Entrepreneurship development

types of Entrepreneur

1. ENTREPRENEURSHIP DEVELOPMENT An Introduction 11/28/2014 PRAJEESH E MENON MBA, KVM COLLEGE, Cherthala , Kerala

2. According to George Bernard Shaw , people fall into three categories: 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. 11/28/2014 PRAJEESH E MENON KVM COLLEGE, Cherthala, Kerala

3. ABOUT 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. An entrepreneur is an aggressive catalyst for change in the world of business. He or she is an independent thinker who dares to be different in a background of common events thereby catering to the social and economic upliftment . The prime focus of any entrepreneur is to capitalize the opportunities and to build a strong ethical base. 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. 11/28/2014 PRAJEESH E MENON KVM COLLEGE, Cherthala , Kerala

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5. 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 . 11/28/2014 PRAJEESH E MENON KVM COLLEGE, Cherthala, Kerala

6. ENTREPRENEURSHIP Entrepreneurship is the process of creating value by bringing together a unique package of resources to exploit an opportunity. 11/28/2014 PRAJEESH E MENON KVM COLLEGE, Cherthala, Kerala

7. EVOLUTION OF THE CONCEPT… EARLY PERIOD: The earliest definition of the entrepreneur as a go-between is Marco Polo. He tried to establish trade route to the far East. He used to sign a contract with a venture capitalist to sell his goods. The capitalist was the risk bearer. The merchant adventurer took the role of trading. After his successful selling of goods and completing his trips, the profits were shared by the capitalist and the merchant. 11/28/2014 PRAJEESH E MENON KVM COLLEGE, Cherthala, Kerala

8. EVOLUTION OF THE CONCEPT… MIDDLE AGES: The term entrepreneur was referred to a person who was managing large projects. He was not taking any risk but was managing the projects using the resources provided. An example is the cleric who is in charge of great architectural works such as castles, public buildings, cathedrals etc. 11/28/2014 PRAJEESH E MENON KVM COLLEGE, Cherthala, Kerala

9. EVOLUTION OF THE CONCEPT… 16 th CENTURY: The term entrepreneur was referred to a person who was involved in military expeditions. 17 th CENTURY: An entrepreneur was a person who entered into a contractual arrangement with the Govt. to perform a service or to supply some goods. Civil engineering activities such as construction and fortification. The profit was taken (or loss was borne) by the entrepreneur. 11/28/2014 PRAJEESH E MENON KVM COLLEGE, Cherthala, Kerala

10. EVOLUTION OF THE CONCEPT… 18 th CENTURY: 3 MAIN CONCEPTS EVOLVED It was Richard Cantillon , French Economist, who applied the term entrepreneur to business for the first time (1734). He is regarded by some as the founder of the term. He defined an entrepreneur as a person or an agent who buys factor services at certain prices with a view to sell them at uncertain prices in the future. Concept 1: ENTREPRENEUR = RISK BEARER 11/28/2014 PRAJEESH E MENON KVM COLLEGE, Cherthala, Kerala

11. EVOLUTION OF THE CONCEPT… Jean- Baptiste Say , (aristocratic industrialist) in 1803 — An entrepreneur is an economic agent who unites all means of production- land, labour and capital to produce a product or service. Product sales pay rent, wages, interest and what remains is profit. He shifts economic resources from an area of lower to an area of higher productivity. Concept 2: ENTREPRENEUR = ORGANISER 11/28/2014 PRAJEESH E MENON KVM COLLEGE, Cherthala, Kerala

12. EVOLUTION OF THE CONCEPT… Joseph A. Schumpeter (1934) The entrepreneur in an advanced economy is an individual who introduce 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. Concept 3: ENTREPRENEUR = INNOVATOR 11/28/2014 PRAJEESH E MENON KVM COLLEGE, Cherthala, Kerala

13. 1910: Adam Smith – An entrepreneur is a person who only provides capital without taking active part in the leading role in the enterprise. 1961 : David McClelland —A person with a high need for achievement [N-Ach] who is energetic and a moderate risk taker . 1964: Peter Drucker —One who searches for change, responds to it and exploits opportunities. Innovation is a specific tool of an entrepreneur hence an effective entrepreneur converts a source into a resource . 2013 : Ronald May —Someone who commercializes his or her innovation . 11/28/2014 PRAJEESH E MENON KVM COLLEGE, Cherthala, Kerala

