enterpreneurship development.docx

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    Entrepreneur plays a vital role in the economic

    development of a country. He generates employment,

    income, production and contributes towards the

    overall development of economy.

    It is an initiative, dedication, skill, tolerance,

    confidence, courage, enthusiasm, sense of

    responsibility, honesty which makes one a successful


    Definition Of Entrepreneur:

    The Oxford Advanced Learners Dictionary defines

    entrepreneur as a person who makes money by

    starting or running businesses, especially when this

    involves taking financial risks.

    J.E.Stepanek states regarding entrepreneur, it is a

    person who has capacity to take risk, ability to

    organize and desire to diversify and make innovations

    in the enterprise.

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    Higgines writes, an entrepreneur is a person who

    performs the function of seeing investment and

    production opportunity, undertakes a new productionprocess, raising capital,hiring labour, arranging the

    supply of raw materials, finding site, introducing a

    new technique and commodities, discovering new

    sources of raw materials and selecting top managers

    for day to day operation of entrepreneur.


    Concept: Entrepreneurship means degree of

    intelligence to run a business. It means application of

    ones ability, experience, innovations, intelligence,

    initiative creativity in order to prove oneself a

    successful entrepreneur.

    Definition: Benjamin Higgins defines

    entrepreneurship as Entrepreneurship means the

    function of foreseeing investment and production

    opportunity, organizing an enterprise to undertake a

    new production process, raising capital, hiring labour,

    arranging for the supply of raw materials and

    selecting top managers for the day to day operations

    of the entreprise.

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    Entrepreneur and Entrepreneurship (Difference)

    Entrepreneurship & entrepreneur are interchangeably

    used. They are different.

    Entrepreneur Entrepreneurship

    Innovator Innovation

    Initiator Initiative

    Creator Creation

    Risk Taker Risk Taking

    Motivator Motivation

    Leader Leadership

    Organiser Organisation

    Programmer Action

    Visualiser Vision

    Decision taker Decision taking

    Manager Management

    The above comparison reveals that entrepreneur

    refers to a person and entrepreneurship refers to

    a process. Entrepreneurship refers to the

    functions of creating something new, organizing

    and coordinating and undertaking risk and

    handling economic uncertainty.

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    Various definitions of entrepreneur/entrepreneurship

    refers to the role of an entrepreneur.Schempeterrefers to innovation as a role of entrepreneur

    others as Cantillou, JB Say and others say that risk

    bearing is the main role of an entrepreneur.

    Modern view is that an entrepreneur has to

    perform many functions-planning, decisionmaking, risk-taking, innovation, achieving

    skill,organizing, motivating, leading and

    managing overall affairs of the organization.

    Role of Entrepreneur in Economic Development:

    An Entrepreneur occupies an important place in the

    whole process of economic development. Anentrepreneur identifies an opportunity, makes

    investment, invests all efforts to get rewards out

    of it which ultimately lead to improvement of


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    The entrepreneur is the innovating individual who

    introduces something new in the economy, a new

    method of production not yet tested byexperience in the branch of manufacturing

    concern, a production with which consumers are

    not yet familiar, a new market not yet exploited.

    It means an entrepreneur does something new,

    something unique.


    1.Innovating Entrepreneurs2.Adaptive or Immitative Entrepreneurs3.Drone Entrepreneurs4.Fabian Entrepreneurs

    1.Innovating Entrepreneurs: Innovation is themost important function which speaks of the

    quality of entrepreneueship. Innovation means

    to create something new. Innovation means

    implementation of invention in the production

    process. An entrepreneur who happens to be in

    search of introducing something new in order

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    to ensure the survival in the age of competition

    is called Innovating Entrepreneur. These

    types of entrepreneurs are very much helpfulfor their country because they bring about a

    renovation in lifestyle.

    2.Adaptive or Immitative Entrepreneurs:Immitative entrepreneurs are those who follow

    the policy of wait and watch. They observe the

    results of innovations already launched by the

    innovative entrepreneurs.On observing the

    positive results implement the same in their

    enterprises. These types of entrepreneurs are

    found in developing countries. Immitative

    entrepreneurs have the capability to know and

    apply the principles of successful innovations.

    These entrepreneurs are very much helpful in

    less developed countries as they contribute

    significantly in the growth of enterprise and

    entrepreneurial culture in these countries. Alsothey generate ample employment avenues for

    countries and therefore they are treated as the

    agent of the economic development.

    3.Drone Entrepreneurs: These are theentrepreneurs who are not ready to respond to

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    changes. They feel comfortable with their old

    fashioned technology of production. As a

    result, they suffer losses. So, they dontcontribute towards the economy of a nation.

