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Entrepreneurship
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Unit - I
• Entrepreneur - meaning - importance - Qualities, nature, functions, types and traits.
• Entrepreneurship – Definition • Promotion of Entrepreneurship – Role of Socio-Cultural, Economic and
Political Environment. • Intrapreneur - Similarities and differences between entrepreneur and
intrapreneur
S.Vinoth, RVSIMSR, ED - Syllabus
Unit - II
• Entrepreneurial Motivation Theories• Entrepreneurial Competencies – Developing Competencies – Role of
Entrepreneur• Development Programs – Assistance Programme for Small Scale Units
– Institutional Framework • Role of SSI Sector in the Economy • SSI Units – Failure, Causes and Preventive Measures – Turnaround
Strategies
S.Vinoth, RVSIMSR, ED - Syllabus
Unit - III
• Identification of Business Opportunity• Preparation of Feasibility Report – Financial and Technical Evaluation• Project Formulation – Common Errors in Project Formulation • Specimen Project Report • Ownership Structures – Proprietorship, Partnership, Company, Co-
operative, Franchise.
S.Vinoth, RVSIMSR, ED - Syllabus
Unit - IV
• Project finance: Sources of finance • Institutional finance - Role of IFC, IDBI, ICICI, LIC, SFC, SIPCOT• Commercial Bank - Appraisal of bank for loans.• Institutional aids for entrepreneurship development - Role of DICS,
SIDCO, NSICS, IRCI, NIDC, SIDBI, SISI, SIPCOT • Approaching Institutions for assistance
S.Vinoth, RVSIMSR, ED - Syllabus
Unit - V
• Women Entrepreneurship – Need, Growth of women Entrepreneurship, Problems faced by Women Entrepreneurs, Development of women Entrepreneurship
• Entrepreneurship in Informal Sector • Rural Entrepreneurship
S.Vinoth, RVSIMSR, ED - Syllabus
References
• S.S.Khanka, Entrepreneurial Development, S.Chand and Co• C.B.Gupta and N.P.Srinivasan,Entrepreneurial Development, Sulthan
Chand & Sons• P. Saravanavel, Entrepreneurial Development, Ess Pee kay• Vasant Desai, Small Business in Entrepreneurship, Himalaya
Publications• Clifford M.Baumback & Joseph R.Mancuso, Entrepreneurship and
Venture Management, Prentice Hall• C.V.Bakshi, Entrepreneurship Development, Excel• P.C.Jain, Handbook for New Entrepreneurs, Oxford University Press
S.Vinoth, RVSIMSR, ED - Syllabus
Unit - I
• Entrepreneur - meaning - importance - Qualities, nature, functions, types and traits.
• Entrepreneurship – Definition • Promotion of Entrepreneurship – Role of Socio-Cultural, Economic and
Political Environment. • Intrapreneur - Similarities and differences between entrepreneur and
intrapreneur
S.Vinoth, RVSIMSR, ED - Syllabus
Entrepreneur
• Evolution of the Concept of Entrepreneur:• Derived from French Language –”Entreprendre” and German
word-”Uternehmen”- both referring to individuals who are undertakers.
• Oxford English Dictionary (1897)- “The director or manager of a public musical institution, one who gets-up entertainment, especially musical instrument”
• Early 16th century- Term referred to those in military expeditions• 17th century- Extended to cover civil engineering activities• 18th Century-Economic aspects• No commonly arrived definition• The Gartner study(1990) analyzed 90 definitions obtained form
academic ad business leaders with “NO REAL AGREEMENT””
S.Vinoth, RVSIMSR, ED - Unit 1
Entrepreneur
• Economist view- Entrepreneur is one who brings human resources, labour, raw materials and other assets into combinations that increases their value from before and also one who introduces changes, innovation and new order (refers to the function of an entrepreneur)
• Psychologist view- Entrepreneur is a person who is typically driven by some forces which create a desire to obtain or attain something (refers to the personality of entrepreneur)
• Sociologist view- Entrepreneur is a person whose actions would determine his social status and who contributes to the development of the society (refers to his role in the society)
S.Vinoth, RVSIMSR, ED - Unit 1
Entrepreneur
• Management view- Entrepreneur is a person who has a vision and generates an action plan to attain it (refers to the tasks he undertakes)
• Commonalities in views:• Entrepreneur as-• A risk bearer• An organiser• An innovator
S.Vinoth, RVSIMSR, ED - Unit 1
Entrepreneur
• Meaning:• An entrepreneur can be defined as a person who tries to create
something new, organizes production and undertakes risks and handles economic uncertainty involved in enterprise.