14. CHARACTERISTICS OF AN ENTREPRENEUR 11/28/2014 PRAJEESH E MENON KVM COLLEGE, Cherthala, Kerala

15. HARD WORK BUSINESS ACUMEN AND SINCERITY PRUDENCE ACHIEVEMENT MOTIVATION SELF-RELIANCE AND INDEPENDENCE HIGHLY OPTIMISTIC KEEN FORSIGHT PLANNING AND ORGANISING ABILITY INNOVATIVENESS RISK TAKING SECRECY MAINTENANCE MAINTAIN PUBLIC RELATIONS COMMUNICATION SKILL 11/28/2014 PRAJEESH E MENON KVM COLLEGE, Cherthala, Kerala

16. QUALITIES OF AN ENTREPRENEUR 11/28/2014 PRAJEESH E MENON KVM COLLEGE, Cherthala, Kerala

17. ENTERPRISING RISK BEARER CREATIVE THINKER AMBITIOUS HIGH NEED ACHIEVEMENT CHANGE AGENT GOOD ORGANISER AND MANAGER DECISION MAKER STRONG COMMITMENT FIRM DETERMINATION 11/28/2014 PRAJEESH E MENON KVM COLLEGE, Cherthala, Kerala

18. FUNCTIONS OF AN ENTREPRENEUR 11/28/2014 PRAJEESH E MENON KVM COLLEGE, Cherthala, Kerala

19. Risk Assumption Function Business Decision Making Function Managerial Function Function of Innovation 11/28/2014 PRAJEESH E MENON KVM COLLEGE, Cherthala, Kerala

20. RISKS FACED BY ENTREPRENEURS 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. 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. 11/28/2014 PRAJEESH E MENON KVM COLLEGE, Cherthala, Kerala

21. 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. 11/28/2014 PRAJEESH E MENON KVM COLLEGE, Cherthala, Kerala

22. 11/28/2014 TYPES OF ENTREPRENEURS PRAJEESH E MENON KVM COLLEGE, Cherthala, Kerala

23. CLASSIFICATION BY CLARENCE DANHOF: Clarence Danhof , On the basis of American agriculture, classified entrepreneurs in the following categories: INNOVATIVE ENTREPRENEURS ADOPTIVE OR IMITATIVE ENTREPRENEURS FABIAN ENTREPRENEURS DRONE ENTREPRENEURS 11/28/2014 PRAJEESH E MENON KVM COLLEGE, Cherthala, Kerala

24. INNOVATIVE ENTREPRENEURS They are generally aggressive on experimentation and cleverly put attractive possibilities into practice. An innovative entrepreneur, introduces new goods, inaugurates new methods of production, discovers new markets and reorganizes the enterprise. Innovative entrepreneurs bring about a transformation in lifestyle and are always interested in introducing innovations. 11/28/2014 PRAJEESH E MENON KVM COLLEGE, Cherthala, Kerala

25. ADOPTIVE OR IMITATIVE ENTREPRENEURS Imitative entrepreneurs do not innovate the changes themselves, they only imitate techniques and technology innovated by others. They copy and learn from the innovating entrepreneurs. While innovating entrepreneurs are creative, imitative entrepreneurs are adoptive. 11/28/2014 PRAJEESH E MENON KVM COLLEGE, Cherthala, Kerala

26. FABIAN ENTREPRENEURS These entrepreneurs are traditionally bounded. They would be cautious. They neither introduce new changes nor adopt new methods innovated by others entrepreneurs. 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. 11/28/2014 PRAJEESH E MENON KVM COLLEGE, Cherthala, Kerala

27. DRONE ENTREPRENEURS Drone entrepreneurs are those who refuse to adopt and use opportunities to make changes in production. They would not change the method of production already introduced. They follow the traditional method of production. They may even suffer losses but they are not ready to make changes in their existing production methods. 11/28/2014 PRAJEESH E MENON KVM COLLEGE, Cherthala, Kerala

28. COLE’S CLASSIFICATION EMPIRICAL ENTREPRENEUR Who never introduces anything new in his method of production or business. Simply follows the rule of thumb Like drone entrepreneurs RATIONAL ENTREPRENEUR Who is ready to introduce even revolutionary changes on the basis of general economic conditions prevailing in that area. Takes rational decisions himself depending up on the situation. COGNITIVE ENTREPRENEUR Who takes advices and services of experts and introduces changes. 11/28/2014 PRAJEESH E MENON KVM COLLEGE, Cherthala, Kerala