    4.Fabian Entrepreneurs: These entrepreneurs arevery much sceptical in their approach in

    adopting or innovating new technology in their

    enterprise. They are not adaptable to the

    changing environment. They love to remain in

    the existing business with age old techniques

    of production. They only adapt to new

    technologies when they feel it is necessary

    otherwise our business will collapse.


    The qualities of a good entrepreneur.

    1. Are you a good decision taker: The ability tomake good decisions is the key to be asuccessful entrepreneur. Entrepreneurs of

    most profit-making organizations are always

    faced with a wide range of important

    decisions in the areas of pricing, product

    choice, cost control, capital investment and

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    so on. Entrepreneurs decide such matters as

    what goals, opportunities they will pursue,

    what resources they will use and so on. Howgood their decisions are will determine the

    quality of an entrepreneur.

    2. Are you a real guide: Entrepreneur shouldhave the quality of guiding others. He should

    be in a position to issue right instructions to

    the right persons on right time.An

    entrepreneur should possess a quality to

    teach his workers and guide them

    3. Are you emotionally stable: An entrepreneurshould not be moved by emotions or

    sentiments. He should analyse the problem

    rationally and take a decision without bias.

    He should not have short temper.

    4. Are you sociable: A sociable entrepreneurcan easily mingle with workers. Workers

    should be encouraged to discuss theirproblems and difficulties. Entrepreneur

    should give patient hearing to them.

    5. Have you mental vigour: An entrepreneurshould be mentally strong. He should have a

    capacity to work for long hours than others.

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    6. Using feed back: An entrepreneur should bein a position to assess the impacts of

    decisions. Observation of the effects ofactivities/decisions is called feed back.

    Personal likes/dislikes are to be ignored.

    7. Are you realistic: An entrepreneur should notbe emotional in nature. Personal likes and

    dislikes should not be counted while reaching

    the factual position.

    8. Do you have desire to be a winner: It meansthat one should invest all efforts to turn the

    dreams into reality, to adjust in changing


    9. Do you have quality of stick to: One shouldbe in position to fight against all difficulties,

    problems, challenges that may arise from

    time to time. One should not get


    10. Are you risk-taker: An entrepreneur is a risk-taker, not a gambler. All the decisions being

    taken by an entrepreneur are supposed to be

    sound & justified & not blind.

    11. Have you ability to find and exploreopportunity: Conditions are changing fast

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    especially under the slogan of free trade.

    What is fit today may be misfit tomorrow.

    Therefore, an entrepreneur has to be insearch of new & new opportunities, finding

    new opportunities is a continuous process. It

    means that an entrepreneur should be

    research minded, knowledgeable,


    12. Have you technical knowledge about the job:An entrepreneur to be successful should

    possess a thorough knowledge of the unit.

    Besides, he should know the current

    development along with technical knowledge

    & expected future changes.

    13. Are you a motivator: An entrepreneur shouldknow the motivation techniques & how to

    use them. He should have the qualities to

    influence his employees & people.


    Functions of an entrepreneur include all activities

    being performed from the stage of generation of idea

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    till the implementation of the same. The basic

    function of entrepreneur is to search for an

    appropriate business idea having good investmentopportunities. It is complicated function in the sense

    that an entrepreneur comes across many investment

    opportunities. To choose the best one requires

    ingenuity, skill, foresight. He has to perform many

    other functions viz. Planning, decision-making, risk-

    taking, innovation, organizing, motivating, leading &

    managing overall affairs of the enterprise.

    Arthur H. Cole lists the functions of an entrepreneur

    as under:

    1.Generation of ideas.

    2.Determination of objectives & change of objectives

    as required from time to time.

    3.Securing of adequate financial resources.

    4.The requisition of efficient technological

    equipment & adoption of changes in technology.

    5.To develop market for the products.

    6.To maintain good relations with authorities & with

    society at large.

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    The functions of an entrepreneur can be classified in

    brief, as under:

    1.Decision-making2.Planning3.Organising4.Financing5.Marketing6.Innovating7.Risk-taking8.Researching9.Managing overall affairs of the concern.


    1.Technical Skill: An entrepreneur should havecomplete knowledge about the processes

    involved in the production of goods/services. He

    should have complete knowledge about the

    technology being used in the unit.This skill is of

    great importance at the supervisory level.

    2.Managerial Skill: An entrepreneur should havemanagerial skill in order to get the things done

    effectively. He should have motivational skill in

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    order to develop interest & team spirit among

    employees. All qualities of leadership should be

    possessed by him in order to create a conduciveenvironment in which people feel secure &

    motivated. Managerial skill also includes the

    knowledge about the laws governing the unit,

    decision taking capacity, planning, coordinating &

    controlling efficiency. This skill is helpful in

    frequent interactions with subordinates.