• The entrepreneur is intimately associated with the three elements – risk-bearing, organizing and innovating.
• Entrepreneur has been defined in various ways – an innovator, a risk-taker, an organizer and so on. Truly, an entrepreneur is all combined into one.
• The term ‘entrepreneur’ is used in various ways and various views. Theses views are broadly classified into three groups, namely, risk-bearer, organizer and innovator.
S.Vinoth, RVSIMSR, ED - Unit 1
Entrepreneur
• Meaning:• ‘An entrepreneur is an individual who brings together the factors of production in an
innovative way (usually in the form of a new business venture) to generate economic value’.• The entrepreneur is rewarded from the economic rent generated as a return for accepting
risk’.• The entrepreneur is an individual who fulfils a particular economic function by
undertaking certain Tasks.• The entrepreneur’s tasks• Owning the business• Founding new organisations• Bringing innovation’s to the market• Identifying opportunities• Applying expertise• Providing leadership
S.Vinoth, RVSIMSR, ED - Unit 1
Entrepreneur
• Characteristics of an Entrepreneur:• Hard Work• Desire for high Achievement• Highly Optimistic• Independence• Foresight• Good Organizer• Innovative• Risk tolerance• Communication skills• Technical knowledge• Clarity of objectives
S.Vinoth, RVSIMSR, ED - Unit 1
Entrepreneur
• Qualities of an Entrepreneur:
S.Vinoth, RVSIMSR, ED - Unit 1
• Initiative & Personality
• Technical Competence
• Leadership
• Commitment & Determination
• Self-Confidence
• Honesty and Sincerity
• Confidence in Employees
• Ability to delegate authority & responsibility
• Decision-making ability - Problems
• Opportunity and Goal Oriented
• Integrity and reliability
• Acceptance mentality of Criticism and feed back
• Low need for status and power
• Internal focus on Control
• Resourcefulness
• Patience, Willingness to Learn
Entrepreneur
• Functions of an Entrepreneur:• Innovation• Risk-taking• Decision Making• Organization and Management
S.Vinoth, RVSIMSR, ED - Unit 1
Entrepreneur
• Types of Entrepreneur:• Innovating Entrepreneurs• Adoptive or Imitative Entrepreneurs• Fabian Entrepreneurs (Shy and Lazy)• Drone Entrepreneurs – refuse to adopt the changes.• Others:• (a). Individual and Institutional Entrepreneurs• (b). Entrepreneurs by Inheritance (Family Business)• (c). Technologist Entrepreneurs• (d). Forced Entrepreneurs• (e). Rural and Urban Entrepreneurs• (f). Women Entrepreneurs• (g). Small Scale and Large Entrepreneurs
S.Vinoth, RVSIMSR, ED - Unit 1
Entrepreneur
• Types of Entrepreneur:• Business entrepreneur: Convert ideas into reality; deal with both
manufacturing and trading aspect of business (Small trading and manufacturing business)
• Trading entrepreneur: Undertakes trading activities; concerned with marketing (Domestic and international level)
• Industrial entrepreneur: Undertakes manufacturing activities only; new product development etc (textile, electronics, etc)
• Corporate entrepreneur: Interested in management part of organisation; exceptional organising, coordinating skills to manage a corporate undertaking
• Agricultural entrepreneur: Production and marketing of agricultural inputs and outputs (Dairy, horticulture, forestry)
S.Vinoth, RVSIMSR, ED - Unit 1
Entrepreneur
• Types of Entrepreneur:• Technical entrepreneur: Production oriented, possesses innovative
skills in manufacturing, quality control etc.• Non technical entrepreneur: Develops marketing, distribution
