e d mod 1 introduction

8/7/2019 E D Mod 1 Introduction

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Entrepreneurship Development

Syllabus head - Module 1

Meaning of Entrepreneurship

Evolution of the concept

Functions of an Entrepreneur

Types of an Entrepreneur,

Intrapreneur Emerging class,

Concept of E

Evolution of E

Development of E E- r Culture

Stages of E neurial process ( 8Hrs )


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Who is E-r? What is E-ship?

E-r is a person who organizes and manages a businessundertaking and assumes risk for the sake of profits

Operating a business needs certain skills. Few peoplehave all the skills, but they can compensate by hiringstaff and consultants and become knowledgeablethrough training or education.

E-r is a person who creates an enterprise. The process

of creation is called E-ship


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( Continued)

Word entrepreneur is a French word, enterprendremeaning to undertake, Those who undertook the risk of newenterprises.

French tradition respected an E-r as a person who translates a

Profitable Ideas into Productive activity. Encyclopedia Britannica : A person who bears the risk of

operating a, in the face of uncertainty about the futureconditions.

Peter Drucker : - One who searches for change, response to it

and it and exploits opportunities, Joseph Scumpeter :- One who innovates and introduces

something new in the economy.

ILO: Ability to see/ evaluates B opportunities and get Resours


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Evolution of the concept (development)

Earliest Period: Marko Polo, who attempted to establish his

routes to the Far East. He would sign a

contract with a Capitalist to sell his goods. Capitalist was a passive Risk Bearer While

Merchant adventurer took active role in

trading

Profits were shared between Capitalist and

Merchant @75% and 25%


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Middle Ages:

E-r was used to describe as actor and theperson who managed the large Production

Projects. 17th Century: A person who entered into a

contractual arrangements with Govt. to supplya product or Service.

John Law, a French man, was allowed to establish a Royalbank, to form a trading company- The Mississippicompany. He pushed the stock price higher than the assetvalue, lead to Monopoly and collapse of the company.


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Richard Cantillon ( 1700) , understood Laws mistake, developed the

concept Founder, a risk taker- farmers, merchants, craftsmen, soleproprietors, operating RISK ( buy @ certain price and sell @ uncertainprice) are E-rs.

17th Century E-r were contractors, who bore the risk of profit or loss

18th Century:

- Industrialization occurred throughout the world.Capital providerand a Capital User- Inventions of EliWhitney (cotton gin ) and Thomas Edison (chemistry&electricity) took place , but they could not finance.

-Whitney used finance from British crown, Edison from

private financier.- Users of finance were E-r and providers venture

capitalists


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19th: and 20th Century

E-r and Manager were not distinguished differently,considered alike. Eg. Andrew Carnegie ( Scottish).

(Invented nothing, but adapted and developed new technology inAmerican steel Industry)

- In the middle of 20th Century, Innovator was called as E-r.

( Revolutionize production, by exploiting invention new commodity, new

mfrg process, new source, new out let for products, new industry)

Eg; Edward Harriman (reorganize rail road) and John Pierpont Morgan(developed banking house)


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Entrepreneur today

Behavior = Initiative + Organizing/ Reorganizing of social,economic mechanisms + acceptance of risk / failure

To an economists- E-r one who brings resources, To a

psychologist-one driven by forces, experiment ,accomplish . To a businessman 1. Er as threat, aggressivecompetitor, 2. an ally, source of supply, customer, wealthsource.

Er :Process of creating new with value by devoting time

and effort by financial , psychic and social risk, andreceiving the rewards of money, personal satisfaction

and freedom.


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Functions of Entrepreneur

1. Risk-taking *

2. Innovating *

3. Organizing*

4. Creating

5. Achieving

6. Technical skill

1. Risk Taking

Choice betweenalternatives

Risk, which cannot becalculated, is uncertainty

Speculation

Direction

2. Innovating

New product Innovation

New methods of production

New market New source of RM

New form of Organization


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Functions of Entrepreneur

1. Driving work force

2. .Communicating

3. . Decision Making

4. Business Planning

5. Visioning

6. Exploiting Opportunity

3. Organization

Planning of anenterprise

Co-ordination &control

Supervision


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Area Entrepreneur Manager

1. Status Owner , Own Investment & Business Employee directed by

Entrepreneur

2. Target Setting-up a Sole Trader / Firm / Company To give service

3. Decision

Making

All long term expansion, Pricing, merger,

diversification, etc by E-r

Only Short and medium

term results are made

4. Rectifications of

wrong decisions

Results in loss, No one to correct Can be corrected by E-r

5. Innovation Acts as Change Agent, does immeditly,

increases Production and Profit

Implements plan,

6. Risk bearing Can take any risk and Uncertainty Does not bear any riak.

7. Skills Creativity , Innovation Intuition and desirefor achievement etc, Relies on Public dealingabilities and conceptual

abilities

8. Qualification Foresightedness, Risk-taking, Hard work,

Creative Thinking etc,

To hold stipulated

qualification and to under

go Interview process


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Types of an Entrepreneur, Intrapreneur