    3.Drawing Skills: An entrepreneur is also adesigner. He should have skill to decide how

    things being manufactured in the unit such as

    shoes, clothes etc. will look or work by making

    drawings, plans or patterns. He should not only

    identify the problem but should have a skill to

    give practical solution to problem.

    4.Conceptual Skill: This skill relates to frameworkwithin which needs are assessed & accordingly

    plans are reframed to satisfy the needs.Therefore, an entrepreneur should have ability to

    understand the significant element in the

    situation.He should have ability to predict the

    expected changes in the situation & take steps on

    appropriate time to welcome & adjust under

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    those changes with all success.This all requires

    experience, exposure, wits & full information

    about the environment entrepreneur is workingin.


    It is the environment prevailing in the country that

    encourages or discourages the entrepreneurs.

    Environmental Factors

    Economic Social Cultural Personality Institutional External

    Factors Factors Factors Factors Factors Factors

    Economic Factors: The economic factors that affect

    the growth of entrepreneurship are:

    (a) Capital formation(b) Infrastructural facilities(c) Great risks(d) Non-availability of labour & skills(a) Capital Formation: Capital Formation is

    considered as an important factor in the

    economic development of a country. Capital

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    formation can accelerate the pace of

    development through fuller utilization of

    available resources. Entrepreneurs require tostore large stock of inventories to provide

    adequate industrial supplies.

    (b) Infrastructural Facilities: The infrastructuralfacilities like communication,transport, power,

    irrigation facilities, technical & economic

    information etc.also affects the growth of


    (c) Great Risks: Risks in business are greater in aless developed country than in a developed

    nation. Three reasons are related to this


    (i) There is the lack of reliable information oncost, size of the market, conditions of

    demand etc.

    (ii) The market for goods & services is small.(iii) The entrepreneurs are faced with situations

    where the capacity of their plant & the size

    of their investments are placed at the mercy

    of unforeseeable events.Entrepreneurs have

    a tendency to prefer short-term investments

    to long-term industrial ventures.

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    (d) Non-availability of labour & skills:Entrepreneurs, often find difficulty to securesufficient labour. They are forced to make

    elaborate & costly arrangements to recruit the

    necessary labour.When labour is not trained they

    lacks industrial skills. The traditional skills of the

    workmen, are highly insufficient for modern

    industrial jobs.

    2. Social Factors: Social factors can go a long way in

    encouraging entrepreneurship. In fact it was a highly

    helpful society that made the Industrial Revolution aglorious success in Europe. A society that is rational in

    decision-making would be favourable to

    entrepreneurial growth.

    3. Cultural Factors: Entrepreneurial growth requires

    proper motives like profit-making, acquisition ofprestige & attainment of social status. Ambitious &

    talented men would take risks & innovate if these

    motives are strong. The strength of these motives

    depends upon the culture of the society.

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    4. Personality Factors: This leads to the emergence of

    planning as means of achieving economic progress in

    which the state has to play a pivotal role.5. Psychological & Sociological Factors: Psychosocial

    theories of entrepreneurship stress the motives or

    goals of the entrepreneur.

    6.External Factors:

    (a) Industrial Estates: The programme of industrial

    estates was launched with a view to offer all facilities

    to entrepreneurs at one place. The land & other

    facilities are offered at subsidized rates in Industrial

    Estates. These estates have helped in creating

    employment opportunities, raising efficiency of the

    units. The modernized industrial estates can give

    boost to entrepreneurship.

    (b) Raw Materials: Abundant stock & regular supply of

    raw materials also affect the growth of

    entrepreneurship. The better arrangements for

    regular supply of raw materials, the more would be

    influence on entrepreneurial emergence.

    Establishment of raw material banks could prove

    motivational factors for potential entrepreneurs.

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    (c) Machinery on hire purchase: Replacement of

    outdated & installation of modern technology ensures

    the survival of unit & production with quality & lowcost. Arrangements made by the government for

    supply of modern technology on hire purchase basis

    can motivate technocrats & other potential

    entrepreneurs even from backward areas for the

    establishment of units & give a boost to


    (d) Attitude of large scale units: Encouragement from

    large scale units also contribute to the growth of

    entrepreneurship. Large business units can be the big

    buyers of SSI products & boost small scale


    (e) Political conditions/Government policy: Heavy

    stress on rapid industrialization, control on imports

    encourage exports, expansion in domestic demand.

    This also contribute to entrepreneurial growth.


    Women entrepreneurship may be defined as women

    with intelligence, initiatives, innovations, experience,

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    managerial efficiency, qualities of leadership, vision,

    skill, capability to take decisions, risk. According to

    the policy of Industries Reforms (1997), amended in1999, women entrepreneurs mean, A Small Scale

    Industrial Unit/Industry related service or business

    enterprise managed by one or more women

    entrepreneurs in proprietary concerns or where she/

    they individually or jointly have share capital of not

    less than 5 percent as

    partners/shareholders/directors of private limited

    company/members of cooperative society.


