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TERM PAPER
ON
Supervised by Submitted by
Supervised by Submitted by
Head, DMS J.N.V.University, Jodhpur under whose guidance I have had privilege of
doing this dissertation work. She took an active interest in my work and had an
encouraging influence over me. She has been a ladder of inspiration with the concrete
support and strength without whom the term paper would not have been completed.
Miss.Swati Surana
M.B.A (SEM-4th)
Table of Content
1) Introduction
2) Concept of Entrepreneurship
3) Resource Managed by Entrepreneur
4) Constraints faced by a Business
5) Land as resource managed by Entrepreneur
6) Innovation and Entrepreneurship
7) Capital management
8) Demand and supply management
9) Managing Labour
10) Knowledge Management
11) Conclusion
12) Bibliography
Introduction
Your time is limited, so dont waste it living someone
elses life. Dont be trapped by dogma - which is living
with the results of other peoples thinking. Dont let the
noise of others opinions drown out your own inner voice.
And most important, have the courage to follow your heart
and intuition. They somehow already know what you truly
want to become. Everything else is secondary.
Steve Jobs, co-founder of
Apple and Pixar
One question weve all been asked is What do you want to be when you grow up?
Many times, our answer to this question involves positions or careers in which we
work for other people. Have you ever considered a career in which you are your own
boss? This kind of career is known as entrepreneurship. An entrepreneur organizes
and runs a business that is appealing to his or her own interests and abilities. Because
we live in a free enterprise system, or free market system, in the India, we as
individuals can establish our own businesses and compete in the market economy.
Entrepreneurship, the word has 3 components:
Entre: Enter;
Pre: Before;
Neur: Nerve
Center
Size does not
guarantee survival in
business. Even large
firms can disappear or
get eaten up by other
firms. Millions of small
firms close down each
year. It is the spirit of
entrepreneur which
keeps the business
The Concept of Entrepreneurship
Entrepreneurship is a process undertaken by an entrepreneur to augment his business
interests. It is an exercise involving innovation and creativity that leads towards
establishing his/her enterprise. One of the qualities of entrepreneurship is the ability to
discover an investment opportunity and to organise an enterprise, thereby contributing
to real economic growth. It involves taking of risks and making the necessary
investments under conditions of uncertainty and innovating, planning, and taking
decisions so as to increase production in agriculture, business, industry etc.
Entrepreneurship is a composite skill, the resultant of a mix of many qualities and
traits these include tangible factors as imagination, readiness to take risks, ability to
bring together and put to use other factors of production capital, labour, land, as also
intangible factors such as the ability to mobilise scientific and technological advances.
Entrepreneurship lies more in the ability to minimise the use of resources and to put
them to_ maximum advantage. Without an awareness of quality and desire for
excellence, consumer acceptance cannot be achieved and sustained. Above all,
entrepreneurship today is the product of teamwork and the ability to create, build and
work as a team. The entrepreneur is the maestro of the business orchestra, wielding
his baton to which the band is played.
Enterprise
Entrepreneur Entrepreneurship
Definition of entrepreneurship
The entrepreneur shifts economic resources out of an area of lower and into an area
of higher productivity and greater yield.
The entrepreneur always searches for change, responds to it, and exploits it as an
opportunity.
Who is an Entrepreneur?
You can assess your business skills by evaluating past jobs, volunteer work, positions
in organizations, and personal traits. Consider your experiences and qualifications
under each of the following headings.
3. Selling ideas and products: determining sales quotas and projections; presenting
projects for committees, organizations and/or administrative groups; direct selling to
customers or clientele; handling criticism and rejection.
6. Ability to take risks: taking moderate, calculated risks in\ varied situations
(situations where the chance of winning was not so small as to be a gamble or so
large as to be a sure thing situations where there was a reasonable and challenging
chance of success).
8. Personality traits: taking the initiative in situations requiring it; accepting and
accomplishing more than your share of the work; willingness to work hard even if the
financial rewards are slow in coming; establishing high standards of performance and
raising them once they are met.
The term entrepreneur has been defined as one who detects and evaluates a new
situation in his environment and directs the making of such adjustments in the
economic systems as he deems necessary. He conceives of an industrial enterprise for
the, purpose, displays considerable initiative, grit and determination in bringing his
project to fruition, and in this process, performs one or more of the following:
Characteristics of Entrepreneurs
1. Mental Ability
2. Clear Objectives
An entrepreneur should have a clear objective as to the exact nature of the business,
the nature of the goods to be produced and subsidiary activities to be undertaken.
3. Business Secrecy
An entrepreneur must be able to guard business secrets. Leakage of business secrets to
trade competitors is a serious matter, which should be carefully guarded against by an
entrepreneur. An entrepreneur should be able to make a proper selection of his
assistants.
5. Communication Ability
Technology constraints
Information constraints
Market constraints
What a firm can sell and the price it can obtain are constrained by its customers
willingness to pay and by the prices and marketing efforts of other firms. The
resources that a firm can buy and the prices it must pay for them are limited by the
willingness of people to work for and invest in the firm. The expenditures a firm
incurs to overcome these market constraints will limit the profit the firm can make.
