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CHAPTER 1

INTRODUCTION
TO
ENTREPRENEURS
HIP

GENERAL
CONCEPT
S

THE ENTREPRENEUR
Our common understanding:
The boss
The business owner
The risk taker
One who starts a small
The pioneer
The resourceful guy

business

WHY BE AN
ENTREPRENEUR?
The four primary reasons that
people become entrepreneurs
and
start
their
own
companies:
Desire to be their own boss
Desire to pursue their
own ideas
Doing work they enjoy
Financial rewards

ENTREPRENEURSHIP VS
ENTREPRENEUR
Entrepreneur

Entrepreneurship

The practice of starting and


One who undertakes and operates
operating
new
organizations,
a new enterprise and assumes
particularly
new
businesses
some
accountability
for
the
generally in response to identified
inherent risks.
opportunities.
Often synonymous with founder.

Ranges in scale from solo projects


to major undertakings creating
many job opportunities.

The
person
who
leads
an
The
coordination
process
enterprise through leadership and
maintained by an entrepreneur
motivation, by coordinating all
and the way in which an
three elements of production
entrepreneur leads and motivates.

ENTREPRENEURSHIP VS
ENTREPRENEUR
In short:

Entrepreneur
A person pursuing or operating a
business, usually with considerable
initiative and risks

Entrepreneurship
The process or practice of pursuing
or managing the business

DEFINITI
ON

FRENCH WORD ORIGIN


Entependre to undertake

NO SINGLE DEFINITION
Richard Cantillon
A person who pays a certain price to a
product to resell it at an uncertain price,
thereby making decisions about obtaining
and using the resources while consequently
admitting the risk of enterprise.

Adam Smith
An individual who undertakes the formation
of an organization for commercial purposes
by recognizing the potential demand for
goods and services, and thereby acts as an
economic agent and transforms demands

Jean Baptiste Say


An entrepreneur is a coordinator and
organizer of resources to design a business
enterprise.

Joseph Schumpeter
Entrepreneurs are innovators who use this
process of shattering the status quo of the
existing products and services, to set new
products, new services.

Peter Drucker
Entrepreneur is the one who is involved in
gathering and using resources and
opportunities to produce results.

FOR THIS COURSE:


Entrepreneur
A
vision-driven
individual
who
undertakes significant personal and
financial risk to start, run and expand
a business.

Entrepreneurship
The pursuit of opportunity through
innovation, creativity and hard work
without regard for the resources
currently controlled.

THEORIES

THEORIES OF
ENTREPRENEURSHIP
Entrepreneurs

cause entrepreneurship
Entrepreneurship is a function of the
entrepreneur:

E = f(e)
For

this course, we will discuss


theories of entrepreneurship

Sociological Theory
Entrepreneurship is likely to get a boost in a
particular social culture
Societys values, religious beliefs, customs, taboos
influence the behavior of individuals in a society
The entrepreneur is a role performer according to
the role expectations of the society
Psychological Theory
Entrepreneurship gets a boost when society has
sufficient supply of individuals with necessary
psychological characteristics
The psychological characteristics include need for
high achievement, a vision or foresight, ability to
face opposition
Individuals wit such characteristics tend to take keen
interest in situation of high risk, desire for
responsibility and desire for task performance.

Entrepreneurship Innovation Theory


Joseph Schumpeter believes that entrepreneurs
help the process of development in an economy
as they are the innovators who introduce a new
product or a new production method, open up a
new market, find out a new source of raw material
supply, and introduce new organization in any
industry.
The

theory emphasizes on innovation, ignoring


the risk taking and organizing abilities of an
entrepreneur.

According

to this theory, entrepreneur is a large


scale businessman, who is rarely found in
developing countries, where entrepreneurs are
small scale businessmen who need to imitate

Economic Theory of Entrepreneurship


Entrepreneurship and economic growth take
place
when
economic
conditions
are
favourable
Economic

incentives are the main motivators


of entrepreneurial activities

Economic

incentives include taxation policy,


industrial policy, source of finance and raw
material,
infrastructure
availability,
investment and marketing opportunities,
access
to
information
about
market
conditions, technology, etc.

Theory of High Achievement


McClelland
identified
2
characteristics
entrepreneurship
i. Doing things in a new and better way
ii. Decision making under certainty

of

.People

with high achievement orientation (need


to succeed) were more likely to become
entrepreneurs

.Such

people are not influenced by money or


external

.They

consider profit to be a measure of success


and competency

CHARACTERISTIC
S

Being
an
entrepreneur
requires
specific
characteristics and skills that are often achieved
through education, hard work, and planning.
Risk

taker
Businesses face risk. As their own boss,
entrepreneurs face more risks as compared to
employees in a company. Entrepreneurs can
minimize risk through research, planning and skill
development.

Perceptive

Entrepreneurs view problems as opportunities and


challenges.
Curious

Entrepreneurs like to know how things work. They

Hardworking
Entrepreneurs need a great deal of energy to see a
venture start and succeed. Yet they are not deterred
by the long hours to achieve their goal.
Goal-setting
Entrepreneurs are motivated by the excitement of
staring a new business. Once achieved, they seek
out new goals or ventures to try.
Persistent
True entrepreneurs face bureaucracy, make
mistakes, receive criticism, and deal with money,
family, or stress problems. But they still stick to
their dreams of seeing the venture succeed.
Imaginative
Entrepreneurs are creative. They imagine solutions
to problems that encourage them to create new
products and generate ideas.

Independent
An entrepreneurs desire for control and the ability
to make decisions often makes it difficult for them
to work in a controlled environment.
Flexible
Entrepreneurs must be flexible in order to adapt to
changing trends, markets, technologies, rules, and
economic environments.
Self-confident
Entrepreneurs believe in themselves. Their selfconfidence takes care of any doubts they may
have.

Why study
ENTREPRENEURSHIP?

There are two primary reasons why studying


entrepreneurship makes sense: you learn to
think like an entrepreneur and you develop a
vision for your life.

Thanks!
Any questions?