ENTREPRENEURSHIP

CIA-3
November 16, 2015

Submitted To
Amit Gupta
Associate Professor

Submitted By:
Sayon Das
1421328
Fin-2 (LMN)

TABLE OF CONTENT

Topics

Page No.

Introduction

Literature Review

4-5

Critical Analysis

6-7

Conclusion

Bibliography

List of Table
Indian Start-ups Data

INTRODUCTION

The start-up environment in India has become dynamic and fast growing due to the advent of the
technological revolution. This has led to the growth and opportunities in the country exceed the risks
and obstacles. India ranks the 3rd highest among number of start-ups with 4200 in India which has led
to tremendous increase in number of angel investors and venture capitalists which is primarily due to
diversification of risks, growth of industries, workforce and high returns.
The IT revolution has led to growth of the Indian start-up story which is fuelled by internet
penetration in urban and rural areas, smartphones and literacy level. Technology is being adopted by
many start-ups as it increases efficiency of marketing, operations etc. New start-ups face many
challenges to sustain their business such as financing, absence of any past record of financial or
operational performance, employee turnover and acceptability of the product or service by the
customers. Also presence of legal regulation and bureaucracy poses a significant hurdle in the Indian
context. In the recent past e-commerce based companies have grown to large extent which drives the
growth of the start-up story and is expected to reach a market share of $11 billion by end of this year.
Various examples of start-up based on ecommerce are flipkart which has turned out to be of the most
successful start-up, Ola cabs which captured 80+% of market share, snapdeal, paytm, big basket,
practo which has attracted billions of dollars of foreign investment and also entry of foreign
companies in India as it has opened a huge untapped market space.
Factors which have supported growth of Indian

are investment in IT sector, growth of

telecommunications, FDI inflows in Indian private sector, Government initiatives such as Make in
India, mobile and internet penetration in India increase in domestic demand of goods, services as
pharma, FMCG etc. and changing demographics and lifestyle.
The financial resource hurdle in the start-up environment is huge as 750 out of 900 companies, as
evaluating credit risk is difficult without historical record of performance. Also human resource is
also a huge hurdle as recruitment and selection for best man force is important.

Literature Review of Research Article

How Entrepreneurs Use Symbolic Management to Acquire Resources

Entrepreneurship is about characteristics and qualities of individuals and teams which help to
make a start-up idea successful. According to the study conducted entrepreneurship is about
symbolic management which result in acquiring of resources. The symbolic actions which are
identified during the study are personal credibility, professional organising, organisational
achievement and quality of stakeholder relationship.
The data through the conducted study has shown that various symbolic characteristics help to
acquire greater resources. Thus, the relationship between symbolic management and
acquisition of resources has been hypothesised in the research.
There are various resources which a start-up has to acquire in order to sustain and grow and
1.
2.
3.
4.

build an entrepreneurial company i.e.

Investors
Employees
Associates
Customers

It was seen in the study that the entrepreneur with low resource ventures used more skills and
symbolic management as compared to high resource businesses. The start-up with less resource
acquisition ventures used a greater analytical approach. The ability and skilfulness of the
entrepreneur depends upon the following action of quality which they display during their business
such as
Reflexivity: How reflex is the ability of the entrepreneur to identify and adapt to the external
environment.
Enactment: The process of passing fundamental changes in the business.
Customization: The ability to customize the product according needs of the customers.
Complementarity: How can the entrepreneur complement his product through additional services?

Since a new start-up involves high uncertainty and various risks associated with the
entrepreneurship process and absence of any historical track record of performance it is hard
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to setup and sustain the business in the introductory stage. Entrepreneurial bricolage process
face difficulty in recombine resources thus needs external shareholders.
The institutional theory says that social beliefs and credible activity for the society improves
the ability to acquire resources. Since the external environment is volatile and uncertain,
before a product is developed and marketed perception of the credibility of a perspective of
the company.
Thus, characteristics of entrepreneur should be intended by symbolic action such as
professional structures and processes. The acquisition of resources is employees, capital and
customers. This evaluation involves attracting and retaining employees, shareholders and
attracting external capital and development the customer base. Thus, symbolic management
enhances probability of acquiring resources. The article states that entrepreneurs in resource
acquisition ventures (CLAIM, Market, MOBILE, WIND) performed symbolic actions with
lesser integrity than firms which high acquisition like travel and wire.
Example for Enactment would be ensuring that in order for resource allocation the tangibility
of the organisational structures should be existing in all spheres such as websites, physical
infrastructure, dress code for employees etc.
Thus, symbolic management such as MBA degree of an entrepreneur would show that an
individual has a level of intellect and has the ability to think out of the box, create a new idea
and possess the capability to allocate resources. This would increase the confidence of the
investor if the start-up is going for investors and venture capitalist. This would enable the
entrepreneur would portray himself as a competent expert in various fields as technical,
managerial and financial. This would help in recruiting of professionals in the organisation
and hiring staff and servicing customers.
Capability of the entrepreneur in maintaining relationship with high profile customers and
shareholders is very crucial for survival of the organisation. During the study it was seen that
inability to market and publicise the company and maintain relationship would decrease the
demand due to its inability to stimulate its customers to deal in its platform.
Also skill sets and ability to deal with cognitive and socio political strategies by manipulating
and creating them are required to allocate and acquire resources.