Land
CAPITAL knowledge
LABOUR
technology
Innovation
Land is the natural resources available for production. Some nations are endowed with
natural resources and exploit this by specialising in the extraction and production of
these resources - for example - the development of the North Sea Oil and Gas.
Only one major resource is for the most part free - the air we breathe. The rest are
scarce, because there are not enough natural resources in the world to satisfy the
demands of consumers and producers. Air is classified as a free good since
consumption by one person does not reduce the air available for others - a free good
does not have an opportunity
Industrial location is primarily concerned with the sitting of a single factory, rather
than the whole industry, although the location of the industry is in itself a locational
factor. The concepts of site and situation play separate roles, although we may use the
word site in relation to location when we are really looking at the situation of the
factory. The site of a factory, or group of factories, is the actual physical location, or
block of land. These are some basic location information an entrepreneur should look
in before setting up of enterprise:
2. In the case of established enterprise, the need for enterprise location arises when
expansion, decentralization and diversification is undertaken to meet the increased
demand for its products.
5. When the tendency of shifting the market, depletion of raw materials, changes in
transportation facilities, new processes requiring a different location are observed in a
factory.
6. When a new branch or branches are to be opened for increasing the volume of
production or distribution or both.
How many of us knew that Scotsman Dunlops first tyre was not only inspired by the
flexibility of a garden hose, it was a piece of garden hose wrapped around a wheel!
Two major innovations chain drive mechanism and rubber pneumatic tyre
towards the end of the nineteenth century gave us the modern bicycle.
Human imagination has no boundaries and indeed human civilization has been driven
forward down the ages through human ingenuity through discoveries, inventions
and innovations.
A Swiss engineer, Georges de Mestral, was trying to discover a better fastener for
clothes. After walking in the woods, one day he noticed burrs sticking to his clothes.
Using a magnifying glass he found that tiny barbs from plants had hooked onto the
threads of the fabric he was wearing. After eight years of experimenting, he designed
two pieces of fabric: one with tiny hooks, the other with tiny loops, which would
adhere when touched but could be ripped apart. Velcro was patented in 1957.
In the real world of the economic, political and corporate market place that we live
and earn our living in, homegrown instances of entrepreneurship are presented with
new challenges even as they offer new opportunities, with new vistas opening up,
thanks to technological evolution of the world around us.
Innovation Defined
In the 21st century, its the very nature of innovation that has changed: its happening
faster, its more open and collaborative, and outdated concepts around tightly
controlled intellectual property are giving way to a more enlightened emphasis on
sharing intellectual capital.
For most of us as technologists, engineers and scientists, thats why its exciting as
well as a great challenge to be a part of the current wave of innovation because, in
todays world, technology is leading human evolution.
Innovation is not just breakthroughs in space science, cloned animal farms or satellite
communication. It can be more modest, incremental just better than the previous
alternative a better value proposition.
The process of innovation has been around for a long time. In fact, its part of the
evolution processes itself not just the evolution of technology or the evolution of
business but the evolution of humanity.
In some ways, at the dawn of the human civilization the ability to create and control
fire was a massive innovation. It transformed human beings into social creatures. And
this probably happened, as most innovations do, because one individual chose to look
at a problem differently than everyone else.
If we look around us, we would find myriad examples from the mundane safety pins
and bicycles on the one end of the spectrum to the very hi-tech nanotubes,
composites, aerospace sciences, technology convergence in telecommunication, etc.
Innovation consists in the purposeful and organised search for changes and essentially
means monitoring certain resources for innovative opportunity both within and
outside of the enterprise / business.
A creative idea that can enhance the quality of life, can bring to the people hitherto
unforeseen benefits and a fulfilment of a need.
1. Market need
In the 1920s, Charles Birdseye was puzzled with the problem of keeping frozen meat
from becoming damaged by the cells becoming punctured by slow forming ice
crystals. During a trip to Labrador, Birdseye watched how native people froze fish
quickly. He developed a fast freezing process that reduced crystal formation and
started selling small packages of frozen vegetables that still bear his name.
The need for information age workers to acquire new skills without
interrupting their working lives for extended periods of time;
The need to reduce the cost of education.
2. Economic growth
In a number of countries today, innovation has become one of the key factors
propelling economic growth and enhancing social benefits.
Today we live in an era of such rapid change and evolution that leaders must work
constantly to develop the capacity for continuous change and frequent adaptation.
They must recognise peoples innate capacity to adapt and innovate.
What if we can use augmented reality to see the world through someone elses eyes?
What if we can use robotics and information systems to help an ageing population
stay involved and independent? There are a lot of possibilities.
Indicators of innovation may well be on the horizon and come to be used as regularly
as those now published regularly to provide information on incomes, population or
public health.
