Unit 1 Syllabus

Introduction to Entrepreneurship
Definition of Entrepreneur, Entrepreneurial Traits,
Entrepreneur vs. Manager,
Entrepreneur vs Intrapreneur.
The Entrepreneurial decision process.
Role of Entrepreneurship in Economic Development,
Ethics and Social responsibility of Entrepreneurs.
Opportunities for Entrepreneurs in India and abroad. Woman
as Entrepreneur.
 Entrepreneurship: Concepts &
Definitions
“Entrepreneurship is the process of
creating something new with value by
devoting the necessary time and effort,
assuming the accompanying financial,
psychic, and social risks, and receiving the
resulting rewards of monetary and
personal satisfaction of independence.”…
Robert Hisrich
 Entrepreneurship: Concepts &
Definitions
“Entrepreneurship is an act of initiative, drive,
commitment, diligence, perseverance,
organized effort, and achievement outlook, to
undertake some specific functions of
performing productive activities and the
capacity to bear and associated with the
investment”.-- Economic Policy Paper on
Entrepreneurship Development through Educational
Reform-Bangladesh
 OBJECTIVES OF
ENTREPRENEURSHIP
 10 traits of the successful entrepreneur
1. Disciplined
Successful entrepreneurs are disciplined enough to take steps every
day toward the achievement of their objectives.
2. Confidence
They are confident with the knowledge that they will make their
businesses succeed. They exude that confidence in everything they do.
3. Open Minded
Ideas are constantly being generated about workflows and efficiency,
people skills and potential new businesses. They have the ability to
look at everything around them and focus it toward their goals.
4. Self Starter
They are proactive, not waiting for someone to give them permission.
 10 traits of the successful entrepreneur
5. Competitive
An entrepreneur will highlight their own company’s track record of
success.
6. Creativity
One facet of creativity is being able to make connections between
seemingly unrelated events or situations. Entrepreneurs often come up
with solutions which are the synthesis of other items. They will
repurpose products to market them to new industries.
7. Determination
They are determined to make all of their endeavours succeed, so will
try and try again until it does.
8. Strong people skills
Most successful entrepreneurs know how to motivate their employees
so the business grows overall. They are very good at highlighting the
benefits of any situation and coaching others to their success.
 10 traits of the successful entrepreneur
9. Strong work ethic
The successful entrepreneur will often be the first person to
arrive at the office and the last one to leave. They will come
in on their days off to make sure that an outcome meets
their expectations. Their mind is constantly on their work,
whether they are in or out of the workplace.
10. Passion
Passion is the most important trait of the successful entrepreneur.
They genuinely love their work. They are willing to put in those extra
hours to make the business succeed because there is a joy their
business gives which goes beyond the money. The successful
entrepreneur will always be reading and researching ways to make the
business better.
 Entrepreneur vs Manager
Point of Distinction Entrepreneur Manager
1. Venture An entrepreneur sets up a new A manager does not take a new
enterprise or undertakes a venture and renders services in
venture for his personal an existing enterprise.
gratification.
2. Riskbearing An entrepreneur assumes risk A manager does not assume or
of economic uncertainty share any risk involved in the
involved in the enterprise. enterprise he is serving.
3. Reward The reward of an entrepreneur The reward of a manager for
for his risk-bearing role is rendering his services is salary
profits. It is not only uncertain which unlike profits is fixed
and irregular but can at times and regular and can never be
be negative also. negative.
4. Continuity Entrepreneurial activities are Managerial activities are
discontinuous appearing to mainly continuous involving an
initiate change in the ongoing coordination of
production process and then business operations.
disappearing until another
change is initiated.
 Point of Distinction Entrepreneur Manager
5. Innovation In order to maximise the On the contrary, a manager
profits, the entrepreneur applies simply keeps running the
innovation from time to time in enterprise on already established
the enterprise. Therefore, an lines on a routine basis. That is
entrepreneur is also called a why a manager is called the
change agent. product of change brought about
by the entrepreneur.

6. Status-Role An entrepreneur is his own By contrast, a manager is a

boss and enjoys an independent servant i.e. salaried person
status as the owner of the serving in the enterprise of some
enterprise. one else i.e. the entrepreneur.
Thus, he is not independent but
the dependent of the
entrepreneur.