    Any woman or group of women which innovates,imitates or adapts an economic activity may be called

    woman entrepreneurship._________Frederick



    Involvement of women in the field of industries is a

    recent development. With the spread of education

    among females & increase in the number of women

    working outside homes especially in urban area, the

    thinking & role of women has altogether changed.

    The democratic nature of constitution & steps taken

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    in various five year plans for the empowerment of

    women contributed a lot towards the change in the

    position of women in India. Factors like politicalconsciousness, spread of formal & informal

    education, development in the field of transport,

    roads, communication, socio-cultural awakening

    created an environment where we see the women

    folk coming forward as industrialists,economists,

    politicians, social reformers, scientists, pilots,

    engineers etc. Efforts put in by the Government

    agencies to organise Entrepreneurial Development

    Programmes to develop awareness among women

    regarding the potentialities of various industries in

    the local area added a lot towards women

    entrepreneurship. As a result of these steps, we see

    the women coming forward for the establishment of

    industries on modern lines.


    Women entrepreneurs face many problems in their

    efforts to develop their enterprises.

    The main problems faced by the women

    entrepreneurs are as :

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    1.Shortage of finance: Women entrepreneursalways suffer from inadequate financial resources

    & working capital. The complicated procedure ofbank loans also create lot of problems in getting

    the required finance. Women entrepreneurs even

    face problems in getting requisite working capital

    for financing day-to-day business activities.

    Women entrepreneurs have to depend upon

    their personal savings & loans from family

    friends. Most of the women entrepreneurs fail

    due to lack of proper financing facilities, because

    finance is the life blood of every business activity.

    2.Marketing problems: Women entrepreneursoften depend upon the middlemen for marketing

    their products.They exploit the women

    entrepreneurs. Women entrepreneurs also find it

    difficult to study the market trend. A lot of

    money is needed for advertisement in these days

    of stiff competition from male entrepreneurs.Women entrepreneurs also lack energy & extra

    efforts needed to be invest & to win the

    confidence of customers & popularise the


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    3.Shortage of raw materials: The shortage ofrequired raw-materials is also one of the big

    problems faced by women entrepreneurs.Women entrepreneurs find it difficult to procure

    the required raw materials & other necessary

    inputs for production in sufficient quantity &


    4.Stiff competition: Women entrepreneurs have toface severe competition from organised

    industries & male entrepreneurs having vast

    experience in a globalised market.

    5.Limited managerial ability: Womenentrepreneurs may not be expert in each & every

    function of the enterprise. She will not be able to

    devote sufficient time for all types of activities.

    6.High cost of production: The high cost ofproduction is another problem which undermines

    the efficiency & restricts the development of

    women entrepreneurs. It is necessary to increaseefficiency, expand productive capacity to reduce

    the cost of production.

    7.Lack of entrepreneurial aptitude: One of thebiggest problems of women is the lack of

    entrepreneurial aptitude. They have no

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    entrepreneurial bent of mind. The basic

    characteristics of an entrepreneur such as

    innovation, risk bearing etc. are absent in awomen entrepreneur.

    8.Low risk-taking ability: Women entrepreneurssuffer from the problem of low risk taking ability

    as compared to their male counterparts.

    Inferiority complex, unplanned growth, lack of

    infrastructure,hesitationin taking quick decisions

    also increases the rate of risk & chances of loss.

    9.Family responsibilities: One of the main duty of awoman in India is to look after the children &

    other family members. A very little time & energy

    is left for business activities. A married woman

    entrepreneur has to make a perfect balance

    between domestic activities & business activities.

    The woman entrepreneur cannot succeed

    without the support & approval of husband. Their

    success in this regard also depend uponsupporting husband & family.

    10. Social attitudes: One of the biggest problemsof a woman entrepreneur is the social attitude in

    which she has to live & work. There is

    discrimination against women in India despite

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    constitutional equality. Women do not get equal

    treatment in a male-dominated Indian society &

    male ego puts barriers in their progress.11. Lack of education: The education level

    among women in India is very low. Majority of

    women are not aware about the technological

    developments, marketing knowledge etc. due to

    lack of education. Illiteracy further creates

    problems in setting up & smooth running of


    12. Lack of entrepreneurial training: Largenumber of women have no proper & sufficient

    technical & professional training to set-up a new


    13. Legal formalities: Women entrepreneurs findit extremely difficult in complying with various

    legal formalities in obtaining licences etc.

    14. Travelling: Women entrepreneurs cannottravel from one place to another as freely as mendo. Women have some peculiar problems like

    staying out in the nights at distant places etc.

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