One of the important properties of innovation is that of discontinuity and it can have
a deep social and economic impact. "Disruptive innovation" means one needs to often
deal with the unexpected, like:
Product Discontinuities
Typewriters Manual to electric, to dedicated word processors,
to personal computers
Lighting Oil lamps to gas, to incandescent lamps, to fluorescent
lamps, to light emitting diodes
Imaging Daguerreotype to tin type, to wet plate photography, to
dry plate, to roll film, to electronic imaging, to digital
electronic imaging
In the field of architecture consider the arch; till the Romans invented the arch,
mans creations remained small. This is because the materials used, like wood or
stone had limitations. Yet man craved for creating taller buildings, needed bridges
over rivers and difficult terrains. With the creation of the arch, man was no longer a
slave to the form. Now the form was mans domain. Longer bridges, bigger and taller
buildings, all came from this wondrous innovation.
5. Strategic R&D
A great idea can only get us started. In the changing global scenario and propelled
market demand for newer and better products, to stay at the leading edge and to
compete with more dynamic industrial economies as well as the newly emerging
economies there is a need for:
Strong science and technological links with the best research in the world;
Incentives for knowledge transfer;
Business R&D;
High standards of education imperatives of knowledge driven economy.
Growing market competition, not growing R&D spending, is what drives innovation.
A successful innovation policy is a competition policy where companies see
innovation as a cost-effective investment to differentiate themselves profitably.
Sources of Innovation
The incongruity
Demographics
New knowledge
Knowledge-base innovation
Innovation in business and businesses engaged in innovation will be the key. Ideas
and ideation will drive business and enhance quality of life for future generations.
Microsoft
The ongoing innovation in their products helps them gain competitive
advantage. Things like the Windows Media Audio format, for example, which,
when it was introduced, made big strides in compression and quality. The
Tablet PC has taken the older notion of "pen computing" and through new
technologies for inking, recognition and annotation, has helped to create a new
category.
MIT
The Deshpande Center for Technological Innovation at MIT is engaged in
projects like growing human liver cells for drug testing, and creating a new
material for computer displays. Grants are awarded for determining technical
feasibility of breakthrough ideas.
IBM
Believe in exploring new ways of working with an ecosystem of innovators
to solve societal challenges. Some examples of innovations over the past fifty
years are:
Sony
Consider the Walkman. Akio Morita felt that individuals should enjoy the
music of their choice, anywhere, anytime, without disturbing others. This
innovation in personal audio systems set in to motion an incredible revolution
in the entertainment sector this enabled them to tap into a larger market.
Innovation in Asia is on the rise, technology being a great leveller
An interesting example is that of Vimicro. The Chinese chip manufacturer holds some
400 patents and is the worlds leading supplier of PC camera processor chips, proof of
Chinese innovation, making a transition from "manufactured in China" to "designed
in China".
Innovation involves experimentation and risk taking. Risk of failure often justifies
potentially high returns from successes that are an incentive to innovate in the first
place. Hence, failures cannot and should not be a deterrent. Take the example of the
(American) General Electric Company, it failed in computers but has been a
successful innovator in three totally different fields aircraft engines, engineered
inorganic plastics and medical electronics.
What are the factors common to the success stories in innovation? First and foremost
we see that personal gain is not the prime driver of innovation. What is the engine of
innovation? What is the prime mover? The innovator can see what success can mean
and he is passionate about his goal.
The French economist J B Say stated more than 200 hundred years ago that the
entrepreneur "shifts economic resources out of an area of lower and into an area of
higher productivity and greater yield". Be that as it may, enterprise in todays
competitive world and dynamic times represents something larger in terms the scale
of the impact of the enterprise.
Enterprise is perhaps what McDonalds have achieved. They have taken advantage of
the eating out habit; used the traditional fare and achieved stupendous value addition
creating management tools for value creation for the customer across the country
and international borders, making the American style outdoor dining habit a global
phenomenon. This is undoubtedly entrepreneurship.
Post liberalisation in 1991 came the reality of intensified competition, which meant
that innovation had to be integrally woven into a firms strategy and had to derive and
sustain competitiveness through innovation.
India continues to spend less in comparison to that of the other developing countries
like China, Brazil and Korea (they all invest more than 1 per cent). A recent study
shows that R&D expenditures by most developing countries is far lower than that of
most developed countries
Creative thinking and foresight were demonstrated way back in the 19th century by
the founding father of the Tata Group, Jamsetji Tata. He envisioned hydroelectric
power as a clean source of energy hundred years on, the world continues its debate on
Kyoto protocol, sustainable development and clean development mechanism.
His concept of welfare and community development around a steel plant was far
ahead of his times; we all know how corporate social responsibility has been rapidly
integrated in recent times into the corporate balance sheet of companies worldwide.
Tatas have nurtured innovative ideas and displayed entrepreneurial spirit in venturing
into new geographies, market segments, and product areas.
Tata Motors
An exciting project is the peoples car, which would sell for around $2,200
(about Rs 1 lakh). A number of incremental innovations mark the project, like the
possible use of bolted or glued panels instead of welded bodies.
