unit-i-entrepreneurshipdevelopmentbbasemiv-230315145423-fe50b247.pdf

Entrepreneurship development

1. SYBBA 2020-21 TERM-II
Course-401-Entrepreneurship and Small
Business Management
NBN College of Commerce & Science, Lonavala

2. UNIT I
ENTREPRENEURIAL PERSPECTIVE
•Concept of Entrepreneur, Manager, Intrapreneur
•Entrepreneur and Entrepreneurship
•Meaning, Definition, Evolution.
•Types of Entrepreneurs, Qualities and Functions of
Entrepreneur.
•Factors influencing Entrepreneurship: Psychological, Social,
Economical and Environmental factors.
•Role of Entrepreneur in growth and development of the small
business.
•Problem of Unemployment and Importance of wealth
creation.

3. from French word “entreprendre”
meaningto undertake
“ A person who organizes and manages any
enterprise, especially a business, usually
with considerable initiative and risk. ”
Entrepreneur

4. A) Concept:
The concept of entrepreneur has a wide range of meanings. On the one
extreme an entrepreneur is a person of very high aptitude who pioneers
change, possessing characteristics found in only a very small fraction of the
population.
B) Definitions:
1) Peter Drucker:“An entrepreneur 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.”
2) Albert Shapero: “Entrepreneurs take initiative, accept risk of failure and
have an internal locus of control.”
3) Gilbraith: “An entrepreneur must accept the challenge and should be
willing hard to achieve something”.
Concept of Entrepreneur

5. Meaning:Entrepreneurisonewhoorganizesandmanagesa
businessassumingtheriskforthesakeofprofit.An
entrepreneuristhepersonwhostartsanenterprise.
According to David McClelland an entrepreneur has the
following characteristics:
Innovative
Extremely Energetic
Strong desire for accomplishments
Self confidence
Risk Taker
Collection and Analysis of Facts
Orientation towards Future
Flexibility
Decision making ability
Responsibility

6. An entrepreneur assumes following functions:
Risk bearing Functions
OrganisationalFunctions
Innovative Functions
Managerial Functions
Decision Making Functions
Functions of Entrepreneur

7. An entrepreneur assumes following functions:
Risk bearing Functions
OrganisationalFunctions
Innovative Functions
Managerial Functions
Decision Making Functions
Functions of Entrepreneur

8. 1)ACCORDINGTOTHETYPEOFBUSINESS
i)Businessentrepreneurs:-whostartbusinessunitsafter
developingideasfornewproducts/services.
ii)Tradingentrepreneurs:-whoundertakebuying&sellingof
goods,butnotengageinmanufacturing.
iii)Corporateentrepreneurs:-whoestablishandmanage
corporateformoforganizationwhichhaveseparatelegal
existence.
iv)Agriculturalentrepreneurs:-whoundertakeactivitieslike
raisingandmarketingofcrops,fertilizersandotherallied
activities.
Types of Entrepreneurs

9. 2)ONTHEBASISOFSTAGESOFDEVELOPMENT
i)Firstgenerationentrepreneurs:-whodonotpossessany
entrepreneurialbackground.Theystartindustrybytheirown
innovativeskills.
ii)Secondgenerationentrepreneurs:-whoinheritthefamily
businessandpasstonextgeneration.
iii)Classicalentrepreneurs:-whoaimstomaximizehiseconomic
returnsatalevelconsistentwiththesurvivaloftheunitwith
orwithoutanelementofgrowth.
Types of Entrepreneurs

10. 3)ONTHEBASISOFMOTIVATION
i)Pureentrepreneurs:-whoarebasicallymotivatedtobecome
entrepreneursfortheirpersonalsatisfaction,egoetc..
ii)Inducedentrepreneurs:-whoareinducedtotakeup
entrepreneurialrolebytheassistanceandpolicyof
governmentincludingincentives,subsidiesetc.
Types of Entrepreneurs

11. 4)ONTHEBASISOFTECHNOLOGY
i)Technicalentrepreneurs:-whoaretaskorientedand
‘craftsmantype’.Theypreferdoingtothinking.
ii)Non-technicalentrepreneurs:-whoarenotconcernedwith
technicalside,butratherwithmarketingandpromotion.
iii)Professionalentrepreneurs:-whostartabusinessunit,but
laterselltherunningbusinessandstartanewunitlater.
Types of Entrepreneurs

12. 5)ONTHEBASISOFCAPITALOWNERSHIP
i)Privateentrepreneurs:-individualorgroupsetupenterprise,
arrangefinance,sharerisketc..
ii)Stateentrepreneurs:-meansthetradingorindustrialventure
undertakenbythestateorthegovernmentitself.
iii)Jointentrepreneurs:-thecombinationofprivateand
governmententrepreneurs.
Types of Entrepreneurs