1. E- r as per Types of

Business:

1. Business E-r

2. Trading E-r

3. 3 Industrial E-r

4. Corporate E-r

5. Agricultural E-r

2. E-r As Motivation

1. Induced E-r

3. Use of Technology

1. Technical E-r

2. Non-Technical E-r

3. Professional E-r

4. As per stage of Development

1st Gen E-r

2nd GEen E-r

3. Lassical E-r


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Types of an Entrepreneur

5. Classification givenbyDanhof

1. Innovating E-r

2. Imitative E-r

3. Fabian E-r4. Drone E-r

6. As per capital Ownership

1. Private E-r

2. State E-r

3. Joint E-r

7 As per Area

Urban / Rural

8. Gender and age

1. Man / Woman E-r

2. Young / Old E-r

3. Middle aged E-r

9. Scale

1. Large Scale Industry E-r

2. Medium Scale Industry E-r

3.Small Scale Industry E-r

4. Tiny Industry E-r10.1. Social E-r

2. Spiritual E-r

3. Event E-r

4. Knowledge E-r


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Intrapreneurship

Employees, who have entrepreneurial talent,empowered to take decisions, but not keen tostart their own business are known asIntrapreneurship.

Int-pr = Corporate E-r- Pinchot (1985)

E-activities of employees are explicitlysupported with in established Organization,empowered with resources, enabling them toaccomplish.

Failures of Intrapreneurs, are protected byCompany.


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Four elements of Intrapreneurship

Right environment

Work Force of enterprising people

Support System

Suitable reward systemDifficulties: Not easy to achieve effective Int-p

Fair remuneration and reward system is difficult to establish

If new ideas fail, employees may get disappointed

Like gardeners, they prune, clear out, plant by recruiting new

entrepreneurs, at the same time develop weeds, which are to be

spotted and looked after


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Intrapreneur

Word was coined in the late 1970s inn US

Top executives of big corporate, started leavingjobs, due to entrepreneurial urge/drive.

Success of such people, became a threat to

corporate they left. Gifford Pinchot devised a retention plan for such

people, giving full independence and autonomy, butwith in the Organization

Empowered to own decisions, new products, own

ideas to implement. Their entrepreneurial spark was kept alive, Industries

turn over ratio reduced.


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E-r Vs In-r

o 100% Independent person

o Liable to bear Loss/Profit

o Continuously raises to

increase Capital/Return

o No relation with any

Organization

Partially Independent

No loss, but some gain

Does not attempts to

raise capital

Interacts within the

Organization and some

times out side also.


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Tips to Successful E-r

1. All round knowledge

2. Be conservative

3. Dont expect quick return

4. To delegate5. Take moderate risk

6. Plan systematically

7. Time Management

8. Data on Competitors9. Anticipate problem/ Solve

10. Take expertise openion

11. Be a decision maker

12. Be Cost and Qualityconscious

13. Be committed, dedicated- answer to all Problems

14. Keep up delivery 100%

15 be bold and never give-up in difficulties


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Er Vs EspEr and Esp are used synonym, but they are different

Entrepreneur

Person

Creator

Decision maker

Initiator

Leader

Motivator

Risk taker

o Entrepreneurship

o Process

o Creation

o Decision Making

o Initiative

o Leadership

o Motivation

o Risk taking

E-r precedes Esp, it is development and coordination of E-r functions


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Evolution, Development of E-r

Esp Undertaking, Origin from western societies.

Esp -Meaning, shady

16th Century Army leaders

18th Century- Dealer, buys & sells Schumpeter(1961) Innovator

Recent years, Esp is recognized by all over world(US,German, Japan and India)

Indian definition: One who undertakes to Organize,own and runs a business- is accepted by Nationalseminar on Entrepreneurship- 1975New Delhi


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Sociologists Psychologists Economics

Social factors

Cast

Family

Social Status

Personality Traits

Need for

achievement

Affiliation & Power

Risk taking

Decision Making

Creativity

Leadership

Economic Factors

Occupational

background

Access to Capital

Business & Technical

experience

Eps is viewed @ different view points


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Experts opinion on E-r & Esp

Doing things in a new and better way

Decision making under uncertainty

Need for influencing others( need for power)

Creative and Innovative activity

Neither an Art nor Science Practice & Knowledge

E-r is investing and risking of time money and efforts

Social decision making by economic innovators

1.Percepttion of Opportunity 2. Organizing an Industrialunit 3. Running profitable, going and growing concern


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Er Culture

1. Increase the awareness of E-rial Attitudes andCulture?

2. Intensify the E-r Education and awareness

Campaigns3. Create Role models and Champions

4. Establish Mentor and Patron panels.

5. Incentive and Support for Business Succession.6. Create Incentives of SMEs to take apprentices

7. Enhance Intrpreneurship


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Stages of Entrepreneurship Process

1) Identifying opportunities

2) Establish Vision

3) Persuade Others ( Communicate)

4) Gather Resources

1) Finance

2) HR

3) Knowledge5) Create new Venture

6) Change / Adapt with time

e d mod 1 introduction

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