Indigo the first sedan designed and manufactured in India. This technology (as
is used the world over) allows Tata Motors to meet customer needs in different
segments with a single base model.
Titan
Edge from Titan the ultra slim wristwatch that is only 3.5mm thick and
30m water-resistant is a path-breaking design concept. No other company
selling mass produced watch is slimmer than this.
Tata Steel
Tata BP Solar
The sun, sand and sea (water) are all inexhaustible sources of renewable and clean
energy. It will play a significant role in the years ahead in terms of innovative
harnessing and applications for the benefit of the larger mankind.
Conclusion
Countries such as India are poised to become significant knowledge economies and
must take on the challenge of looking at making innovations work in the context of
developmental imperatives.
Innovations will be the mainstay for societies to forge ahead and the level of our
engagement in research and development activities coupled with appropriate
applications in the frontier areas of nanotechnology, healthcare and biotechnology,
material sciences, alternative sources of energy will determine a nations place in the
new global order.
The world will always need innovators and innovations; it is not a destination but an
endless journey and the spirit of entrepreneurship will continue to be a great enabler.
Capital Management
The term business finance refers to the assets, liabilities, capital, revenue and
expenses of the business. For you, "expenses" may or may not literally include taxes,
but however you want to slice it, taxes and tax considerations obviously have a big
impact on how businesses are organized and run.
Internal management accounts provide information, which is valuable for the purpose
of control. The information is made available in the form of accounting data, which
may be manifested as financial is made accounting statement. A financial analysis
reveals where the company stands with respect to profitability, liquidity, leverage and
an efficient use of its assets.
Financial reports provide the framework within which business planning takes place.
They are the key through which an effective control of a business enterprise is
exercised. It is the process of determining the significant financial characteristics of a
firm. It may be external or internal. The external analysis is performed by creditors,
stockholders and investment analysis. The internal analysis is performed by various
departments of a firm.
Its purpose is to find out whether the project is attractive enough to secure funds
needed for its various constituent activities and once having secured the funds,
whether the project will be able to generate enough economic values to achieve the
objective for which it is sough to be implemented. It deals not only with the financial
aspects of a project but also with its operational aspects.
As such, it is necessary to undertake such an analysis not only in the case industrial
project but also in the case of non-industrial project. Analysis of financial statements
has become very significant due to the widespread interest of various parties in the
financial results of a company. In recent years, the ownership of capital of most public
companies has become broad-based. A number of parties and bodies, including
creditors, potential suppliers, and debenture-holders, credit institutions like banks,
industrial finance corporations, potential investors, and employees, trade unions,
important customers, economists, investment analysis, taxation authorities and
Government have a stake in the financial results of a company. Various people look at
the financial statements from various angles.
Almost all businesses need to acquire and use fixed assets. That acquisition, of
course, can be through purchasing or through renting or leasing. Purchase and
lease decisions in turn require ROI analysis and financing decisions. Then, once
an asset is acquired, it must be recovered, or expensed, over time to reflect its
depreciation and plan for its replacement. The financing and cash flow decisions
involved in acquiring assets will affect both business operations and owner
finances, especially in proprietorships, partnerships and closely held corporations.
Capital structure.
Capital structure refers to how much of the business financing is through owner
equity and how much is through debt or other liabilities and how it is done, that is,
the mix of financial instruments and ownership vehicles. Business capital
requirements and owner decisions influence the capital structure, which in turn
influences the owner's personal finances. Entrepreneurs must decide how much of
their own capital to invest in the business, how they will be "paid" for that capital
(in profits, wages, interest, or other ways) and how procuring capital through
loans will affect their own financial well-being.
Working capital.
Cash flow.
This is the bigger picture for working capital. Does the business have enough cash
to meet its ongoing business needs? Does it generate enough cash through
operations to replace assets, pay its owners, and fund its growth? Poor cash flow
leads to inadequate business resources. It can cause an assortment of financial
problems, from decreases in owner returns to severe shortages of capital that must
be met eventually by the owners. Cash flow becomes especially critical when the
owners must replace key assets or as they're implementing important growth and
competitive strategies. Many a business has declined or failed because of
inadequate cash flow to replace assets or to execute key competitive strategies--
and these problems almost always come back to the doorstep of the entrepreneur.
Risk management.
Any business faces various financial risks. Customers don't always pay, interest
rates don't always stay the same, tax rules change, sources of funds don't always
come through as expected, owners or investors can leave and the list goes on--all
with obvious personal financial consequences.
Just as in the business, the key to a financially healthy and secure household lies
in managing day-to-day money flows--income and expenses. Here we talk about
the use of personal budgets and banking and credit to manage family finances and
lay bricks in place to achieve longer-term goals.
Every entrepreneur has to decide when, how, and how much to be paid from the
business. This key decision obviously impacts personal finances, but it is also
important to the financial health of the business. The amount and timing of such
payments should be right for both the entrepreneur and the business. Also, it
should generally--but not always--be done in a way to minimize tax impact. The
amount and regularity of income from the business must, of course, be accounted
for in the personal financial budget. "Payment" may be in forms besides cash--
benefits, retirement savings, or use of assets. However entrepreneurial
compensation is structured, it must be thought through carefully.