13. OTHER CLASSIFICATIONS
6)ACCORDING TO GENDER AND AGE
i)Man entrepreneurs
ii)Women entrepreneurs
iii)Young entrepreneurs
iv)Old entrepreneurs
v)Middle-aged entrepreneurs
7)ACCORDING TO AREA
i)Urban entrepreneurs
ii)Rural entrepreneurs
Types of Entrepreneurs

14. 8)ACCORDING TO SCALE
i)Large scale entrepreneurs
ii)Medium scale entrepreneurs
iii)Small scale entrepreneurs
iv)Tiny scale entrepreneurs
Types of Entrepreneurs

15. Theentrepreneurinventswhilethemanager
administers.Manageristhepersonresponsibleforplanning
anddirectingtheworkofagroupofindividuals,monitoring
theirwork,andtakingcorrectiveactionwhennecessary.
Amanagerisapersonresponsibleforsupervisingand
motivatingemployeesandfordirectingtheprogressofan
organization.
Concept of Manager

16. Roles and Responsibilities of Manager
An entrepreneur assumes following functions:
Information Processing
Managers role as Monitor
Managers role as a disseminator of Information
Managers role as a spokesman
Decision Making
Managers role as an Entrepreneur
Managers role as a conflict handler
Managers role as Resource Allocator
Managers role as a Negotiator
Interpersonal Relationships
Managers role as a Figurehead
Managers Leadership role
Managers role as a Liaison Officer

17. Differences between an Entrepreneur and a Manager
Often the two terms namely entrepreneur and manager are considered as synonym. However
the two give different meaning. The major points of distinction between the two are
presented in table.
Points of
Difference
Entrepreneur Manager
Motive Themainmotiveofan
entrepreneuristostarta
ventureforhispersonal
gratification
Themainmotiveofamanager
istorenderservicesinan
enterprisealreadysentby
someoneelse.
Status TheEntrepreneuristhe
ownerofthebusinessand
servesonlyhiscustomers.
Themanageristhemiddle
executiveofthecompanyand
hastoserveboth;management
andcustomers.
Risk Entrepreneurassumesrisk
anduncertainty.
Amanagerdoesnotbearany
riskinvolvedinanenterprise.

18. Points of
Difference
Entrepreneur Manager
RewardsAnentrepreneurmayalwayslookfor
areward,itmaybehighlyuncertain.
Amonthlyincomethatis
fixedandcertain.
InnovationEntrepreneurhimselfthinksover
whatandhowtoproducegoodsto
needsofthecustomers.Hence,he
actsasinnovator/changeagent.
Amanagersimplyexecutes
planspreparedbythe
management.
QualificationAnentrepreneurneedstoposses
qualitiesandqualificationslikehigh
achievementmotive,originalityin
thinking,foresight,riskbearing
abilityetc.
Amanagerneedsto
possess distinct
qualificationsintermsof
soundknowledgein
managementtheoryand
practice.

19. Concept of Intrapreneur
Intrapreneursareemployeesofacompanywhoare
assignedtoworkonaspecialideaorproject.Theyare
giventhetimeandfreedomtodeveloptheprojectas
anentrepreneurwould.However,theyarenot
workingsolo.Intrapreneurshavetheresourcesand
capabilitiesofthefirmattheirdisposal.
“…apersonwithinalargecorporationwhotakes
directresponsibilityforturninganideaintoa
profitablefinishedproductthroughassertiverisk-
takingandinnovation.”

20. Characteristics of an
Intrapreneur
Adaptive
Intrapreneurs recognize and learn from mistakes, then adapt to
find new solutions
Creative
They posses ingenuity, bringing creativity to the workplace and
applying it to everyday situations
Goes Against the Grain
Innovation is the name of the game, intrapreneurs often have a
rebellious spirit.

21. Characteristics of anIntrapreneur(Contd.)
Internally&ExternallyFocused
Theyunderstandtheneedsofcompanyandcustomers.
Perspectiveisessentialandtheyseetheworldthroughmany
differentlenses
Self-Reliant
Like any leader, they must trust their judgment and ability.
Confidence and independence enables them to convey ideas,
even controversial ones
Visionary
A good idea is one thing, but quantifying costs and benefits,
understanding short vs. long-term implications, and
successfully pitching the idea spells success for an intrapreneur.

22. Differences between an Entrepreneur and an
Intrapreneur

23. Entrepreneurship
Entrepreneurshipcanbedescribedasaprocessofactionanentrepreneurundertakes
toestablishhisenterprise.Entrepreneurshipisacreativeactivity.Itistheabilityto
createandbuildsomethingfrompracticallynothing.
A)Concept:
Entrepreneurshipisaprocess.Itisthepurposefulandorganizedsearchforchange,
conductedaftersystematicanalysisofopportunitiesintheenvironment.
B)Definition:
1)PeterDrucker:
“Entrepreneurshipisdefinedas‘asystematicinnovation,whichconsistsinthe
purposefulandorganizedsearchforchanges,anditisthesystematicanalysisof
theopportunitiessuchchangesmightofferforeconomicandsocialinnovation.”
2)Heggins:
“Entrepreneurshipismeantthefunctionofseekinginvestmentandproduction
opportunity,organizinganenterprisetoundertakeanewproductionprocess,
raisingcapital,hiringlabour,arrangingthesupplyofrawmaterialsandselecting
topmanager’sofday-to-dayoperations.”