29. 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. 11/28/2014 PRAJEESH E MENON KVM COLLEGE, Cherthala, Kerala

30. 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 . 11/28/2014 PRAJEESH E MENON KVM COLLEGE, Cherthala, Kerala

31. 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. 11/28/2014 PRAJEESH E MENON KVM COLLEGE, Cherthala, Kerala

32. 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. 11/28/2014 PRAJEESH E MENON KVM COLLEGE, Cherthala, Kerala

33. 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. 11/28/2014 PRAJEESH E MENON KVM COLLEGE, Cherthala, Kerala

34. 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. 11/28/2014 PRAJEESH E MENON KVM COLLEGE, Cherthala, Kerala

35. 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. 11/28/2014 PRAJEESH E MENON KVM COLLEGE, Cherthala, Kerala

36. 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. 11/28/2014 PRAJEESH E MENON KVM COLLEGE, Cherthala, Kerala

37. 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. It may be a strategy of spreading risk or it may be that the entrepreneur is simultaneously excited by a variety of opportunities. 11/28/2014 PRAJEESH E MENON KVM COLLEGE, Cherthala, Kerala

38. ENTREPRENEUR VS MANAGER ENTREPRENEUR Owner of the business Profit Full risk bearing All functions Innovator MANAGER Servant of the business Salary No risk bearing Managerial functions only Executor 11/28/2014 PRAJEESH E MENON KVM COLLEGE, Cherthala, Kerala

39. INTRAPRENEURS The new brand of corporate entrepreneurs from within an organisation are called as intrapreneurs . The term intrapreneur was coined in USA in the late seventies. Many senior executives of big companies in America left their jobs and started small business of their own. They left the organisation because they did not get any opportunity to apply their own ideas and innovative ability. These entrepreneurs become successful in their own ventures. Some of them caused a threat to the corporations they left. 11/28/2014 PRAJEESH E MENON KVM COLLEGE, Cherthala, Kerala

40. INTRAPRENEURS This type if entrepreneurs have come to be called Intrapreneurs . They believe strongly in their own talents. They have desire to create something of their own. They want responsibility and have a strong drive for individual expression and more freedom in their present organisational structure. When this freedom is not forthcoming, they become less productive or even leave the organisation to achieve self actualisation elsewhere. 11/28/2014 PRAJEESH E MENON KVM COLLEGE, Cherthala, Kerala

41. ENTREPRENEUR VS INTRAPRENEUR ENTREPRENEUR Independent Need not be highly educated Fund raising Risk bearing Routine work Operation from outside Strong authoritarian INTRAPRENEUR Dependent Highly educated No fund raising No risk bearing Specialist Operation from inside Less authoritarian 11/28/2014 PRAJEESH E MENON KVM COLLEGE, Cherthala, Kerala

42. COPRENEUR Copreneurs are entrepreneurial couples who work together as co-owners of their business. They are creating a division of labour that is based on expertise as opposed to gender studies show that companies co-owned by spouses represent one of the fastest growing business sectors. 11/28/2014 PRAJEESH E MENON KVM COLLEGE, Cherthala, Kerala

43. ULTRAPRENEUR The concept of ultrapreneuring is to identify a business opportunity, determine its viability and form a company. It requires assembling a super competent management team, who then develop, produce and markets the product or service in the shortest optimum time period. They create business and then sell out, merge or combine. In short, going beyond the simple undertaking and keeping a focus on the benefits of that undertaking provides a sensible definition of the word Ultrapreneur . 11/28/2014 PRAJEESH E MENON KVM COLLEGE, Cherthala, Kerala

44. The Concept of Entrepreneurship… 11/28/2014 PRAJEESH E MENON KVM COLLEGE, Cherthala, Kerala

45. DEFINITION 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”. 11/28/2014 PRAJEESH E MENON KVM COLLEGE, Cherthala, Kerala

46. THE ENTREPRENEURIAL PROCESS 11/28/2014 PRAJEESH E MENON KVM COLLEGE, Cherthala, Kerala

47. ENTREPRENEURIAL COMPETENCIES/ TRAITS 11/28/2014 PRAJEESH E MENON KVM COLLEGE, Cherthala, Kerala

48. KNOWLEDGE: Collection and retention of information in ones mind SKILL: The ability to demonstrate a system and sequence of behaviour which results in something that one can see MOTIVE: Urge to achieve one’s goal 11/28/2014 PRAJEESH E MENON KVM COLLEGE, Cherthala, Kerala