We mentioned income, but income most surely doesn't translate directly to wealth.
Just ask the thousands (millions?) of entrepreneurs and other individuals with
substantial incomes but little to show for them. The slogan is "Make it, keep it,
grow it"--but many never get past "make it." Why? Poor money management--
lack of awareness, commitment and control--gets in the way of keeping it, and
poor or inattentive use of investing and savings vehicles gets in the way of
growing it. Now, we know that most entrepreneurs are too busy to be very active
investors, but we will offer some investing basics to help savvy entrepreneurs
figure out where to stash their cash.
Risk management.
Just as in business, your personal life involves risks, including loss of income,
health problems, liability, and loss of property. Risk management isn't just about
insurance, although insurance is an important tool used to manage risk.
Entrepreneurs and their families incur the same risks as other people, but business
owners may face some additional risks--and may also have some other alternatives
to help manage them.
Benefits.
Retirement planning.
"Retirement planning" means figuring out how much you need for retirement and
how you will achieve that "number" or goal; "retirement plans" refer to the
specific savings vehicles you use to move toward achieving that goal. The first is a
matter of pure planning and number crunching; for the entrepreneur, it must
include an exit strategy, a way out of the business. The second is really part of the
"benefits" package--choosing the right retirement savings package to maximize
savings and tax advantages for both you and your business. There are many
choices, complex choices that depend on both the finances and the operations
(specifically, number and type of employees) of the business.
Transition and distribution planning.
Sooner or later, for financial or other personal reasons, every entrepreneur needs
to figure out an exit strategy from the business. Needless to say also, sooner or
later, we all die. In personal finance, estate planning concerns the preparation to
transfer assets and decision-making authority to others. When a business is
involved, the process is first more complex and second should usually start earlier.
If something happens to you, what happens to the business? If something happens
to one of your partners or key employees, what happens to the business? And
what happens to your personal finances as a result of these events? Should you
sell your business? When and why? How do you maximize your personal wealth
as you close the doors? Again, many, many choices--all begging for careful
planning.
Another important aspect of our economy is scarcity, better known as the law of
supply and demand. You see this law in action (or hear of its effects) every time
there is a major sports or entertainment event. The tickets are sold out in hours and
at substantial prices. Why are people willing to pay so much? Because there are
many who want to attend the event and few seats available. In other words, the
demand is greater than the supply. In such circumstances, price becomes the
mechanism for sorting out consumers. In a free enterprise system, those who have
the money and are willing to spend it will reap the benefits. If customers demand a
good or service that is not readily available, then a scarcity exists.
Major companies may want to create a shortage during the holiday season by
limiting supplies so that they can maintain a higher price. For example,
Microsoft introduced Xbox prior to a holiday season. Many young people
added this game to their wish list, only to discover that the game would not be
released until two weeks before Christmas. This deadline or short notice
created a demand for Xbox, yet the supply available from Microsoft was
limited, creating a shortage. The Xbox sold for a higher price, because the
demand was high and the supply was low. In a few years, the Xbox will be
much cheaper to purchase, because the supply will have increased, making it
readily available.
In addition, the demand will probably decrease because other games will come
onto the market. Demand decreases and supply increases, causing prices to
decrease as well. This same concept was used several years ago with Cabbage
Patch dolls. Mattel advertised these dolls prior to Christmas. Many children
requested them for Christmas, but the supply was limited. A shortage was
created, and the public demanded the items. Therefore, people were willing to
pay higher prices. Now Cabbage Patch dolls are no longer available or
demanded, and many people paid a high price for an item that is nearly
worthless today.
There is a point in supply and demand in which they are equal, known as
equilibrium. Equilibrium is the point in price at which the consumer is
willing to buy.
There fore it is the entrepreneur who through market analysis analyse the
exact demand and supply of particular product, so the various resource can
be managed and arranged accordingly. They turn demand into supply by
recognizing consumer wants and acting upon them. Because of the growing
popularity of embroidered business clothing and school items, we were able
to address this embroidery demand.
Managing labour
Has evolution made managing people difficult or easy???? todays workforce
becoming increasingly diverse and organizations doing more to maximize the benefits
of the differences in employees, Human Resource managers are evolving from the
old school sideline players to the front-line fighters and Organizations are relying
on managers to get the people who get the job done, and of course, make the company
money. Have you all noticed recently that even politicians have started requiring the
services of HR managers??? So as for entrepreneur also it has become necessary to
manage the human resource efficiently to make profits.
Tom Peters
A question comes to our minds why this sudden focus on people management?
Well people have always been central to organizations, but their strategic importance
is growing in todays knowledge-based business world like never before; this is
largely because an organizations success increasingly depends on the knowledge,
skills, and abilities of its employees, particularly as they help establish a set of core
competencies which distinguish one organization from its competitors.