7. Prerequisites In consonance with the But, a manager needs distinct

entrepreneurial role, an qualifications such as
entrepreneur needs pre- knowledge of human behaviour,
requisites like mission, creative management theory, etc.
thinking, risk-bearing ability, Because, the managers are made
etc. not born.
 Entrepreneurship: The Importance

•Central to the development of economy

•The micro and small enterprises (MSEs)
constitute over 90% of total enterprises in most of
the economies.
•Employment generation
•MSE sector accounts for about 39% of the
manufacturing output and around 33% of the
total export of the India (in term of value).
----Ministry of MSME-GOI
 Entrepreneurship: The Importance
•Entrepreneurship and balanced regional development - Imbalanced
regional development means a few sectors of an economy are developed and others
remained undeveloped.
•This is a major problem faced by an under developing country.
•Entrepreneurs are not willing to invest in these sectors due to lack of availability of
infrastructural facilities. It is the government who can encourage entrepreneurs to
invest in these sectors by giving then subsidies and concessions.
•balanced regional development can be ensured with the help of entrepreneurs

•Increase in per capita income – How ?

•Per capita income can be increased either by reducing population or by increasing
national income.
•Entrepreneurs play an important role in the growth of national income by utilizing
the resources land, labour and capital. As they are innovators they can device new
methods and techniques with minimum of cost and maximum profits which leads to
increase in national income , increase in per capita income.
 Entrepreneurship: The Importance
•Generation of employment -- Entrepreneurs firstly generate self employment
and secondly be employing others in their enterprise , solve unemployment
problem of others. Small scale units need less investment and absorb a large
number of unemployed persons.
•Raise standards of living -- Entrepreneurship help in rising the standard of
living of people of the country. As entrepreneurs invest in small scale and large
scale industries which leads to industrial growth in the country and industrial
growth in turn leads to availability of abundance of goods for the consumers. As
supply of goods increase it will lower the price of commodities, become
accessible to every walk of people in under developed countries and improves
their standard of living
•Self Sufficiency -- Self sufficiency means a stage where a country is not
dependent on world economy for its needs. Tools of self sufficiency are export
promotion and import substitution. With the help of developed entrepreneurial
structure a nation can increase its production. When the production of goods in
the country is increased, the surplus which will left over after satisfying the
domestic consumption can be exported, and with this we can earn foreign
currency.
 Features of Entrepreneurship
1. Innovation is an important function of entrepreneurship .
Innovation means doing something new or doing old things in
new or different way . It is the introduction of new methods and
ways of doing the work. an entrepreneur should be innovative.
According to Drucker, innovation is the means by which
entrepreneur either creates new wealth producing resources
or endows existing resources with new products, services,
ideas, and information”

2. Risk bearing. What are the types of risk?

Risk bearing is also an important function of entrepreneurship.
Prof knight in his theory ‘ Risk uncertainty and profits’ defines
there are two types of risk;
Foreseeable risk – is the risk which can be insured and capable of
being calculated.
Unforeseeable risk.- is the risk which can’t be insured and it is
tough to calculate it.
 Features of Entrepreneurship
3. Organizing function
entrepreneurship can also be defined as an organizing function.
Organization means organizing all the factors of production and directing
them towards the attainment of the goal of organization.
4. Management skills.
Entrepreneur must posses managerial skills like motivation and leadership.
Motivation is inner urge that emerges the behaviour towards achievement
of goals. It can be positive and negative, financial and non-financial and
leadership is to direct the people to do what you want your men to do.
5.Economic activity.
Entrepreneurship is an economic activity as it is concerned with earning
more and more profits.
6. Goal oriented.
Entrepreneurship is an goal oriented activity. It is undertaken to achieve
the predetermined goals of the entrepreneur.
 The Entrepreneurial
Process
Starting the Venture:
 Researching
Exploring the Identifying Feasibility
Entrepreneurial Opportunities/Possible  Planning the Venture
Context Competitive Advantage
 Organizing the
Venture
 Launching the
Venture

Managing the Venture:

 Managing Processes
 Managing People
 Managing Growth
 Special Issues
 The Cultural Diversity of
Entrepreneurship
• Young entrepreneurs
• Women
• Minority-owned enterprises
• Immigrant entrepreneurs
• Part-time entrepreneurs
• Home-based businesses
• Family businesses
• Copreneurs
• Corporate cast-offs
• Corporate dropouts
 Entrepreneurs V. Intrapreneurs

