final managerial process skills

7/31/2019 Final Managerial Process Skills

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Any individual has three career options:

To work for someone else

To be self employed in a profession

To be an entrepreneur.


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As today, his two and a half year old start up-CashUrDrive is not only Indias first On-Wheel

Advertising Company but also adorns a longstanding brigade of clients in its kitty including:

Adidas, Lays, Subway, Coca Cola, Levis, PizzaHut, Pepsi, Reliance Mutual Fund, RelianceCommunication, Reliance Net Connect, Tata

Indicom, Tata DoCoMo and NACO(NationalAIDS Control Organization).


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An engineer from Indian Institute of Technology,Guwahati, Raghu, unlike many buddingentrepreneurs had never earmarked a plan onpapers to start up his own venture.

In fact the story behind his move is quiteinteresting. As Raghu fondly, recollects The funnyslogan behind trucks and vinyl stickers on police

jeeps caught my attention as I couldnt take my

eyes off it. And then came the idea to charge advertisers to

put their messages on privately owned vehiclesand thus I started my website.

Little wonder, what Raghu might tag off as a


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Gifted at creating business concepts that isunique his brainwave-CASH UR DRIVE isdiscovered by chance.

But the thing that has worked wonders for him isthat CashUrDrive generates a typical Win-winsituation for all three- Advertiser, car owner andthe agency itself.

As it not only gives the advertiser the complete

package to target the Indian demographics butalso caters as a perfect solution for rising fuel costand inflation rates in India for the car owners

Also, CASHurDRIVE promotes eco friendly

methods of advertising.


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Raghu is in his full gears. As he avers, I amtrying hard to create a niche in this new andexciting industry. His agency has launched a hostof value-added services for its customers.

Right from joining hands with HPCL/BPCL forproviding fuel coupons to the car owners, to avehicle tracking system for its clients, acentralized printing of stickers in Bangalore he is

leaving no stone unturned to make this conceptpopular.

The reason for his aggressive push also stemsfrom the increasing competition from radio taxis

and buses using the same mode of advertisementin the countr . .


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However, an eternal optimist Raghu is all qualmsand is bull headed towards his goal.

So much so, that his team members also sufferfrom one common syndrome namely- BSD.Wondering, what on earth it stands for?

Well like Raghu they are B-Brilliant, S-Smart andD- Desperate to make things work!

This man surely knows how to transform yourfuel-guzzling car into a revenue earner for sure.


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In simple terms we use the termentrepreneur to describe men and womenwho set up and manage their own

business.

The process involved in this is calledEntrepreneurship.

The output of this process is establishmentof Enterprise.


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ENTREPRENEUR ENTREPRENEURSHIP ENTERPRISE

PERSON PROCESS OBJECT


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13th Century :

The earliest definition found was from the13th century, where we learn the word?

Root.The origin of the English word

entrepreneur comes from the French wordentreprendre, which can be translated tomean ?

To do something?

or

To undertake?


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16th Century:

In the 16th century, there was a firstmention of the word business .

Therefore, we find entrepreneur defined assomeone who undertakes a business

venture?


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17th Century:Entrepreneurship asRisk Bearing

The first academic usage ofthe term was by economistRichard Cantillon in 1730.

For Cantillion, The bearing

of risk ? Engaging in business

without an assurance of theprofits that will be derived ?

is the distinguishing feature ofan entrepreneur.


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The role of the entrepreneur is one of Cantillon'sgreat contributions to economic understanding.

He speaks of the entrepreneur in the classicsense of the undertaker of great businessadventures, but Cantillon also has a theoreticaldistinction between those who work for a fixedreturn or wages and those who face uncertainreturns.

This includes farmers. These entrepreneurspurchase inputs at a given price to produce andsell later at an uncertain price.