Identify where you want your company to go and how you can get there. The
goals should be specific, measurable, attainable, realistic and timely. Next, make
sure that every employee knows and understands what to do to achieve those
goals.
Gather a group of employees and think of ways your company can "give back to
the community." Employees will see this as a positive step your organization is
taking to assist others. This is usually a great morale booster, too. You've been
making an impact on your company; now you can do the same for your
community.
Get out of your office. See what your employees are doing. Talk with them so
they know you're interested in their work. Discover how well people are getting
along with each other. Identify frustrations that employees have with each other
and with their work. Get to know them as human beings, not just employees. Be
available to answer questions, clarify options and interpret company goals.
Become a valued resource to them.
Talk with your employees and identify what gets in the way of their achievement.
It could be resources, tools, budgets, processes or even managers. Your task is to
find these bottlenecks and remove them. Apply proven techniques to lower
tensions and build a positive work environment.
Pinpoint the strengths and limitations of your organization. These could be your
people, your management structure, the way employees are treated and managed,
the clarity of goals, roles, process and systems, and the effectiveness of personal
interactions. Then take action to improve the situation.
Form a team to address the issues discovered in your survey. Before implementing
any changes, convene groups of employees to discuss the need for changes and
how those changes will be implemented. Make sure employees feel involved in
the process. Participation will reduce resistance to the changes.
Everyone likes to know when they're doing a good job. The compliments validate
their efforts and document their success. Make sure that your top performers know
you appreciate their work and that you reward them with money, recognition or
advancement.
9. Develop a management training program.
Build your future managers now; don't rely on chance. Identify the core
competencies that have led to success in your current managers and leaders. Then
develop those factors in other employees so that you have a continual supply of
qualified individuals managing and leading your organization.
Knowledge management
A former President of the United States said that where
knowledge spreads, wealth spreads; and to diffuse
knowledge in the world is to diffuse wealth in the world.
Those words were spoken by President Rutherford B.
Hayes on May 15, 1878, and they are as true today as
they were 124 years ago.
How much time do the people in our organizations spend looking for information?
Knowledge management can change this search time into highly effective work time.
Knowledge management is one of those ephemeral terms that seem to mean nothing
and everything simultaneously. During the past couple of years, it has been variously
identified with document management, business intelligence, collaborative
computing, corporate portals, and any number of buzzwords. But rather than a single
product, knowledge management encompasses a business strategy aimed at
taking advantage of a company's existing base of information, experience, and
expertise.
Sometimes we can solve a problem, make a decision or perform some task because
we know what is the correct solution, alternative or behaviour; we have the
information we need to act. Sometimes we know how to solve that problem, make
that decision or perform that task; we have the knowledge we need to be successful.
Sometimes we know who can help us with the solution, decision or task; we can
identify the expert and the expertise we need to get the right answers.
Knowing what, how and who in support of the key processes and strategies of an
enterprise is the knowledge of interest to knowledge management.
Types of knowledge
This what, how and who is sometimes fully documented, written down,
communicated or recorded in some explicit format. Other times, it is just in our
heads, an understanding that we possess in some tacit way, based on our experience
or learning. In most organizations, about 20% of the knowledge required for the
successful operation of that organization is explicit; the remaining 80% are tacit.
Knowledge management deals with these two types of knowledge, tacit and explicit.
It often seeks to make the tacit knowledge of an individual or group explicit, so that it
can be more readily shared with others. As new knowledge is acquired, it becomes
part of the tacit knowledge base of the learner who subsequently adapts it and applies
it as needed to solve new problems, make new decisions or perform new tasks. With
experience and continued learning, the tacit knowledge matures and evolves into new
knowledge, which remains tacit within the individual or group until they document it
in some fashion, making it explicit
Social Capital
Of firm
In brief, knowledge and information have become the medium in which business
problems occur. As a result, managing knowledge represents the primary opportunity
for achieving substantial savings, significant improvements in human performance,
and competitive advantage.
Its not just a Fortune 500 business problem. Small companies need formal
approaches to knowledge management even more, because they dont have the market
leverage, inertia, and resources that big companies do. They have to be much more
flexible, more responsive, and more "right" (make better decisions) because even
small mistakes can be fatal to them.
Activity or process times are positively impacted through the instant availability of
knowledge
Human Interaction is the focal point surrounding the collection, distribution and
reuse of information
o Cognitive science. Insights from how we learn and know will certainly improve
tools and techniques for gathering and transferring knowledge.
o Expert systems, artificial intelligence and knowledge base management
systems (KBMS). AI and related technologies have acquired an undeserved
reputation of having failed to meet their own and the marketplaces high
expectations. In fact, these technologies continue to be applied widely, and the
lessons practitioners have learned are directly applicable to knowledge
management.
o Computer-supported collaborative work (groupware). In Europe, knowledge
management is almost synonymous with groupware and therefore with Lotus
Notes. Sharing and collaboration are clearly vital to organizational knowledge
management with or without supporting technology.
o Library and information science. We take it for granted that card catalogs in
libraries will help us find the right book when we need it. The body of research
and practice in classification and knowledge organization that makes libraries
work will be even more vital as we are inundated by information in business.