• Entrepreneurs are people that notice opportunities

and take the initiative to mobilize resources to make
new goods and services.
• Intrapreneurs also notice opportunities and take
initiative to mobilize resources, however they work in
large companies and contribute to the innovation of
the firm.
• Intrapreneurs often become entrepreneurs.
 Intrapreneurship
• Learning organizations encourage intrapreneurship.
– Product Champions: people who take ownership of a product from
concept to market.
– Skunkworks: a group of intrapreneurs kept separate from the rest of
the organization.
– New Venture Division: allows a division to act as its own smaller
company.
– Rewards for Innovation: link innovation by workers to valued rewards.
 ENTREPRENEURIAL DECISION PROCESS
1. Exploring the entrepreneurial context
2. Identifying opportunities and possible competitive
advantage
3. Starting the venture
i) Researching feasibility
ii) Planning the venture
iii) Organizing the venture
iv) Launching the venture
4. Managing the venture
i) Managing processes
ii) Managing people
iii) Managing people and Entrepreneurial challenges
 ROLE OF ENTREPRENEURSHIP IN ECONOMIC DEVELOPMENT

• Promotes capital formation by mobilizing idle savings

• Provides immediate large-scale employment
• Helps in reducing the concentration of economic power
• Stimulates equitable redistribution of wealth, income
• Promotes country’s export trade: an important ingredient
to economic development
• Encourages effective resource mobilization of capital and
skill
The Social Entrepreneurship Movement
• Social Entrepreneurship
A new form of entrepreneurship applies to social
problem solving tradition, private-sector
entrepreneurship’s focus on innovation, risk-taking, and
large scale transformation.
• Social Entrepreneurship Process
 Recognition of a perceived social opportunity
 Translation of the social opportunity into an enterprise
concept
 Identification and acquisition of resources required to
execute the enterprise’s goals.
 Social Entrepreneurs
• A person or small group of individuals who founds and/or
leads an organization or initiative engaged in social
entrepreneurship.
• Also referred to as “public entrepreneurs,” “civic
entrepreneurs,” or “social innovators.
• Characteristics of Social Entrepreneurs as Change Agents:
 Adoption of a mission to create and sustain social value
(beyond personal value)
 Recognition and relentless pursuit of opportunities for social
value
 Engagement in continuous innovation and learning
 Action beyond the limited resources at hand
 Heightened sense of accountability
The Ethical Side of Entrepreneurship
• Why are ethics important?
• What exactly represents right or wrong
conduct?
• How do we develop our own codes of
conduct?
• What impact does integrity and ethical
conduct have on creating a successful venture?
 Ethics of Entrepreneurship
• Ethics
 A set of principles prescribing a behavioural code that
explains what is good and right or bad and wrong; ethics
may outline moral duty and obligations.
 Provide the basic rules or parameters for conducting any
activity in an “acceptable” manner.
• Reasons for Ethical Conflicts
 The many interests that confront business enterprises
both inside and outside the organization
 Changes in values, mores, and societal norms
 Reliance on fixed ethical principles rather than an ethical
process
Entrepreneurial opportunities in India and
Abroad
• Water • Transportation &
• IT & Telecom Logistics
• Healthcare • Infrastructure
• Education • Alternative Energy
• Entertainment • Retail
Real Estate • Hospitality & Travel
Rural Development
 Women as Entrepreneur
• women entrepreneurs based on women
participation in equity and employment of a
business enterprise.
• Accordingly, a woman entrepreneur is defined
as an enterprise owned and controlled by a
woman having a minimum financial interest of
51% of the capital and giving at least 51% of
the employment generated in the enterprise
to a woman.
 Three categories of women entrepreneurs
• First Category :
 Established in big cities
 Having higher level technical & professional qualifications
 Non traditional Items
 Sound financial positions
• Second Category :
 Established in cities and towns
 Having sufficient education
 Both traditional and non traditional items
 Undertaking women services-kindergarten, crèches, beauty parlours, health
clinic etc
• Third Category:
 Illiterate women
 Financially week
 Involved in family business such as Agriculture, Horticulture, Animal Husbandry,
Dairy, Fisheries, Agro Forestry, Handloom, Power loom etc.
 Problems faced by women entrepreneurs

• Start up finance
• Working capital management
• Marketing skills
• Access to technology
• Regulatory requirements
• Management skills
• Lack of confidence.
 Motives of women as an
Entrepreneur
• Imaginative
• Attribute to work hard
• Persistence
• Ability and desire to take risk
• Profit earning capacity
 How to Develop Women Entrepreneurs?