24. CharacteristicsofEntrepreneurship:
Characteristics of
Entrepreneurship
Economic
Activity
Entrepreneurship
Involves
Innovation
Goal-oriented
Activity
Value
Creation
Enterprise
Creation
A Function of
Risk Bearing
Entrepreneurshi
p Implies
Growth:
Managerial Skill
and Leadership
Function
Uniqueness
Organizing
Function

25. Characteristics of Entrepreneurship
1)EconomicActivity:
Entrepreneurshipisprimarilyaneconomicactivitybecauseitinvolvesthecreation
andoperationofanenterprise.Itisbasicallyconcernedwiththeproductionand
distributionofgoodsandservicesandoptimallyutilizestheresourcetowards
productiveuse.
2)EntrepreneurshipInvolvesInnovation:
Entrepreneurshipinvolveschanging,revolutionizing,transforming,andintroducing
newapproaches.
3)Goal-orientedActivity:
Theentrepreneurwhocreatesandoperatesenterprisesseekstoearnprofits
throughsatisfactionofneedsofconsumers;hence,entrepreneurshipisagoal-
orientedactivity.
4)ValueCreation:
Next,itisfoundthattheprocessofcreatingvalueisacharacteristicindescribing
entrepreneurship.Throughentrepreneurship,newproducts,services,transactions,
approaches,resources,technologies,andmarketsarecreatedthatcontributesome
valuetoacommunityormarketplace.

26. Characteristics of Entrepreneurship
5)EnterpriseCreation:
Thenextcharacteristicofentrepreneurshipisenterprisecreation.Inorderto
pursuetheperceivedopportunitiesforinnovationandtocreatevalue,theremust
beorganizedeffortsandactions.
6)AFunctionofRiskBearing:
Riskisaninherentandinseparableelementofentrepreneurship.Anentrepreneur
worksunderuncertaintiesandheassumestheuncertaintyoffuture.Inthepursuit
ofprofit,thereispossibilityoflossalso.
7)EntrepreneurshipImpliesGrowth:
Thenextcharacteristicinentrepreneurshipisgrowth.Onemajordifference
betweenentrepreneurialventuresandothersmallbusinessesistheemphasison
growth.
8)ManagerialSkillandLeadershipFunction:
Managerialskillandleadershiparethemostimportantfacetsofentrepreneurship.
Anentrepreneurmusthavetheabilitytoleadandmanage.

27. Characteristics of Entrepreneurship
9)Uniqueness:
Othercharacteristicfoundinentrepreneurshipisthatofuniqueness.
Entrepreneurshipinvolvesnewcombinationsandnewapproacheswithwhich
entrepreneursarewillingtoexperiment.
10)OrganizingFunction:
Itistheabilitytobringtogetherproductiveresourcesofsociety.Entrepreneur
coordinatesandcontroltheeffortsofallthepersonsengagedinhisenterprises.
Heharnessesland,labour,capitalandotherresourcesofforthebenefitsof
mankind.Therefore,anentrepreneuriscalledasanorganizationbuilder.

28. Need and Importance of Entrepreneurship
An entrepreneur assumes following functions:
Development of Managerial Capabilities
Creation of Organisations
Improving standards of Living
Means of Economical Development

29. Role of Entrepreneurship in Economic
Development
An entrepreneur assumes following functions:
Employment Generation
National Income
Balanced Regional Development
Better Standards of Living
Creating Innovation

30. Enterprise v/s Entrepreneurship

31. Benefits of Self Employment
•Freedom
•Being your own boss
•Earning more money (possibly becoming rich)
•Working fewer hours
•Independence
•Variety and choosing work you enjoy

32. Self Employment Vs. Entrepreneurship

33. Unemployment in India
Indiaasanationisfacedwithmassiveproblem
ofunemployment.Unemploymentcanbe
definedasastateofworklessnessforaman
whoisfitandwillingtowork.Itisacondition
ofinvoluntaryandnonvoluntaryidleness.

34. Types of Unemployment in India
•Seasonal Unemployment
•Voluntary Unemployment
•Frictional Unemployment
•Causal Unemployment
•Disguised Unemployment

35. Problem of Unemployment in India
•Rapid Population Growth
•Limited Land
•Seasonal Agriculture
•Fragmentation of Land
•Backward method of Agriculture
•Decline of Cottage Industries
•Lack of Transport and Communication
•Inadequate Employment Planning

36. Importance of wealth creation
•Economic development
•Development of backward regions.
•Helps in chain reaction

37. Entrepreneurial career as an option