Tools for thesaurus construction and controlled vocabularies are already helping
us manage knowledge.
o Technical writing. Also under-appreciated even sneered at as a
professional activity, technical writing (often referred to by its practitioners as
technical communication) forms a body of theory and practice that is directly
relevant to effective representation and transfer of knowledge.
o Document management. Originally concerned primarily with managing the
accessibility of images, document management has moved on to making content
accessible and re-usable at the component level. Early recognition of the need to
associate "metainformation" with each document object prefigures document
management technologys growing role in knowledge management activities.
o Decision support systems. According to Daniel J. Power, "Researchers working
on Decision Support Systems have brought together insights from the fields of
cognitive sciences, management sciences, computer sciences, operations research,
and systems engineering in order to produce both computerised artifacts for
helping knowledge workers in their performance of cognitive tasks, and to
integrate such artifacts within the decision-making processes of modern
organisations." [See Powers DSS Research Resources Home page.] That already
sounds a lot like knowledge management, but in practice the emphasis has been
on quantitative analysis rather than qualitative analysis, and on tools for managers
rather than everyone in the organization.
o Semantic networks. Semantic networks are formed from ideas and typed
relationships among them sort of "hypertext without the content," but with far
more systematic structure according to meaning. Often applied in such arcane
tasks as textual analysis, semantic nets are now in use in mainstream professional
applications, including medicine, to represent domain knowledge in an explicit
way that can be shared.
o Relational and object databases. Although relational databases are currently
used primarily as tools for managing "structured" data and object-oriented
databases are considered more appropriate for "unstructured" content we have
only begun to apply the models on which they are founded to representing and
managing knowledge resources.
o Simulation. Knowledge Management expert Karl-Erik Sveiby suggests
"simulation" as a component technology of knowledge management, referring to
"computer simulations, manual simulations as well as role plays and micro arenas
for testing out skills." (Source: Email from Karl-Erik Sveiby, July 29, 1996 )
o Organizational science. The science of managing organizations increasingly
deals with the need to manage knowledge often explicitly. Its not a surprise
that the American Management Associations APQC has sponsored major
knowledge management event.
Entrepreneurs contribute to the economic cycle of success. As entrepreneurs, they do
the following:
They provide jobs, not only for themselves, but also for other individuals who
help in the business endeavours. As the business expands and grows, the
entrepreneur realizes that he or she cant work and manage the business 24
hours a day, 7 days a week. So the entrepreneur will seek additional
employees to lighten the workload.
A recent Mckinsey & Company-Nasscom report estimates that India needs at least
8,000 new businesses to achieve its target of building a US$87 billion IT sector by
2008. Similarly, in the next 10 years, 110-130 million Indian citizens will be
searching for jobs, including 80-100 million looking for their first jobs. This does not
include disguised unemployment of over 50% among the 230 million employed in
rural India. Since traditional large employers- including the government and the old
economy player-may find it difficult to sustain this level of employment in future, it is
entrepreneurs who will create these new jobs and opportunities.
1. Create the Right Environment for Success: Entrepreneurs should find it easy to
start a business. To do so, most Indians would start slow with capital borrowed from
family and friends, the CEO playing the role of salesman and strategist, a professional
team assembled months or perhaps years after the business was created, and few, if
any, external partners. Compare this with a start-up in Silicon Valley: a Venire
Capitalist (VC) or angel investor would be brought in early on; a professional
management team would drive the business; a multifunctional team would be
assembled quickly; and partnerships would be explored early on to scale up the
business. A major challenge for India is to create a handful of areas of excellence- the
breeding ground where ideas grow into businesses. For example, Gurgaon and
Hyderabad for remote services, or Bangalore for IT. One way of strengthening
these areas is to consider the role of universities and educational institutions-places
where excellence typically thrives.
2. Ensure that Entrepreneurs have access to the Right Skill: A survey conducted
by McKinsey & Company last year revealed that most Indian start-up businesses face
two skill gaps: entrepreneurial (how to manage business risks, build a team, identify
an get funding) and functional (product development know-how, marketing skills,
etc.) India can move toward ensuring that the curriculum at universities is modified to
address todays changing business landscape, particularly in emerging markets, and to
build centres of entrepreneurial excellence in institutes that will actively assist
entrepreneurs.
3. Ensure that Entrepreneurs have access to Smart Capital: For a long time,
Indian entrepreneurs have had little access to capital. It is true that in the last few
years, several Venture Funds have entered the Indian Market. And, while the sector is
still in infancy in India (with estimated total disbursement of less than US$0.5 billion
in the year 2003), VCs are providing capital as well as critical knowledge and access
to potential partners, suppliers, and clients across the globe. However, India has only a
few angel investors who support the idea in the early stages before VCs become
involved. While associations such as TIE are seeking to bridge the gap by working at
creating a TIE India Angel Forum, this is Indias third challenge creating a global
support network of angelswilling to support young business.