49. TYPES OF COMPETENCIES HARD-SKILL COMPETENCIES: Skills that are acquired through education or work experience. SOFT-SKILL COMPETENCIES: Skills that are generally inherent in an individual or developed by him consciously. E.g., Communication Skill 11/28/2014 PRAJEESH E MENON KVM COLLEGE, Cherthala, Kerala

50. MAJOR ENTREPRENEURIAL COMPETENCIES 11/28/2014 PRAJEESH E MENON KVM COLLEGE, Cherthala, Kerala

51. Entrepreneurship Development Institute of India, Ahemedabad conducted a study under Prof. David C. McClelland. The core competencies according to the study are: Initiative Looking for opportunities Persistence Information seeker Quality conscious 11/28/2014 PRAJEESH E MENON KVM COLLEGE, Cherthala, Kerala

52. Committed to work Efficiency seeker Proper planning Problem solver Self-confidence Assertive Persuasive Efficient monitor Employees’ well wisher Effective strategist 11/28/2014 PRAJEESH E MENON KVM COLLEGE, Cherthala, Kerala

53. ACCORDING TO B. C. TANDON Entrepreneur is enough risk-bearer. He is ready to adapt change, if the situation warrant. He has the ability to Marshall the resources at his command. He is a good organiser as well as a good manager. 11/28/2014 PRAJEESH E MENON KVM COLLEGE, Cherthala, Kerala

54. DEVELOPING COMPETENCIES Kakinada Experience. The procedure involves four steps: Competency Recognition Self-Assessment Competency Application Feed back 11/28/2014 PRAJEESH E MENON KVM COLLEGE, Cherthala, Kerala

55. ENTREPRENEUR VS ENTREPRENEURSHIP ENTREPRENEUR Person Organiser Innovator Motivator Leader Creator ENTREPRENEURSHIP Function/ Process Organisation Innovation Motivation Leadership Creation 11/28/2014 PRAJEESH E MENON KVM COLLEGE, Cherthala, Kerala

56. ENTREPRENEUR VS ENTREPRENEURSHIP ENTREPRENEUR Risk-bearer Initiator Visualiser Technician Imitator Administrator ENTREPRENEURSHIP Risk-bearing Initiative Vision Technology Imitation Administration 11/28/2014 PRAJEESH E MENON KVM COLLEGE, Cherthala, Kerala

57. ENTREPRENEURIAL MOTIVATION 11/28/2014 PRAJEESH E MENON KVM COLLEGE, Cherthala, Kerala

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59. Motivation means…. Willingness to exert high levels of effort toward organizational goals Conditioned by the effort’s ability to satisfy some individual need Motivation can be described in terms of intensity, persistence, and direction 11/28/2014 PRAJEESH E MENON KVM COLLEGE, Cherthala, Kerala

60. Definition… According to Dalton E. McFarland , “Motivation refers to the way in which urges, drives, desires, strives, aspirations and needs direct, control or explain the behaviour of human being” 11/28/2014 PRAJEESH E MENON KVM COLLEGE, Cherthala, Kerala

61. Nature of Motivation… Motivation: The set of forces that leads people to behave in particular ways The Importance of Motivation Performance depends upon motivation, ability, and environment P = M + A + E 11/28/2014 PRAJEESH E MENON KVM COLLEGE, Cherthala, Kerala

62. Concepts… Needs and Motives Goals Behaviour Incentives Instincts 11/28/2014 PRAJEESH E MENON KVM COLLEGE, Cherthala, Kerala

63. Process of Motivation 11/28/2014 PRAJEESH E MENON KVM COLLEGE, Cherthala, Kerala

64. MOTIVATION THEORIES 11/28/2014 PRAJEESH E MENON KVM COLLEGE, Cherthala, Kerala

65. Abraham Maslow’s Need Hierarchy Theory 11/28/2014 PRAJEESH E MENON KVM COLLEGE, Cherthala, Kerala

66. David McClelland’s Acquired Needs Theory 11/28/2014 PRAJEESH E MENON KVM COLLEGE, Cherthala, Kerala

67. Motivating Factors… Intrinsic Factors: Desire to do something new Educational background Occupational background or experience Extrinsic Factors: Government assistance and support Availability of labor and raw materials Encouragement from big business houses Promising demand for the product 11/28/2014 PRAJEESH E MENON KVM COLLEGE, Cherthala, Kerala