facilities and strategies• Professional entrepreneur: Uses the proceeds from sale of one
business to start another one. Brimming with ideas to start new ventures
S.Vinoth, RVSIMSR, ED - Unit 1
Entrepreneur
• Types of Entrepreneur:• Pure entrepreneur: Psychological and economic rewards motivate
him• Induced entrepreneur: Incentives, concessions, benefits offered by
government for entrepreneurs motivates him• Motivated entrepreneur: Sense of achievement and fulfillment
motivate him• Spontaneous entrepreneur: Born entrepreneurs with inborn traits of
confidence, vision, initiative• Forced entrepreneur
S.Vinoth, RVSIMSR, ED - Unit 1
Entrepreneurship
• “Entrepreneurship is the attempt to create value through recognition of business opportunity, the management of risk-taking appropriate to the opportunity and through the communicative and management skills to mobilize human, financial and material resources necessary to bring a project to fruition” –CoE, USA
• Creative and innovative response to the environment and an ability to recognize, initiate and exploit an economic opportunity.
• It is the tendency of a person to organise the business of his own and to run it profitability, using all the qualities of leadership. Decisions making and managerial caliber etc.
S.Vinoth, RVSIMSR, ED - Unit 1
Entrepreneurship
• “Entrepreneurship is the attempt to create value through recognition of business opportunity, the management of risk-taking appropriate to the opportunity and through the communicative and management skills to mobilize human, financial and material resources necessary to bring a project to fruition” –CoE (Conference of Entrepreneurship), USA
• Creative and innovative response to the environment and an ability to recognize, initiate and exploit an economic opportunity.
• It is the tendency of a person to organise the business of his own and to run it profitability, using all the qualities of leadership. Decisions making and managerial caliber etc.
S.Vinoth, RVSIMSR, ED - Unit 1
Entrepreneurship
• According to Schumpeter, “Entrepreneurship is based on purposeful and systematic innovation. It included not only the independent businessman but also company directors and managers who actually carry out innovative functions”
• According to A.H.Cole, “Entrepreneurship is the purposeful activity of an individual or a group of associated individuals, undertaken to initiate, maintain or aggrandize profit by production or distribution of economic goods and services”
• Entrepreneurship is a process involving various actions to be undertaken to establish an enterprise.
• Innovation and risk-bearing are regarded as the two basic elements involved in Entrepreneurship.
S.Vinoth, RVSIMSR, ED - Unit 1
Entrepreneurship
• Promotion of Entrepreneurship – A Function of Social, Political and Economic Structure:
• Entrepreneurs are not equally distributed in the population. Minorities (religious, ethnic, migrated, displaced elites) have been provided most of the entrepreneurial talent.
• The supply of entrepreneurship depends upon four structures found in a society or community:
(i). Limitation Structure – behavioral pattern of the individual is restricted.(ii). Demand Structure – Based on economic changes and government policies(iii).Opportunity Structure – Availability of capital, management and technological skills, information concerning production methods labour and markets.(iv). Labour Structure - Supply of Labour and willing.
