Unit 12 Managing New Ventures and Entrepreneurship.pptx

New start up

1. Managing New Ventures and Entrepreneurship Unit 12

2. Concept of Entrepreneurship

3. Entrepreneurship Strategic thinking and risk-taking behavior that results in the creation of new opportunities for individuals and/or organizations. Entrepreneurship is the process of creating new ventures (business)with new ideas. Entrepreneurship means being able to start and manage your own business Entrepreneurs – Risk-taking individuals who take actions to pursue opportunities and situations others may fail to recognize or may view as problems or threats. Concept of Entrepreneurship

4. Entrepreneurship is the process of creating new venture. It involves creativity, innovation and launching of one’s own venture. It requires assumption of risks for reaping of rewards. It brings together resources. It provides self employment to an individual. It creates employment opportunity for others. Entrepreneurship is the process of identifying opportunities in the market place, arranging the resources required to pursue these opportunities, using these resources to exploit the opportunities for better gains assuming risk.

5. High level of confidence Innovator Risk bearer Proactive Desire for independence Good manger Understand failure is a part of game Passionate about his or her business Expert at networking

6. Identify and evaluate opportunity Concept development( develop a business plan) Set-up the venture(Start-up) Resourcing Implement business plan •

7. Support law and professional code (follow the rules and regulations of government and professional association) Follow the business ethics ( what is right and what is wrong for the human being and society) Create employment (not sending the job overseas) Lead by example (try to be market leader and guide others) Establish a code of conduct Stakeholder’s interest (but not at the expense of social, environmental and moral considerations)

8. Promote green business (pollution control) Ethical publicity (not engage in unhealthy marketing) Value the human resources (QWL) Focus on consumer satisfaction (think of suitable marketing mix-4Ps: Product, Price, Place and Promotion)

9. Starting and promoting a business venture requires various resources and facilities . For this, institutional support for the entrepreneurs is of great importance. Institutional supports refers to the assistance provided to the entrepreneurs by different types of institutions( Government and non-government institutions ). These institutions can promote entrepreneurship by formulate policies, regulating and facilitating various activities to develop manufacturing and service enterprises. The government, financial institutions, insurance companies, micro finance companies, development banks and other private and non-governmental organizations can help promote entrepreneurship in Nepal. Public and private partnership(PPP) model will be instrumental to develop entrepreneurship in this regard. The institutional support can be in the form of facilities, incentives and policies.

10. Easy access to capital For small enterprise, it is difficult get loan financial institutions due to collateral and high interest rate. In such situation, different intuitions provide loads in favorable terms and conditions. Development of competency Competency includes managerial and other skills needed to operate entrepreneurial venture. Various governmental and non-governmental organizational lunch such type of campaign. Access to infrastructure: Institutional support is needed to develop infrastructural facilities such as transportation, communication, energy etc. Supply of raw materials: New ventures, mainly those based on new technology, required raw materials from global market. Such type of import based industries need financial resources to get the raw materials in their factory premises.

11. Access to marketing Marketing requires resources and information which are provided by different institutions. Create awareness Awareness is very important to conduct entrepreneurial venture. The clear distinction between being an entrepreneur and job seekers should be clearly communicated to the general people. Government and non-governmental agencies may play significant role in this regard. Government policies Government is the final author of the country. All sorts of entrepreneurial ventures in a greater extent depends on the existing rules and regulations imposed by the government.

12. Role of Entrepreneurship in Society 1. Generation of Employment : An entrepreneur generates employment in the economy and helps in reducing unemployment as well as in improving the standard of living of the people. This is because more jobs mean more income for the people and more revenue in the economy.

13. Cont……….. 2. Contribution to GDP (gross-total, domestic- within a boundary of a country, Product- output) : Entrepreneurship c ontributes greatly to the GDP of the country as entrepreneurship primarily involves production and supply of goods and services with a profit motive in mind. This is especially important in a country like Nepal which has a huge unemployed population. This helps the overall growth of the country. Entrepreneurship is a cause and economic development is effect .

14. 3.Improvement in Economic Efficiency Entrepreneurs make effective utilization of resources which leads to increase in production and productivity. wh i ch and increase use new technology in production They also facilitates pr o d u ctivi t y .

15. 4. Increasing the Spectrum (range) and Scope of Economic Activities Development of entrepreneurship increases the production of verities of goods and services in a county. This increases the range and scope of economic activities.

16. 5.Impact on Local Communities Entrepreneurs start new ventures in various parts of the country. Incentives and facilities granted by the government serve as an attraction for starting business in backward regions . This promotes balance regional development. Local resources also get utilized.