• Consider women as specific target group for all

developmental programs .
• Adequate training programme on management
skills to be provided to women community.
• Encourage women's participation in decision-
making.
• Training on professional competence and
leadership skill to be extended to women
entrepreneurs.
An Integrative Model of
Entrepreneurial Inputs and Outcomes
 Aspects of Entrepreneurship

Venture
Financing

Corporate Social
Entrepreneurship Entrepreneurship

Trends in Women
Entrepreneurial
Entrepreneurship and Minority
Cognition
Research Entrepreneurs

Global
Entrepreneurial
Entrepreneurial
Education
Movement
Family
Businesses
Key Elements in Entrepreneurship

•Motivation & Commitment

•Abilities & skill
•Resources
•Strategy & vision
•Planning & organisation
•The idea in relation to the market
 Key Elements in Entrepreneurship
Motivation & Commitment
1. How does the motivation of an owner affect the business?
The motivation of the entrepreneur is driven by their type, of which there
are three.
The “craftsman” entrepreneurs are focused on quality of life and are
therefore seeking to satisfy themselves and to satisfy just one or two
customers.
The “classical” entrepreneur is driven by profit. Their main driving force
is to maximise returns from the market place.
The third area is one of a “manager” entrepreneur. They are strongly
orientated and have a personal need to prove their worth through business
success. They are likely to be in a mature market. A mature market is one
where the customers know the product or service offering and do not
need to be educated about. (where they can succeed.)
 Key Elements in Entrepreneurship
Motivation & Commitment
2. How do (‘push and pull’) factors affect motivation to start a business?
Motivations to start a business - “push or pull”
Be my own boss 25%
Control over my life/independence 17%
Better financial prospects 13%
Spotted a market opportunity 14%
To make a lot of money 6%
To have a more balanced lifestyle 5%
No real alternative 12%
To do what I enjoy 5%
Source: Barclays Bank Survey (1992)

Push: factors are those that propel one into their own business, perhaps involuntarily at
first e.g. redundancy..
Pull: factors are positive factors in the marketplace and in an individual’s character
which makes them want to succeed e.g. market opportunity and the drive to succeed..
 Key Elements in Entrepreneurship
Motivation & Commitment
3. What are the three main factors to consider when setting-up in business?
There are three factors that have to come into play when offering advice to people
setting up and running a business. Those of 1) risk, 2) reward and 3) timing.
Risk: The risk may be too great in a volatile, changing market place, where the
product requires constant changes and updates If you don’t have the resources in
place to cover these problems, you risk will be higher.
Reward: Whilst the risk might be acceptable, the return or reward might not be
adequate. The individual should be looking for a reasonable return for efforts in
running that business.
Timing: Timing is crucial to the success of a business. Never enter a saturated market
unless you have powerful point of difference or unique selling point. Early entrance
to market should be the most successful strategy; satisfying initial demand and
getting established as a recognised provider for future demand. Timing applies
equally to resources. If you set up a market proposition but cannot produce the goods
in time you will rapidly lose credibility and hence market share.
 Key Elements in Entrepreneurship
Abilities & skill
Can anyone set up in business or do you have any
special skills and characteristics?
The requirement for specialist skills and characteristics
will depend on the industry. Some, not all, businesses
require technical skills. Management skills are critical to
all business.
Negotiating skills, selling skills, administrative skills,
along with the ability to be able to identify target markets
and customers are all required when setting up and
running a business.
 Key Elements in Entrepreneurship
Abilities & skill
Can anyone set up in business or do you have any
special skills and characteristics?
The requirement for specialist skills and characteristics
will depend on the industry. Some, not all, businesses
require technical skills. Management skills are critical to
all business.
Negotiating skills, selling skills, administrative skills,
along with the ability to be able to identify target markets
and customers are all required when setting up and
running a business.
 Key Elements in Entrepreneurship
Resources
How do you identify your resources and which is the most important
one?
If you have got the motivation, the skill, the idea and the market place,
resources is the next issue.
You need to think through how that business is going to operate, to walk
yourself through the business. By doing this you will identify the type of
people you require, the jobs that are going to be undertaken, the
equipment, the finance, the customers and other resources particular to
your business.
The resources have to be used in the most effective manner to be able to
maximise the returns from the business. You need to develop the
networks and the contacts which enable access to the appropriate
resources at the right time. In this way you will continually add value to
the business.
 Key Elements in Entrepreneurship
Strategy & vision
What is the importance of strategy and vision, when
starting a business?
You should be able to envisage what the business will
look like in3, 5 and 10 years time. Equally you should be
able to anticipate how you are likely to retain that
position. It is through:
Developing the existing market or product
New products or markets
Developing a particular aim of the business, e.g. interests
overseas
Key Elements in Entrepreneurship
Define
problem/issue