S.Vinoth, RVSIMSR, ED - Unit 1
Entrepreneurship
• Promotion of Entrepreneurship
S.Vinoth, RVSIMSR, ED - Unit 1
•Political- • Political atmosphere• Quality of leadership
•Legal• Rules and regulations
•Economic• Policies• Labour• Trade tariffs• Incentives• Subsidies
•Social• Consumer- labour attitudes,
opinions and motives•Technological• Competition & Risk• Efficiency• Productivity and profitability
•Cultural• Structure• Aspirations and values
Entrepreneurship
Role of Entrepreneurship in Economic Development:• It promotes capital formation by mobilizing the idle saving of the
public.• It provides immediate large-scale employment – it reduce the
unemployment problem in the country• It promotes balanced regional development• It helps reduce the concentration of economic power• It stimulates the equitable redistribution of wealth, income and even
political power in the interest of the country.• It encourages effective resource mobilization of capital and skill which
might otherwise remain unutilized and idle.• It also induces backward and forward linkages which stimulate the
process of economic development in the country• It promotes country’s export trade
S.Vinoth, RVSIMSR, ED - Unit 1
Entrepreneurship
Environmental Factors Affecting Entrepreneurship:• Sudden changes in Government Policy• Sudden Political upsurge• Outbreak of war or regional conflicts• Political instability or hostile Government attitude towards industry• Excessive red-tapism and corruption among Government agencies• Ideological and Social Conflicts• Unreliable supply of Power, Materials, Finance, Labour and other
inputs• Rise in the Cost of Inputs• Unfavorable market fluctuations• Non-Cooperative attitude of Banks and Financial Institutions
S.Vinoth, RVSIMSR, ED - Unit 1
Intrapreneurs
Intrapreneurs• It was coined in US in the late Seventies. Many bright executives in big
corporations started leaving their jobs due to entrepreneurial trend and started their own enterprises.
• The term Intrapreneurs to describe the persons who registered from their well paid executive positions to launch their own ventures.
• Intrapreneurs introduce new products, services and processes which enable the company to grow and succeed in a changing environment.
• Many big corporations in America started practicing the intrapreneur concept. E.g., Dupont, AT & T (American Telephone & Telegraphic Co.), Texas Instruments …
S.Vinoth, RVSIMSR, ED - Unit 1
Intrapreneurs
Entrepreneur Vs Intrapreneur – Similarities:• Innovator• Risk-Taking• Technical Knowledge• Self-Confidence• Business Planning• Focus on Control• Communication Ability
S.Vinoth, RVSIMSR, ED - Unit 1
Intrapreneurs
Entrepreneur Vs Intrapreneur
S.Vinoth, RVSIMSR, ED - Unit 1
Difference Entrepreneur Intrapreneur
Dependency Independent in his operations
Dependent on the entrepreneur ie., the owner
Raising of funds Raises funds for his organization
Does not raise funds for the company for which he works
Risk Bears the risks of his business
Does not fully bear the risks of his business
Operations Operates from outside Operates from within the organization
Orientation Mostly Strategy Mostly Operations
Managers Vs. Entrepreneurs Vs. Intrapreneurs
S.Vinoth, RVSIMSR, ED - Unit 1
Traditional managers Entrepreneurs Intrapreneurs
Primary Motive Promotion, traditional rewards
Independence, money, innovation
Independence, ability to advance in corporate rewards
Time orientation Short term- within planned horizons
Survival, 5-10 years of growth
Depends on urgency between corporate and self-imposed demands
Activity Delegates and supervises more
Direct involvement Direct involvement more than delegation
Risk status Careful Moderate risk taker Moderate risk taker
Status Concerned about status symbol
Not concerned about status symbol
Not concerned about status symbol
Managers Vs. Entrepreneurs Vs. Intrapreneurs
S.Vinoth, RVSIMSR, ED - Unit 1
Traditional managers
Entrepreneurs Intrapreneurs
Failures and mistakes Tries to avoid them Deals with them Hides risky projects until they are ready
Decisions Gets along with upper management decisions
Follow their dreams
Make others agree to help achieve their dreams
Serves Others Self and customers Self, customers and sponsors
Family history Mostly employed in large organizations
Small business, Entrepreneurial, professional, farm background
Small business, Entrepreneurial, professional, farm background
Relationship with others
Hierarchical Transactions and deal making
Transactions within hierarchy
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