportunities, and studies the market.
2. Concept Development: Develop a business plan: a detailed proposal
describing the business idea.
3. Resourcing: The stage in which the entrepreneur identifies and
acquires the financial, human, and capital resources needed for
the venture startup, etc.
4. Actualization: The stage in which the entrepreneur operates the
business and utilizes resources to achieve its goals/objectives.
5. Harvesting: The stage in which the entrepreneur decides on business’s
future growth/ development, or demise.
 Step 1: Discovery
•The stage in which the entrepreneur generates
ideas, recognizes opportunities, and studies the
market.

•Entrepreneurs consider the following:

•Hobbies or Skills
•Consumer Needs and Wants
•Conduct Surveys and Questionnaires
•Study Demographics
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Step 2: Concept Development

•Entrepreneurs prepare the following in this

step:
•Develop a Business Plan
– A detailed proposal describing the business idea
•Choose Location for the Business
– Is the business online or does it have a physical location for
customers to visit to purchase products, services or combinations.
•Decide if the idea will need a Patent or Trademark
– Patent –
– Trademark -
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 Step 3: Resourcing
•The stage in which the entrepreneur identifies
and acquires the financial, human, and capital
resources needed for the venture startup, etc.

•Entrepreneurs contemplate the following:

•Identify Potential Investors
•Apply for loans, grants and financial assistance
•Hire employees

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 Step 4: Actualization
•The stage in which the entrepreneur operates
the business and utilizes resources to achieve its
goals / objectives

•Entrepreneurs prepare for the following:

•Grand Opening of the Business
•Day to Day Operations of the Business

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 Step 5: Harvesting
•The stage in which the entrepreneur decides on
venture’s future growth, development, or
demise.

•Entrepreneurs consider the following:

•Future Plans for the Business:
– Expansion to additional locations
– Company to change structure

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Role Of Entrepreneurship In Economic Development
• Entrepreneurship is one of the most important input in
economic
the development of a country.
• The entrepreneur acts as a trigger head to give spark to economic
activities by his entrepreneurial decisions.
• The entrepreneur plays a pivotal role not only in the development
of industrial sector of a country but also in the development of
farm and service sector.
• The crucial role played by the entrepreneurs in the development of
the Western countries has made the people of
underdeveloped
countries too much conscious of the significance of
entrepreneurship for economic development.
Role Of Entrepreneurship In Economic Development
1. Promotes Capital Formation
2. Creates Large-Scale Employment Opportunities
3. Promotes Balanced Regional Development
4. Reduces Concentration of Economic Power
5. Wealth Creation and Distribution
6. Increasing Gross National Product and Per Capita Income
7. Improvement in the Standard of Living
8. Promotes Country's Export Trade
9. Induces Backward and Forward Linkages
10. Facilitates Overall Development
 Role Of Entrepreneurship In Economic Development
• Promotes Capital Formation
• Entrepreneurs promote capital formation by mobilizing the idle
savings of public.
• They employ their own as well as borrowed resources for setting
up their
• enterprises.
• Creates Large-Scale Employment Opportunities
• Entrepreneurs provide immediate large-scale
employment to the
• unemployed which is a chronic problem of
Role Of Entrepreneurship In Economic Development
• Promotes Balanced Regional Development
• Entrepreneurs help to remove regional disparities through setting up of
industries in less developed and backward areas.
• The growth of industries and business in these areas lead to a large
number of public benefits like road transport, health,
education, entertainment, etc.
• Reduces Concentration of Economic Power
• Industrial development normally lead to concentration of economic power
in the hands of a few individuals which results in the
growth of monopolies.
• In order to redress this problem a large number of entrepreneurs need to
be developed.
Role Of Entrepreneurship In Economic Development
• Wealth Creation and Distribution
• It stimulates equitable redistribution of wealth and income in the interest
of the country to more people and geographic areas, thus giving
benefit to larger sections of the society.
• Increasing Gross National Product and Per Capita Income
• Entrepreneurs are always on the look out for opportunities.
• They explore and exploit opportunities,, encourage effective resource
mobilization of capital and skill, bring in new products and
services and develops markets for growth of the economy.
• In this way, they help increasing gross national product as well as per
capita income of the people in a country.
 Role Of Entrepreneurship In Economic Development

• Improvement in the Standard of Living

• Increase in the standard of living of the people is a characteristic
feature of economic development of the country.
• Entrepreneurs play a key role in increasing the standard of living
of the people by adopting latest innovations in the production of
wide variety of goods and services in large scale that too at a
lower cost.

