ENTREPRENEURSHIP DEVELOPMENT MODULE 1 PPT.pptx

ENTREPRENEURSHIP DEVELOPMENT
BY
PRASANNA H N
Asst Professor, SVCE

Meaning of entrepreneur
• An entrepreneur
is someone who has an
idea and who works to
create a product or
service that people will
buy, as well as an
organization to support
that effort. An
entrepreneur takes on
most of the risk and
initiative for their new
business, and is often
seen as a visionary or
innovator.

Evolution of
Entrepreneurship
• the concept entrepreneur is derived from the French concept
“entreprendre” which literarily is equivalent to the English concept
“to undertake”. From the business point of view, to undertake simply
means to start a business
• From the historical point of view, Schumpeter (1951) opined that the
French economist Richard Cantillon, was the first to introduce the
concept "entrepreneur" in his work in 1755. He viewed the
entrepreneur as a risk taker (Burnett, 2000).
• some scholars contend that it was an economist, Jean- Baptiste Say,
who analysed the concept in an advanced way in his work in 1821
where he identified entrepreneur as new economic phenomenon

Evolution of
Entrepreneurship
• Given the foregoing, we can infer that the concept “entrepreneur” is
almost as old as the formal discipline of economics itself
(Schumpeter, 1951) especially given the fact that it was economists
such as Adam Smith, David Ricardo, and John Stuart Mill who have
written extensively on it, albeit referring to it as "business
management”.
• However, unlike Smith and Ricardo, Mill stressed the significance of
entrepreneurship for economic growth. Another renowned
economist, Alfred Marshall buttressed Mill’s view by formally
recognizing entrepreneurship as an important factor of production in
1890; he viewed entrepreneurship as organization creation and
believed that entrepreneurship is the driving element behind
organization (Schumpeter, 1951; Burnett, 2000).

Definitions
• (i) According to Oxford Dictionary an entrepreneur is “A
person who sets up a business or businesses, taking on
financial risks in the hope of profit”.
• (ii) According to the International Encyclopedia, an
entrepreneur is “An individual who bears the risk of
operating a business in the face of uncertainty about the
future conditions”.
• (iii) Schumpeter’s Definition – The entrepreneur, in an
advanced economy is an individual who introduces
something new in the economy – a method of production
not yet tested by experience in the branch of
manufacturing, a product with which consumers are not
yet familiar, a new source of raw material or of new
markets and the like”.

Definitions
• (iv) Adam Smith’s definition – “The entrepreneur is an
individual, who forms an organization for commercial purpose.
She/he is proprietary capitalist, a supplier of capital and at the
same time a manager who intervenes between the labour and
the consumer. “Entrepreneur is an employer, master,
merchant but explicitly considered as a capitalist”.
• (v) Peter F. Drucker’s Views on Entrepreneur – “An
entrepreneur is the one who always searches for change,
responds to it and exploits it as an opportunity. Innovation is
the specific tool of entrepreneurs, the means by which they
exploit changes as an opportunity for a different business or
different service”.
• (vi) In the 20th century the theorist Arthur H. Cole defined an
entrepreneur as an ‘organization builder’.

Functions of an Entrepreneur
• (i) Innovation and Creativity –
Innovation generally refers to
changing processes or creating more
effective processes, products and
ideas. For businesses, this could mean
implementing new ideas, creating
dynamic products or improving your
existing services. Creativity is defined
as “the tendency to generate or
recognize ideas, alternatives, or
possibilities that may be useful in
solving problems, communicating with
others. Creativity and innovation have
always been recognized as a sure path
to success. Entrepreneurs
think outside of the box and explore
new areas for cost-effective business
solutions.

• (ii) Risk taking and Achievement – Entrepreneurship is a process in
which the entrepreneur establishes new jobs and firms, new
Creative and growing organization which is associated with risk, new
opportunities and achievement. It results in introducing a new
product or service to society. In general, entrepreneurs accept four
types of risks namely Financial Risk, Job Risk, Social & Family Risk,
Mental & Health Risk, which are as follows:
• (a) Financial Risk – Most of entrepreneurs begin by using their own
savings and personal effects and if they fail, they have the fear of
losing it. They take risk of failure.
• (b) Job Risk – Entrepreneurs, not only follow the ideas as working
situations, but also consider the current risks of giving up the job &
starting a venture. Several entrepreneurs have the history of having a
good job, but gave it up, as they thought that they were not cut out
for a job.

