Entrepreneurship Development and Leadership (1).pptx

Module 2 EEB

1. Entrepreneurship Development and Leadership - Jessica Falcao

2. CO2 Understand the nature of business development in the context of existing organizations and of new business start-ups.

3. Entrepreneurship

4. Motivating factors External Factors Government assistance and support. Availability of labour and raw material. Encouragement from big business houses. Promising demand for the product.

5. Motivating factors Internal Factors Desire to do something new. Become independent. Achieve what one wants to have in life. Be recognized for one’s contribution. One’s educational background. One’s occupational background and experience in the relevant field.

6. Entrepreneurial Motivation Need for Achievement (N-Ach.) Need for Power (N-Pow) Need for Affiliation (N-Aff.) Need for Autonomy (N-Aut.)

7. Need for Achievement (N-Ach.) A desire to accomplish something difficult. To master, manipulate, or organise physical objects, human beings or ideas. To overcome obstacles and attain a high standard. To excel one’s self. To rival and surpass others. To create a work environment that suits your abilities and interests rather than work under bosses.

8. Need for Power (N-Pow) The concern for influencing people or the behaviour of others for moving in the chosen direction and attaining the envisioned objectives. In the process of founding a business, one has to win the commitment of capital providers, suppliers of equipment and materials, the employees and that of the customers. Power may not be used to further one’s self- interests alone, it may be also be used to touch the lives of others, to make a difference.

9. Need for Affiliation (N-Aff.) It implies, among other things a tendency of the people to conform to the wishes and norms of those whom they value. In certain cultures, family comprises the bedrock on which the successful careers are built. One works, as if, not for personal gratification but for family. Desire to carry on the tradition of business in the family and the community to which one belongs, may be interpreted as reflecting need for affiliation as well.

10. Need for Autonomy (N-Aut.) A desire for independence and being responsible and accountable to oneself rather than some external authority for performance.

11. Characteristics of entrepreneurial Leadership Systematic Activity: It is a systematic, step-by-step and purposeful activity. It has certain temperamental, skill and other knowledge and competency requirements that can be acquired, learnt and developed, both by formal educational and vocational training as well as by observation and work experience

12. Characteristics of entrepreneurial Leadership Systematic Activity: It is a systematic, step-by-step and purposeful activity. It has certain temperamental, skill and other knowledge and competency requirements that can be acquired, learnt and developed, both by formal educational and vocational training as well as by observation and work experience

13. Characteristics of entrepreneurial Leadership 2. Lawful and Purposeful Activity: The object of entrepreneurship is lawful business. For creation of value for personal profit and social gain. 3. Innovation: From the point of view of the firm, innovation may be cost saving or revenue-enhancing. Introduction of new products, discovery of new markets and sources of supply of inputs, technological breakthroughs as well as introduction of newer organisational forms for doing things better, cheaper, faster and, in the present context

14. Characteristics of entrepreneurial Leadership 4. Organisation of Production: knowledge about availability and location of the resources as well as the optimum way to combine them. It also involves product development and development of the market for the product. 5. Risk Taking: As the entrepreneur contracts for an assured supply of the various inputs for his project, he incurs the risk of paying them off whether or not the venture succeeds.

15. Entrepreneurial behaviors (i) rather than becoming a part of the problem, proactively tries to solve it; (ii) uses personal creativity and intellect to develop innovative solutions; (iii) thinks beyond resources presently controlled in exploiting the emerging opportunities or attending to the impending problems; (iv) has the conviction to convince others of one’s ideas and seek their commitment towards the project; and (v) has the courage of heart to withstand adversities, persist despite setbacks and be generally optimistic.

16. Classification of Entrepreneurs The entrepreneurs in business are broadly classified according to the types of business, use of professional skill, motivation, growth and stages of development.

17. Entrepreneurial challenges Uncertainty and Risk Market Competition Raising Capital and Financial Constraints   Time Management Marketing and Sales Networking and Building Relationships Adapting to Change   Building a Team Work-Life Balance Self-Doubt and Imposter Syndrome   Regulatory and Legal Compliance Scaling and Growth

18. Types of Enterprises and Ownership Structure Small Scale Enterprises: A business which functions on a small scale and involves less capital investment upto 10 crore and small number of labour and few machines to operate. Medium Scale Enterprises: A business which functions on a small scale and involves capital investment upto 50 crore and turnover of less than 250 Cr. Large Scale Enterprises: A business which functions on a large scale, that have massive infrastructure capabilities, employ a significant number of workers and produce a large amount of output .

19. Categorization Small organizations: Fewer than 500 employees. Medium organizations: 500 to 999 employees. Large organizations: 1,000 or more employees. Turnover and labour is subject to area and region.

20. ROLE OF SMALL SCALE ENTERPRISES IN ECONOMIC DEVELOPMENT Employment generation Self-employment Optimum use of capital Facilitate entrepreneurial development Use of local resources Balanced regional development Conservation of foreign exchange Equal distribution of income Supporting agriculture and large industries Increase in industrial output.