Measure Collect
relevant data
results

Implement Develop
chosen alternative
solution solutions

Select Assess
optimum consequences The Classic
solution
Planning Cycle
 Key Elements in Entrepreneurship
The idea in relation to the market
How do you choose a profit making idea?
The business idea is key to success. The idea itself might come
about by friends and so forth.
To validate the idea it is a good idea to check with people who
know about that particular industry. Do they think there is a gap on
the marketplace and that the product could be serviced?
It is also a good idea to use the internet, to see if the idea has been
done anywhere else in the world before.
Following discovery and validation of the idea, you must consider
profitability. Can the product be sold at a profit and therefore
generate the income stream that is required to run a successful
business.
Entrepreneurship-Advantages
1) Generation of Employment.
2) Increasing per Capita Income.
3) Helping in Capital Formation.
4) Balanced Regional development.
5) Optimum Utilisation of Resources.
6) Promoting Self reliance.
7) Helps in raising living standards .
8) Mobilise the Idle savings & formation of capital.
9) Dispersal of economic wealth.
10) Economic independence.
11) Life line of Nation.
Entrepreneurship-Disadvantages
There are various factors responsible for the failure of
entrepreneurship. Karl H Vesper has identified following
entrepreneurship:
1)Lack of Viable concept.
2)Lack of market Knowledge.
3)Lack of technical skill.
4)Lack of seed Capital.
5)Lack of Business Knowledge.
6)Complacency-Lack of motivation.
7)Social Stigma.
8)Time pressure and distractions.
9)Legal constraints and regulations.
10)Monopoly and protectionism.
11)Inhibitions due to patents.
12)Low Level of Commitment
13)Shortage of Resources
14)Inferior Communication Network
Nine Deadly Mistakes of Entrepreneurship

1. Management incompetence
2. Lack of experience
3. Poor financial control
4. Failure to develop a strategic plan
5. Uncontrolled growth
6. Poor location
7. Improper inventory control
8. Incorrect pricing
9. Inability to make the “entrepreneurial transition”
 Questions Bank (Short Questions)
1. Define entrepreneurship.
2. What are the kinds of objectives constitute the objectives of entrepreneurship?
3. How entrepreneurship plays vital role on nation development?
4. How to balance the regional development based on Entrepreneurship?
5. How to increase the capita income of the country?
6. How to rise the living standards of people?
7. What are the types of risks bearing in entrepreneurship?
8. What are the differences between starting venture and managing venture?
9. What are the similarities of entrepreneurs and intrapreneurs?
10. How do you differentiate entrepreneur with intrapreneur?
11. What are the ways of learning organisations encourage the intrapreneurship?
12. Enumerate the entrepreneurial decision process.
13. List the social entrepreneurship process.
14. What do you know about social entrepreneur?
15. What do you understand ethics of entrepreneurship?
16. What are the reasons for ethical conflicts.
17. List various entrepreneurial opportunities in India?
18. What are the categories of women entrepreneurs?
19. What are the problems faced by women entrepreneurs?
20. What are the motives women becoming an entrepreneur?
21. How to Develop Women Entrepreneurs?
22. What are the identified mistakes of entrepreneurship?
 Questions Bank (Descriptive type Questions)
1. Discuss the common traits of successful Entrepreneur.
2. Explain the difference between Entrepreneur and Manager in an
organization.
3. Explain the important elements in entrepreneurship.
4. Explain the entrepreneurial decision process.
5. Discuss the social entrepreneurship and entrepreneurs.
6. Discuss about women entrepreneurship and its emergence.
7. Discuss various key elements in entrepreneurship.
8. What are the advantages and disadvantages of entrepreneurship.
9. Explain the interactive model of entrepreneurial process.