• (c) Social and Family Risk – The beginning of
entrepreneurial job needs a high energy which is time
consuming. Because of these undertakings, he/she may
confront some social and family damages like family
and marital problems resulting on account of absence
from home and not being able to give adequate time to
family.
• (d) Mental Health Risk – Perhaps the biggest risk that
an entrepreneur takes it is, the risk of mental health.
The risk of money, home, spouse, child, and friends
could be adjusted but mental tensions, stress, anxiety
and the other mental factors have many destructive
influences because of the beginning and continuing of
entrepreneurial activity. This can even lead to
depression, when faced with failure.

• (iii) Organization and Management – The entrepreneurial
organization is a simple organizational form that includes,
one large operational unit, with one or a few individuals in
top management. Entrepreneurial management means the
skills necessary to successfully develop and manage a
business enterprise. A small business start-up under an
owner-manager is an example of an entrepreneurial
organization. Here, the owner-manager generally
maintains strict control over business operations. This
includes directing the enterprise’s core management
functions. According to Mintzberg, these include
the interpersonal roles, informational roles and decision-
making roles. The smaller the organization, the more
concentrated these roles are in the hands of the owner-
manager. The entrepreneurial organization is generally
unstructured.

• (iv) Research – An entrepreneur is a practical dreamer and
does a lot of ground-work before taking a leap in his/her
ventures. In other words, an entrepreneur finalizes an idea
only after considering a variety of options, analysing their
strengths and weaknesses by applying analytical
techniques, testing their applicability, supplementing them
with empirical findings, and then choosing the best
alternative. It is then that he/she applies the ideas in
practice. The selection of an idea, thus, involves the
application of research methodology.

• (v) Overcoming Resistance to Change – New innovations are
generally opposed by people because it makes them change
their existing behaviour patterns. An entrepreneur always
first tries new ideas at his/her level. It is only after the
successful implementation of these ideas that an
entrepreneur makes these ideas available to others for their
benefit. His/her will power, enthusiasm and energy help
him/her in overcoming the society’s resistance to change.
• (vi) Catalyst of Economic Development – An entrepreneur
plays an important role in accelerating the pace of economic
development of a country, by discovering new uses of
available resources and maximizing their utilization. Today,
when India is a fast developing economy, the contribution of
entrepreneurs has increased multi-fold.
Functions of an
Entrepreneur

Types of Entrepreneurs
• (i) Innovative Entrepreneurs – These entrepreneurs have the ability
to think newer, better and more economical ideas of business
organisation and management. They are the business leaders and
contributors to the economic development of a country. Inventions
like the introduction of a small car ‘Nano’ by Ratan Tata, organised
retailing by Kishore Biyani, making mobile phones available to the
common man by Anil Ambani are the works of innovative
entrepreneurs.
• (ii) Imitating Entrepreneurs – These entrepreneurs are people who
follow the path shown by innovative entrepreneurs. They imitate
innovative entrepreneurs because the environment in which they
operate is such that it does not permit them to have creative and
innovative ideas on their own. In our country also, a large number of
such entrepreneurs are found in every field of business activity.
Development of small shopping complexes is the work of imitating
entrepreneurs. All the small car manufacturers now are the
imitating entrepreneurs.

• (iii) Fabian Entrepreneurs – Fabian entrepreneurs are those individuals
who do not show initiative in visualising and implementing new ideas and
innovations. On the contrary, they like to wait for some development,
which would motivate them to initiate unless there is an imminent threat
to their very existence.
• (iv) Drone Entrepreneurs – Drone entrepreneurs are those individuals
who are satisfied with the existing mode and speed of business activity
and show no inclination in gaining market leadership. In other words,
drone entrepreneurs are ‘die-hard conservatives’ and even ready to
suffer the loss of business.
• (v) Social Entrepreneurs – Social entrepreneurs drive social innovation
and transformation in various fields including education, health, human
rights, workers’ rights, environment and enterprise development. Dr.
Mohammed Yunus of Bangladesh who started Gramin Bank is a case of
social entrepreneur.
Meaning of ‘Fabian’- He/she is ‘a person seeking victory by delay rather than b
y a decisive battle’ & ‘Drone’ is ‘a person who lives on the labour of others’

• (vi) Agricultural Entrepreneur – The entrepreneurs who
undertake agricultural pursuits are called Agricultural
Entrepreneurs. They cover a wide spectrum of agricultural
activities like cultivation, marketing of agricultural produce,
irrigation, mechanization and technology.
• (vii) Trading Entrepreneur – As the name itself suggests, the
trading entrepreneur undertakes the trading activities. He/she
procures the finished products from the manufacturers and
sells these to the customers directly or through a retailer.
These serve as the middlemen as wholesalers, dealers, and
retailers between the manufacturers and customers.
• (viii) Manufacturing Entrepreneur – The manufacturing
entrepreneurs manufacture products. They identify the needs
of the customers and, then, explore the resources and
technology to be used to manufacture the products to satisfy
the customers’ needs.