21. Employment Generation: The rise in small scale enterprises helps to tackle the unemployment problem in the country. These business units help to spread jobs in the rural and backward areas, thus helping the rural community stay afloat. Employment is an important indicator of the level economic development of a country, hence small scale industries improve the quality and quantity of labour in the country. Self-employment: Self-employment is the process through which an individual decides to initiate, organize and manage an enterprise, instead of working as an employee in an organization. This implies that there is one less job-seeker in the country. Thus small enterprises have the advantage of easy set-up which, promotes self-employment in the nation. This further results in the creation of more jobs and creates an environment of healthy competition in the economy.

22. Optimum use of capital: Small enterprises, require less investment in capital, they have a lower gestation period and hence capital resources are not idled unproductively for long periods of time. Thus, small scale enterprises lead to an optimum use of capital. Facilitate entrepreneurial development: The growth of small scale enterprises facilitates entrepreneurial development in many ways. It removes the apprehensions of the people regarding an entrepreneurial career and it also boosts the level of production from the rural and urban areas. Use of local resources: Small enterprises generally procure the raw materials required for their operation from the local producers. Therefore, the local resources are used to their fullest capacity. This helps the local producers stay afloat and preserves the natural goods and occupations of the rural community.

23. Balanced regional development: One of the major hindrances to economic growth in India is unbalanced regional development. Certain regions of the country seem to be bustling with trade and commerce whereas other areas are ever-sinking into poverty. The dispersion of small scale enterprises into such areas, facilitates balanced regional development. It creates employment and improves the standard of living of the people residing in those areas. Conservation of foreign exchange: Small scale enterprises help in the conservation of foreign exchange, by reducing the amount of imports of the country. With more business units engaged in domestic production, it leads to the nation becoming more self-reliant. Thus, reducing the need to import goods from abroad. These units also earn a substantial amount of foreign exchange for the country.

24. Equal distribution of income: The growth of small scale enterprises leads to a more equitable distribution of income, due its decentralized and dispersed nature. The small scale enterprises are set up with the objective of improving the livelihoods of the people living in that area, and to provide a stable and decent source of income for them and their families." Supporting agriculture and big industries: Agriculture is of primary importance in a country such as India. It provides jobs to numerous people in India, upgrading the agricultural sector with the latest agriculturál techniques and practises is crucial. Small scale industries help to achieve this by supplying valuable tools and implements to the sector. It also supports large scale industries in its operations. Increase in industrial output: Small scale enterprises lead to an increase in industrial output. They encourage more production in the economy. As the level of production increases, so will the level of employment and income. Thus it improves the standard of living of the people.

25. SMALL AND MEDIUM ENTERPRISES (SMEs) IN INDIA It is evident from the SME full form that they have limited employees and spend minimally on fixed assets such as manufacturing plants/production plants and equipment. Any industrial unit with a total investment in its fixed assets or leased assets or hire-purchase asset upto Rs10 million is considered as a SSI unit and investment upto Rs. 100 million is considered as a medium unit . In addition, an SSI unit should neither be a subsidiary of any other industrial unit nor can it be owned or controlled by any other industrial unit. The SME sector produces a wide range of industrial products such as food products, beverage, tobacco and tobacco products, cotton textiles, wool, silk, synthetic products, jute, hemp & jute products, wood & wood products, furniture and fixtures, paper & paper products, printing publishing and allied industries, machinery, machines, apparatus, appliances and electrical machinery. SME sector also has a large number of service industries .

26. SMALL AND MEDIUM ENTERPRISES (SMEs) IN INDIA The small scale sector in India comprises of a diverse range of units from traditional crafts to high-tech industries. The number of SSI working units (registered & unregistered) in India totaled 11.4 million in 2003-04-80.5 percent of which are proprietary concerns and 16.8 per cent are partnership firms and private limited companies.

27. Importance of SSIs in India Contributes to 7% of Indian GDP Providing employment to over 28 million people. Production value is almost Rs 816,000 crore. It contributes to around 40% of industrial production & exports. It accounts to almost 70% of employments Globally, 99.7 per cent of all enterprises in the world are SME's and the balance 0.3 per cent are large-scale enterprises.

28. MSME A proprietorship, partnership firm, company, trust or society with an investment below Rs.50 crore and annual turnover below Rs.250 crore are eligible for MSME registration.

29. Types of Ownership Structures The three basic legal forms are (1) proprietorship, (2) partnership, and (3) corporation, with variations particularly in partnerships and corporations. Proprietorship: Form of business with single owner who has unlimited liability, controls all decisions, and receives all profits. Partnership: Two or more individuals having unlimited liability who have pooled resources to own a business. Corporation: Separate legal entity that is run by stockholders having limited liability