In the pursuit of profit, the entrepreneur must

bear risks as he faces and also the uncertainty of


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The price of these products willdepend partly on the weather,partly on demand;

Example if corn is abundantrelative to consumption it willbe dirt cheap, if there is scarcity

it will be dear. Who can foresee the number of

births and deaths of the peoplein a State in the course of theyear?

Who can foresee the increaseor reduction of expense thatmay come about in thefamilies?

And yet the price of theFarmer's products depends

naturally upon theseunforeseen circumstances, and


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Entrepreneurship as Uncertainty Bearing:

Frank knights describes entrepreneur as thebearer of uncertainty.

Uncertainty is defined as a risk which cannotbe insured and is incalculable.

He thus draws a distinction between ordinaryrisk and uncertainty.

He describes entrepreneur as a recipient ofpure profits.

Pure profits with regard to entrepreneurship isbearing the cost of uncertainty.


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Risk

Ambiguity

True Uncertainty or Knightian

Uncertainty


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18th Century: Entrepreneurship as

CoordinationJean Baptiste Say associates

entrepreneur with the functions oforganising, coordinating and supervising.

Say broadened the definition ofentrepreneur to include the concept of

combining factors of production.


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Entrepreneur

Capital

Land

Labour


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Production of the Product

Phase 2

Sells the product in the market

Phase 3


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Rent PersonA

Interest PersonB

Wages PersonC


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Joseph Schumpeter (1934): In Schumpetersview an entrepreneur is a person who is willingand able to convert a new idea or invention into asuccessful innovation.

Schumpeter added the concept of innovation tothe theory of entrepreneurship.

For Schumpeter the entrepreneur is the bearerofthe mechanism forchange.

Entrepreneurship is defined as carrying out ofnew combinations we call "enterprise;theindividuals whose function is to carry them outare called entrepreneurs.


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For Schumpeter, entrepreneurship resulted in newproducts.

Schumpeter's initial example of this was thecombination of a steam engine and then current

wagon making technologies to produce thehorseless carriage.

It did not immediately replace the horse drawncarriage, but in time, incremental improvements

which reduced the cost and improved thetechnology led to the complete practicalreplacement of beast drawn vehicles in moderntransportation.


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The entrepreneur is the innovator who implements changewithin markets through carrying out new combinations.

The carrying out of new combinations can take several forms:

1) The introduction of a new product2) The introduction of a new method of production.3) The opening of a new market (Foreign markets for Ayurvedicproducts)

4) The conquest of a new source of supply of raw materials or

parts,5) The carrying out of the some new organization of any industry.

Schumpeter equated entrepreneurship with the concept ofinnovation applied to a business context.


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In India, where two-wheelers represent the mostcommon transportation means, Tata Motors sawthe need to come up with a safer kind oftransportation.

In addition to this safety issue, personal transportis also problematic because of the rare availabilityof public transportation .

Therefore, Tata Motors introduced the Peoples

Car, called the Nano. This disruptive productinnovation will surely have significant effects on

the small-car segment.


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Casson had 5 arguments for the entrepreneur:

Entrepreneurship appears as a personal qualitywhich enables certain individuals to makedecisions with far reaching consequences.

The entrepreneur has better or at least morerelevant information than others.

It is assumed that entrepreneurs are motivated byself interest.

The entrepreneur believes that he is right whileothers are wrong.

The entrepreneur often has to create an institutionto make markets between himself and othertransactors.


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He defined entrepreneurship as therelentless pursuit ofopportunity

Moreover he believed in an underlyingprocess in entrepreneurship that starts withidentification of opportunity and ends withharvesting the fruits ofones labours.


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Gartner (1988); The creation of new organizations.

The Entrepreneurship Center at Miami University ofOhio has an interesting definition of entrepreneurship:

"Entrepreneurship is the process of identifying,developing, and bringing a vision to life. The visionmay be an innovative idea, an opportunity, or simply abetter way to do something. The end result of thisprocess is the creation of a new venture, formed underconditions of risk and considerable uncertainty."


