Chapters 2,3,4,5 of entrepreneurship by dr manishankar chakraborty

Entrepreneurship Chapters 2,3,4 and 5

Dr. Manishankar Chakraborty

Ibra College of Technology

Lesson-2

Entrepreneur and Entrepreneurial Competencies

• Famous Entrepreneurs

• Sheikh Saud Salim Bahwan,Saud BahwanGroup

• Dr Mohammed Al Barwani, MB Holdings

• Abdulla Ahmad Sulaiman Al Hadi, Gulf MiningMaterials Company

• Kanaksi Gokaldas Khimji, Khimji Group

• Bill Gates, Microsoft

2/18/2015 Dr. Manishankar Chakraborty, ICT, Oman 2

Lesson-2Entrepreneur and Entrepreneurial Competencies

• Who is an entrepreneur?

• An entrepreneur is one who creates a newbusiness in the face of risk and uncertainty forthe purpose of achieving profit and growth byidentifying opportunities and assembling thenecessary resources to capitalize on them.



• Risk- It is the threat or probability that anaction or event will adversely or beneficiallyaffect an organization’s ability to achieve itsobjectives.

• Uncertainty- It is a state of having limitedknowledge where it is impossible to exactlydescribe existing state or future outcome,more than one possible outcome.



• Resources required for business:

• Four basic resources required for a business areMan, Machine, Material and Money.

• Entrepreneur is a person who-

• Identifies opportunities and gathers resources toestablish/create a new business.

• Bears risk and uncertainty

• Runs a business

• Receives financial and social rewards



• Title of an Entrepreneur• Business Owner• General Manager• Administrator• Proprietor• Business Developer• Managing Director• President• Chief Executive Officer(CEO)• Chief Operating Office (COO)• Business Leader



• Functions of Entrepreneur

• 1. Risk Assumption

• Should necessarily act as a risk bearing agent of production since he has to handle a greater amount of uncertainties in business

• Risk due to the possibility of changes in the taste of customers, change in fashion and technique of production cannot be insured



• An entrepreneur therefore has to takecalculated risks.

• 2. Decision-making process

• An entrepreneur has to decide the nature andtype of goods to be produced, the size of thebusiness, its location, technique ofproduction, type of employees etc.



• 3. Managerial Function

• An entrepreneur has to know the managerialfunctions like coordination, organization andsupervision.

• 4. Function of Innovation

• The person who discovers new methods, newmaterials and machines is called as Inventor.



• The person who utilizes the inventions so as tomake new combinations of products is calledas Innovator.

• An entrepreneur has to be always on thelookout to introduce a new product or a newproduction technology or open a new markethitherto untapped potential or discover newsource of supply of new material.


Lesson-2

Entrepreneur and Entrepreneurial

Competencies

• Types of Entrepreneur• They are classified on the following basis-• 1. According to the type of Business• Business entrepreneurs• Trading entrepreneurs• Industrial entrepreneurs• Agricultural entrepreneurs• Retail entrepreneurs• Service entrepreneurs



• 2. According to gender

• Men entrepreneur

• Women entrepreneur

• 3. According to the area of operation

• Urban entrepreneurs

• Rural entrepreneurs


Lesson-2

Entrepreneur and Entrepreneurial

Competencies

• 4. According to risk taking ability• (a)Innovative entrepreneur-• Who can foresee potentially viable and profitable

opportunities through innovation.• Example- Apple and i-phone• They are motivated, talented as innovation is

their key function.• As per Peter Drucker, “One who always searches

for change, responds to it and exploits it as an opportunity”.


Lesson-2Entrepreneur and Entrepreneurial

Competencies• (b)Adoptive or Imitative entrepreneur

• One who is ready to adopt the successful innovations already started by innovating entrepreneurs.

• Example- Microsoft coming out with their own search engine, Bing after Google.

• Imitative entrepreneur does not innovate, he only imitates techniques and technologies of innovators.



• (c) Fabian entrepreneur-

• He is one who adopts a great caution in introducing any changes in the business.

• Example- Companies making aeroplanes (Boeing and Airbus)

• He has neither the will to introduce any new changes nor the desire to adopt new methods.

• He imitates when he is clear that failure to do so would result in heavy loss.


Lesson-2Entrepreneur and Entrepreneurial

Competencies• (d)Drone entrepreneur-

• One who blindly follows the traditional methods of production even when it causes loss to him.

• Example-Government owned companies in developing countries like India having this approach towards the public sector controlled companies.

• He carries out business in traditional way even after making losses.


Lesson-3Major Entrepreneurial Competencies

• Entrepreneurial competencies refers to thekey characteristics possessed by anentrepreneur to perform important functions.

• This includes Knowledge Skills and Attitude

• Competencies required for successfulentrepreneurs

• Check from next slide




Competencies required for successful entrepreneurs are:

Competencies Definitions/ Illustration

1. Initiative Does things before being asked or forced to, by events.

2. Assertiveness Confronts problems with others directly. Tells others what they have to do.

Achievement Orientation

3. Sees and acts on opportunities

Looking for opportunities and take action to use the opportunities. Action like obtaining financing, land, work, space, or assistance.

4. Efficiency orientation Looks for or finds ways to do things faster or at less cost.

5. Concern for high quality of work

Desire to produce or sell a top or better quality product or service.