Thus this article summarises that the study conducted by researches on entrepreneurs states
challenges of acquiring resources for emerging firms and how they would overcome.
Critical Analysis

There are various challenges faced by the entrepreneur and start-up. Company has problem in
managerial depth in case of breakneck growth in case of flipkart which raised an amount of

1.9 billion and has a valuation of $15 billion.

The start-up bubble in India is being created by the venture capital and foreign investment
which provides cash flow and ensures availability of cash but since the return on investment
and profitability of the start-up is in question due to uncertainty. But the inherent weakness of
the environment which is lack of human resource i.e. top quality management talent, training
infrastructures it is difficult to sustain such as TinyOwl which had to close number of

operations due to unchartered growth and its inability to manage financials.

Lack of adequate managerial talent for its resources leads to conflict of interest between

investors, entrepreneurs, founders and employees and regulators.

Entrepreneur are symbol of self-success as most of them according to study conducted are
from middle class families without any prior wealth, political connections or inheritance.
Thus, various uncertain external factors has to be faced are red tapism, lack of financing from
financial institutions,

The entrepreneur should

think from a, long term perspective of business with sustainability of business in mind.
Building a business which retain the entrepreneurial spirit and developing the idea or the
product until it surpasses customer expectation and form a disruptive space in the market to
create differentiation.

An entrepreneur should have a profit oriented strategy and plan with a clearly defined goal
which is aligned with the business. An entrepreneur should never lose focus from its

customers and use pre-defined standards of quality and time defined objectives.
An entrepreneur prime trait is confidence that is self-awareness, exploratory and imaginative
who plans strategies visualises mission and vision and prepares contingencies and works

towards constructive feedback.

Entrepreneur trait which differentiates from other businesses is creative thinking, quick
learning from past mistakes, ability to think out of the box and balancing future and present

metrics and learns from his failures.

Ability to delegate authority and responsibility, collaborate and recognise ability of its

subordinates and map entire process and allow employees to give constructive feedback.
One of the key elements which make a start-up successful is anticipating uncertainty and
calculating the risk associated with their product and making strategies in accordance with

the return vs. risk.

Start-up thrives on relationship building with all stakeholders such as customers, creditors,
suppliers. Thus, an entrepreneur should be communicator, speaks with confidence, is a
manipulator and is full of enthusiasm. Help of various promoting techniques, advertisement

models, and multimedia techniques are used to promote and create space in the market.
The most important trait of an entrepreneur is risk taking ability i.e. his ability to take

incremental risk, mapping hypothetical scenarios and calculate risk systematically.

Managing time effectively is crucial to distinguish between important tasks and tasks which
can be outsourced or delegated. Visualizing goals and success and mapping this in order to

mitigate risk and reap returns.

Perseverance is the key to face challenges and setbacks of resource crunch. Self-discipline is

required in a work environment and various difficult situations.

Competitiveness is the soul of a start-up as it drives the company to achieve and move
beyond its existing goal and studying various patterns of strategies of competitors is an art
which entrepreneur has to possess.

CONCLUSION
Enterprises are created to earn profit and all business has to satisfy all stakeholders. The equation has
to be the created by the entrepreneur for risk and return. People who start a start-up without proper
knowledge, market data, entrepreneurial ability and spirit tend to lose. Thus, entrepreneur must pose
the key traits which makes an entrepreneur successful and helps him/her to acquire resources in time
of scarcity.
7

Solving the resource puzzle is key to come out of the foetus stage and grow ones start-up into a
thriving company which can be sustained for long term. Aspects which make winning combination
of an entrepreneur are cognitive skills, risk taking ability, perseverance, analytical skills and
leadership.
The in order to allocate resources such as manpower, capital and financial an entrepreneur must
poses the above traits and qualities in order to help the business grow to new heights.

BIBLIOGRAPHY

Christoph Zott (2006, January 06). How Entrepreneurs use Symbolic Management to
Acquire Resources? http://www.jstor.org/stable/20109903
http://economictimes.indiatimes.com/small-biz/startups/startup-india-initiative-punditslike-nikesh-arora-kunal-bahl-helping-modi-government-to-craft-newpolicy/articleshow/49574103.cms
http://www.entrepreneur.com/article/234583
http://www.entrepreneur.com/article/231620
http://www.entrepreneur.com/article/231620
http://blogs.wsj.com/indiarealtime/2015/11/09/indias-talent-shortage-is-driving-upstartup-salaries/
http://www.businesstoday.in/cooleststartups/2015/