• Promotes Country's Export Trade

• Entrepreneurs help in promoting a country's export-trade, which
is an important ingredient of economic development.
Role Of Entrepreneurship In Economic Development
• Induces Backward and Forward Linkages
• Entrepreneurs like to work in an environment of change and try to
maximize profits by innovation.
• When an enterprise is established in accordance with the changing
technology, it induces backward and forward linkages which
stimulate the process of economic development in the country.
• Facilitates Overall Development
• Entrepreneurs act as catalytic agent for change which results in chain
reaction by multiplying their entrepreneurial activities, thus
creating an environment of enthusiasm and conveying an
impetus for overall development of the area
Ethics & Social Responsibility Of
Entrepreneurs
What Are Ethics?
• Individual values form the basis of ethics, a set of moral principles
that govern decisions and actions.
• To act ethically is to behave in ways that are in keeping with certain
values.
• Universal values are values that are shared by all
cultures throughout history.
• Business ethics are moral principles applied to business issues and
actions.
• Entrepreneurs have considerable influence on their
company’s business ethics.
 Why Practice Business Ethics?
• The main reason for behaving ethically, in business or in any area of
life is simply that it’s the right thing to do.

• Three practical reasons why you should practice business ethics:

• Customers are more confident when buying goods
and services from an ethical company.
• An ethical workplace motivates employees.
• Ethical behavior also prevents legal problems.
Establishing an Ethical Workplace
• Universal values establish a strong foundation for society and are
also a good basis for running your business.

• To deter unethical behavior, companies try to create transparency, or

openness and accountability in business decisions and actions.
• To enhance transparency, companies today are using social media,
which are interactive electronic forms of communication such
as blogs and message boards.
 Ethical Issues for Entrepreneurs
• When faced with an ethical decision, it’s best to rely on your own strong
personal values to help guide your response.
• Intellectual property is artistic and industrial creations of the mind.
• Copyright is the exclusive right to perform, display, copy, or
distribute an artistic work.
• A patent is the exclusive right to make, use, or sell a device or
process.
• A trademark is a symbol that indicates that the use of a brand or
brand name is legally protected and cannot be
used by other businesses.
• A conflict of interest exists when personal considerations
and professional obligations interfere with each other.
• Confidentiality involves respecting the privacy of others.
 Corporate Social Responsibility
• Corporate social responsibility means that businesses act in ways
that balance profit and growth with the good of society.
• Corporate social responsibility often translates into profits. This
advantage for business is sometimes described as “doing well
by doing good.”
• One type of socially-responsible corporate behavior is ethical
sourcing, which means buying from suppliers who provide
safe working conditions and respect workers’ rights
 Responsibility To The Individuals
• Corporate social responsibility affects employees,
customers,
investors, and creditors.
• Entrepreneurs have legal obligations to provide a safe workplace and
fair employment policies.
• Business owners are bound by law to treat customers fairly.
• Acting responsibly toward suppliers or vendors results in making the
best choices of materials and using them wisely.
• Investors and creditors provide the money to start and run a
business. They must believe in both the idea behind the
business and the entrepreneur.
 Responsibility To The Environment
• Sustainable Design - Sustainable products meet the planet’s
current needs while preserving resources for future
generations.

• Alternative Energy - Researchers are working to make fossil-fuel

alternatives such as solar, wind, and hydrogen power
more efficient.

• Organics - Organic produce, grains, and meats make up a small

but steadily growing segment of the food market.

• Fair Trade - This is a way of doing business based on principles of

social and environmental responsibility and
promoting sustainable growth.
 The Energy-Efficient Workplace
• Creating an energy-efficient workplace saves money and can
draw customers.
• Five ways that a business can lower its expenses, while also helping
the environment include:
• Getting into the recycling loop.
• Doing business electronically.
• Buying supplies in bulk.
• Replacing incandescent light bulbs with fluorescent ones.
• Using environmentally friendly transportation.
 Responsibility to the Community
• Businesses support disadvantaged and needy people, either for
financial gain or because "It's the right thing to do."
• Cause-related marketing is a partnership between a business and a
nonprofit group for the benefit of both. It increases sales for
the business and raises money and awareness for the nonprofit
group.
• Sponsorship is when a business sponsors a community event or
service in exchange for advertising.
• With facilitated giving, a business makes it easier for customers to
contribute to a cause.
• Philanthropy occurs when business leaders donate money and other
resources for socially beneficial causes.
Thank
You !!