1. Systematic Planning

Develops logical, step by step plans to reach the goal. (Breaks a large task down into subtasks, or sub goals, anticipates obstacles, and evaluates alternatives.)

7. Monitoring Develops or uses procedures to ensure that work is completed or that work meets standards of quality.

Commitment To Others

8. Commitment to work contract Makes a personal sacrifice or expends (use/ apply)

extraordinary effort to complete a job, pitches in with

workers or works in their place to get the job done.

9. Recognizing the importance

of business relationships

Acts to build rapport or friendly relationships with

customers sees interpersonal relationships as a

fundamental business resource, places long-term

goal will over short-term gain.


• Other competencies

• Persistence

• Problem solving

• Self-confidence

• Monitoring

• Concern for other’s welfare


Lesson 4Role of Entrepreneurship in Oman’s Economic

Development

• Projection for the Vision for Oman’s economyOman 2020

• Check the table from next slide.

• Gross Domestic Product is the value of acountry’s overall output of goods andservices(during one fiscal year) at marketprices, excluding net income from abroad.



Development


Activity 1995 2000 2020

Oil 33.5 25.9 9.0

Gas 1.5 5.0 10.0

Agriculture 3.0 3.5 3.1

Fishing 1.1 1.0 2.0

Mining & Quarrying 0.6 0.6 2.0

Manufacturing 5.4 6.8 15.0

Electricity & Water 1.7 4.3 2.0

Building, Construction & Real Estate 3.2 6.9 10.0

Trade & Tourism 14.1 17.8 18.0

Transportation & Communication 7.0 8.6 8.0

Banks, Insurance and Financial Services 7.9 4.3 8.0

Other Private Services* 8.3 3.2 5.0

Public Services 13.9 12.6 10.0

Gross Domestic Product 100.0 100.0 100.0


Development• Role of entrepreneurship in economic

development

• Entrepreneurship helps in creating job/employment.

• It helps in increase number of enterprises.

• It promotes healthy competition leading to innovation and creativity.

• It encourages in exploration and utilization of natural resources.


Lesson 4Role of Entrepreneurship in Oman’s

Economic Development• It promotes the country’s exports which is

very important for economic development.

• It helps in generating wealth at all levels in a society(equal distribution of income).

• It helps in improving social and community condition( improved standard of living)



Development

• Characteristics of Enterprising Society• Continuous discovery of unidentified needs of

economy.• New ideas continuously infused for revitalization and

growth of economy.• Constant solving of problems experienced in

economy/society.• Useful goods and services constantly

produced/provided.• Wide distribution of needed goods and services

throughout the population.



Development

• Entrepreneurship provides:

• Economy with small enterprises which growinto medium and large enterprises.

• Competition throughout the economy amongsmall, medium and large firms alike, leading toimproved products, services and efficiency insociety and economy.



Development

• Factors stimulating entrepreneurship:

• Capital formation

• Entrepreneurship Development Programs

• Training Facilities

• Suitable Environment

• Collateral Arrangements

• Ideal climate for Innovation


Lesson-5Difference between Entrepreneur and Other

Business People

Businessman / Business Entrepreneur / Entrepreneurship

Own an enterprise or venture Own an enterprise or venture

Usually a profit oriented Customer oriented

Usually plays safe Bold and ambitious (motivated)

May be purchased, donated or inherited Creates his own idea and realize it as a

business

Generally traditional An innovator

Employee's role is not too significant Employee's role is significant as ideas are

shared with them

Usually distressed and faces more pressure Happy and enthusiastic businessman

Generally hire people to contribute profit Hire people to make their lives better



Business People


Entrepreneur Vs Manager: A Comparison

There are misconceptions that entrepreneur and manager are the same. However, the reality is that they are different.

Entrepreneur Manager

Owner- An entrepreneur is the owner of his

own business.

Servant- A manager is a servant of his employer.

Profits- An entrepreneur earns profits from his

business which is uncertain and unlimited.

Salary- A manager earns salary which is

generally certain and limited.

Full Risk Bearing- An entrepreneur is a person

who has to take high risks for starting and

running venture.

Less or No Risk Bearing- A manager takes less

or no risk while performing his job.

All Functions- An entrepreneur has to look

after all the functions of his organization.

Selective Functions- A manger looks after

selective functions of an organization.

Innovator- An entrepreneur is always an

innovator, in the lookout for new products and

services.

Executor- A manager is simply an executor who

is responsible for executing the decisions of the

owner and entrepreneur.


Business People


Ent er pr ise

Competencies needed to be an Entrepreneur

Competencies may be defined as:

a body of knowledge a set of skills a cluster of traits

Knowledge consists of a set or body of information stored, which may be recalled at an appropriate time. Knowledge in the context of business may be to have information with aspects such as business opportunity, customers, the market, business management and different processes etc. Skill is the ability to apply knowledge. It can be acquired or developed through practice. In the context of business, it is possible to distinguish between skills of a technical and managerial nature. Such as: Technical Skills Managerial Skills Engineering Organizing Computing Planning Carpentry Marketing (including selling) Mechanics Financial management Trait is the total of qualities or characteristics that constitutes (comprise, form) personal individuality. Traits like initiator, persistent, efficiency oriented, take calculated risks, persuasive, self-confidence, assertive etc.

Knowledge

TraitsSkills

Education

Chapters 2,3,4,5 of entrepreneurship by dr manishankar chakraborty