Both the Central Government and various State Governments are taking increased
interest in promoting the growth of entrepreneurship. Individuals are being
encouraged to form new businesses and are being provided such government support
as tax incentives, buildings, roads, and a communication system to facilitate this
creation process. The encouragement by the central and state governments should
continue in future as more lawmakers are realizing that new enterprises create jobs
and increase the economic output of the region. Every state government should
develop its own innovative industrial strategies for fostering entrepreneurial activity
and timely development of the technology of the area. The states should have their
own state-sponsored venture funds, where a percentage of the funds have to be
invested in the ventures in the states.
Societys support of entrepreneurship should also continue. This support is critical in
providing both motivation and public support. A major factor in the development of
this societal approval is the media. The media should play a powerful and constructive
role by reporting on the general entrepreneurial spirit in the country highlighting
specific success cases of this spirit in operation.
Present scenario:
Melt down in financial markets has plunged the economies around the world into
recessions. At these times, other features start appearing in the economy such as:
Investors stepping backward, customers draw the line to their expenditure, and finally
revenue falls. But it is a fact that, during the Great depression of 1929, one of the well
known companies MOTOROLA had a fortune time & expanded worldwide.
India has been left behind by many Asian economies including countries that were
poor as India few decades ago. After the reforms, Indias growth rate now looks set to
stabilise at a healthier 6 to 7% a year. One of the interesting fact is that even in closing
businesses entrepreneurs in India have to go through a complicated procedure ,and by
which India is ranked 133rd in closing businesses.
Risk is the reward for business but then the middle class Indians who are the
majority in the Indian population step backwards in investing in a new business even
if they have sufficient knowledge of some business, source of finance and new ideas,
this is mainly due to the lack of safety which is non existent.
d. Lack of managerial skills among the fresh entrepreneurs. They often fail to
channelize funds.
e. Lack of basic practical knowledge even among few business students, where the
learning process cannot withstand the international standards.
a. If India continues on the free market path ,stress education which leads to greater
public awareness and accountability, develops its physical and economic
infrastructure to facilitate enterprise, the license raj of India will someday be equal
that of the U.S. in its effectiveness.
WHAT IS TO BE DONE?
c. Incentives are motivation for the workers to work hard and it often leads to
innovative ideas and actions leading to innovation.
d. The expansion plans must be realistic and provide a reasonable remuneration of the
capital invested.
e. Role of small and medium enterprises (SMEs) In the new environment, the
competitiveness of large firms greatly depends on the efficiency of small firms. It
should be up-to-date but at the same time it must be able to meet the needs of both
traditional and new product lines. E.g. Silicon Valley in the United States is a very
shining example of the contribution of techno-entrepreneurship to the whole world.
f. The physical infrastructure in the country should be made adequate as in the supply
of professional and commercial services.
g. The education system in India should incorporate skill-based learning and the
principles of market economy early in the education stage as in the foreign countries.
m. Encumbrance of the employees with work beyond their capacity would neither
permit the smooth functioning of the firm nor leads to innovation.
n. IT revolution through out the country, as in the Malappuram (Kerala) which is
regarded as the first computer literate district in India groomed by the Akshaya (e-
literacy campaign).
Conclusion
The decision to start an entrepreneurial venture consists of several sequential steps (1)
the decision to leave a present career or lifestyle. (2) The decision that an
entrepreneurial venture is desirable; and (3) the decision that both external and
internal factors make new venture creation possible.
There are both pushing and pulling influences active in the decision to leave a present
career: the push of job dissatisfaction or even layoff, and the pull toward
entrepreneurship of seeing an unfilled need in the market place. The desirability of
starting ones own company is strongly influenced by culture, sub-culture, family,
teachers, and peers. Any of these influences can function as a source of
encouragement for entrepreneurship, with support ranging from government support
that favour business to strong personal role models of family or friends, Beyond the
stage of seeing entrepreneurship as a a good idea, the potential entrepreneur must
possess or acquire the necessary education, management skills, and financial
resources for launching the venture.
The study of entrepreneurship has relevance today, not only because it helps
entrepreneurs better fulfill their personal needs but because of the economic
contribution of the new ventures. More than increasing national income by creating
new jobs, entrepreneurship acts as a positive force in economic growth by serving as
the bridge between innovation and market place. Although government gives great
support to basic and applied research, it has to have great success in translating the
technological innovations to products or services. Although intrapreneurship offers a
promise of marriage of those research capabilities and business skills that one expects
from a large corporation, the results have not been spectacular. This leaves the
entrepreneur, who frequently lacks both technical and business skills, to serve as the
major link in the process of innovation development, and economic growth and
revitalization. The study of entrepreneurship and education of potential entrepreneurs
are essential parts of any attempt to strengthen this link so essential to a countrys
economic well-being.
Bibilography:
3. Entrepreneurship-ICFAI Publication
4) Fundamental of entrepreneur By G.S.Sudha
5) www.entrepreneur.com
6) www.wikipedia.com
7) www.knoweledgeentrepreneur.com