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The entrepreneurial process as involving all

functions, activities, and actions associatedwith the perceiving of opportunities andcreation of organizations to pursue them.


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John Stuart Mill describes the entrepreneur assomeone who assumes not only the risk of abusiness venture (as a capitalist) but also themanagement of the business venture.

It is this addition of a managementcomponent that emphasizes the importance

of entrepreneurship by tying the resourcecomponent (from Say) and managementcomponent (from Mill) together.


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Entrepreneurship is the process of starting,establishing and expanding an enterprise thatproduces and markets goods or services.

It is an act performed by an entrepreneurwhere in he or she tries to find opportunitiesand then derives benefits from them.

Entrepreneurship is the process by which

knowledge is converted in to products andservices.

In other words entrepreneurship is a processby which opportunities to create future goods

and services are discovered evaluated and


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The term entrepreneurship refers to the functionsperformed by an entrepreneur. It is the processinvolving various actions to be undertaken by theentrepreneur in establishing a new enterprise.In fact, what an entrepreneur does is regarded as

entrepreneurship. Thus entrepreneurship can beviewed as a function of: (1) identifying and using the opportunities that exist in

the market; (2)converting the ideas into action;

(3)undertaking promotional activities to launch anenterprise; (4) striving for excellence in his/her field of work; (5) bearing the risk and uncertainties involved, and (6) Harmonizing


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Process of creating something new

and assuming the risk and reward.-Robert D Hisrich


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An entrepreneur is an individual who acceptsfinancial risks and undertakes new businessventure.

The word derives from the French "entre" (toenter) and "prendre" (to take), and in ageneral sense applies to any person starting a

new project or trying a new opportunity.


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It provides numerousopportunities for growth andself development.

Monetary rewards are more

An entrepreneur has thepower of decision making

Rewards of working onones own are immenselysatisfying.

It provides numerousopportunities for selfexpression and realization

of ones passion for doingsomething new anddifferent.


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The entrepreneur alsocontributes to thedevelopment of communityas he/she generatesemployment for others.

Entrepreneurs initiate and

constitute change instructure of business andsociety.

In India whereunemployment hasbecome a general problem

entrepreneurship can beeyed as a tool for incomegeneration andemployment.


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Identification and evaluation ofopportunity.

Development of business plan.

Determination of required resources.

Establishment and Management ofthe resulting enterprise.


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IDENTIFY AN

OPPORTUNITY

ESTABLISH

Vision

PERSUADEOTHERS

GATHER

RESOURCES

CREATE NEWVENTURE PRODUCT

OR MARKET

CHANGE/ADAPT

WITH TIME


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Creativity

Innovation

Dynamism

Leadership Teambuilding

Need for Achievement

Problem Solving

Goal Orientation

Risk taking and decision making ability

Commitment


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Time Management

Problem solving

Flexibility

Vision Self motivation

Persistence

Technical Knowledge


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Capital

Labor

Raw Material

Economic

Barriers

SocialPersonalNonEconomic

Barriers


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Social

Norms

Practical

Values

Emotional

Blocks


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Lack ofsustained

motivation

Unclear orambiguous

ideas

Lack ofvision and

clearperception


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Uncertainty of income

Risk of losing your entire investment

Long hours and hard work

Lower quality of life until the business getsestablished.

High levels of stress

Complete responsibility

Discouragement


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EDUCATION, TRAINING &

EXPERIENCEFamily & Other Support Financial Conditions

Background Factors

Need for

Achievement

Motivational Factors

Business

Personal

Rewards

Recognition Social Status

Government

Policies

Financial

Assistance

Factors of

productionSupport AGENCIES

Economic Factors


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Group 1: A business needed desperately inyour town

Group 2: A business that involves exports to

another country.Group3: A home based business

Group4:A business that can be started at

$ 1000.

Group5 : A franchise model that you willdevelop and offer nationally

final managerial process skills

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