17. 6. Industrialization Entrepreneurial activities are the prime source of industrialization in developing countries. Such act i vities pro v ide e mploym e nt opportunities. People learn new skills and earn more income. Unemployed people in agriculture sector move to industries. New products are invented and marketed. New technology develops.

18. 7. Equitable Distribution Entrepreneurship develops equitable distribution of wealth, income and political power. By starting risky new ventures and running them successfully , they help reduce concentration of wealth, income and political power in the hands of big houses and global enterprises . Self-employment increases. Local ownership and control is ensured.

19. 8. Capital formation Capital formation is addition made to the stock of physical and human capital . Capital is an important factor for economic development. Entrepreneurs stimulates investment interest in new ventures to mobilize idle saving of public. They fuel economic growth.

20. Structure of Entrepreneurial Organizations An organization is a collection of people working together in a coordinated and structured fashion to achieve one or more goals. All Organizations have a management structure that determines the relationships between functions and positions and subdivides and delegates roles, responsibilities and authority to carry out defined tasks. A n o r g a niza t ion a l s t ru c ture i s the typi ca lly hiera r c h ical a rran g ement o f l i n es of authorit y , commu n ic a t i ons, r i ghts and duties of an organization

21. Forms of Organization 1. Sole proprietorship/ individual enterprise (Business organization) : It is a type of enterprise/business owned and run by one person and in which there is no legal distinction between the owner and the business entity. Sole trader receives all profits and has unlimited responsibility for all losses and debts.

22. Co n t.. Advantages easy to establish and desolve Quick decision Economy Independent Qualitative product Relation with consumers Secrecy Low cost of production Easy to advance loan Disadvantages Unlimited liability Lack of capital Uncertain life Lack of competition L a ck o f d i v i sion of labor Low profit Small scale business Lack of credit facility

23. Co n t.. 2. Partnership organization: A partnership is a business structure made up of 2 or more people who distribute income and losses between themselves Advantages A dequate capital Easy to establish and dissolve Facility of advancing loan Quick and prompt decision Utilization of joint skills Sprit of cooperation Advantages of large scale production Better management Specializaion of work Disadvantages Unlimited liability Lack of team sprit Lack of secrecy Lack of quick decision Difficult to transfer ownership Selfish manner

24. C ON T .. 3. Joint stock company : it is a business organization that is owned jointly by all its shareholders. All the shareholders own a certain amount of stock in the company, which is represented by their shares. A joint stock company is a voluntary association of individuals for profit having a capital divided into transferable shares, the ownership of which is the condition of its memberships.

25. Co n t.. Features: Joint ownership: Transferable ownership Limited liability Permanent life Democratic form Legal personality Formal registration Official seal Indirect participation of owner Liquidation by law.

26. Features of Good Organizational Structure Simplicity: Every person in the organization should be clear about with whom he has to consult in a particular matter. Flexibility and Continuity : The organizer should build the structure not for today or tomorrow. Clear Line of Authority : There should be clear lines of authority running from top to bottom or in horizontal directions. Application of Ultimate Authority : Although a superior manager assigns some of the work to his subordinates, he is ultimately responsible for the accomplishment of the total work.

27. Co n t.. Proper Delegation of Authority : The concept of ultimate authority will be effective only when there is proper delegation of authority at various levels of the organization. Proper Emphasis on Staff : Line functions should be separated from staff functions and adequate emphasis should be placed on important staff activities. for example, production activities in a manufacturing concern. Provision for Top Management : In the company form of organization, the shareholders are generally indifferent to the day-to-day affairs of the company. Minimum Possible Managerial Levels: As far as possible, there should be minimum managerial levels, Greater the number of managerial levels,

28. Types of Organizational Structure 1. Line And Staff Organizational structure: Line organization is one in which all managers have direct authority over their respective subordinates, through the chain of command. Advantages Simple Speed Action Proper discipline Fixation of responsibility Flexibility Executive Development Unified Control Economical

29. Co n t.. Disadvantages Overloading Lack of specialization Difficulty in coordination Autocratic Leadership Inefficiency Lack of stability Unsuitable for large enterprise

30. Line and staff organizational structure of Vegetable Agribusiness

31. 2. Functional Organizational Structure In a functional organizational structure, the organization is set up split into departments specializing in a specific area of expertise. Each department has its own guidelines, standard operating procedures (SOPs), targets and requirements. They hire employees based on specific skills and qualifications relevant to roles and hierarchical layout within that department.

32. Co n t.. Every department is led by a leader (could be a manager, senior manager, director, etc. depending on the size of the company). So, depending on how it functions, there may be other sub-hierarchical structures developed within them.

33. Co n t..

34. Co n t.. Matrix Organizational Structure : A matrix organizational structure is a company structure in which the reporting relationships are set up as a grid, or matrix. Geographical organizational structure Customer based organizational structure Team based organizational structure