• (ix) Women Entrepreneurs – Women entrepreneurship is
defined as the enterprises owned and controlled by a
woman/women having a minimum financial stake of 51 per
cent of the capital and giving at least 51 per cent of
employment generated in the enterprises to women.
• (x) Inventors & Challenger Entrepreneurs – Inventor
entrepreneurs with their competence and inventiveness
invent new products. Their basic interest lies in research and
innovative activities & Challenger entrepreneurs plunge into
industry because of the challenges it presents. When one
challenge seems to be met, they begin to look for new
challenges.
• (xi) Life-Timer Entrepreneurs – These entrepreneurs take
business as an integral part to their life. Usually, the family
enterprise and businesses which mainly depend on exercise of
personal skill fall in this type/category of entrepreneurs.

1.Dr Pavan Goenka,
2. Sundar Picchai

What Is Intrapreneur?
• An Intrapreneur is an employee with entrepreneurial
skills and is responsible for developing innovative ideas,
products, or services for their company. Their goal is to
enhance the sustainability of the business and help it
stay ahead in the competition.

• Timeline Of Intrapreneurship
• 1978 – Gifford Pinchot III, the founder of sustainable
business school, coined the term “intrapreneur”.
• 1982 – Howard Edward Haller, the founder of the
Intrapreneurship Institute, published the first formal
academic case study of intrapreneurship.
• 1985 – Time magazine published the article Here
Come the Intrapreneurs. It was when the term
started gaining popularity.
• 1985 – Steve Jobs quoted the term during an
interview with Newsweek. It was then intrapreneurs
began getting recognition worldwide.
• 2011 – The first conference on intrapreneurship was
held in London, England.

• Examples
• One of the very first instances of intrapreneurship
can be traced back to 1974. Then 3M, an American
multinational corporation, introduced a policy in
which employees were allowed to devote 15% of
their working hours to their project ideas.
• As part of this policy, Spencer Silver, an engineer at
3M Co., created a lightweight repositionable
adhesive and promoted it within the company, but it
did not work. Another 3M engineer Art Fry observed
during his regular choir practice that his bookmark
was coming out of the hymnal every time he tried to
fix it. Both the engineers, under the same program,
collaborated and created the Post-It Note together.

• In another intrapreneur example, Ken Kutaragi, a junior
employee at Sony Corp., devoted hours to tweak a
Nintendo game console to make it more user-friendly. His
idea was rejected by many. But the group chief executive
officer Norio Ohga trusted his creativity and let him work
the way he wanted. The combined efforts led to the
emergence of Sony PlayStation in 1994, the most trusted
gaming brand across the globe today.
• Google Inc. favors both open and closed innovation models.
While the former is an approach that allows collaboration
with outside companies, the latter is an innovative process
with no external influence. As part of its closed innovation
program, the tech giant gives the in-house resources a
chance to use their ideas in developing new tech
products. Google Wave is a perfect example of a product
developed without any external involvement.

Difference between an Intrapreneur
and an Entrepreneur

Stages of
Entrepreneurship
Development Process
• Finding a business idea
• Building a team
• Creating a business
plan
• Raising capital
• Launching your
business
• Growing your business
• Exiting your business.

Creativity and
Innovation
• Creativity is typically
centered around
original thought and
knowledge, which
unleashes potential
and is an integral part
of idea generation.
• Innovation, on the
other hand, is used to
turn the creative idea
that you come up
with into a viable
solution.

CREATIVE PROBLEM-SOLVING
• One of the biggest hindrances to
innovation is complacency—it can be
more comfortable to do what you
know than venture into the unknown.
Business leaders can overcome this
barrier by mobilizing creative team
members and providing space to
innovate.
• There are several tools you can use to
encourage creativity in the workplace.
Creative problem-solving is one of
them, which facilitates the
development of innovative solutions to
difficult problems.

ENTREPRENEURSHIP DEVELOPMENT MODULE 1 PPT.pptx

More Related Content

What's hot

Similar to ENTREPRENEURSHIP DEVELOPMENT MODULE 1 PPT.pptx

More from prasannamurthy6

Recently uploaded

ENTREPRENEURSHIP DEVELOPMENT MODULE 1 PPT.pptx