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FUNDAMENTALS OF ENTERPRENEURSHIP

Unit – I
Entrepreneurship

 According to Economist Definition:


An Entrepreneur as one who brings
resources, labor, material and other
assets in to combinations that make
their value greater than before and
also one who introduce changes,
innovations and a new order.
 As per Psychologist an entrepreneur as a
person who is typically driven by some
forces, which create a desire to obtain or
attain something.
 A Sociologist defines entrepreneur as a
person whose actions would determine
his social status and who contributes to
the development of the society.
Other Definitions of Entrepreneur
 1775 Cantillon -A Person bearing Risk
 1800 Say -An agent Combining all
Factors of Production
 1921 Knight -Recipient of Pure Profits
 1930 Weber -Innovator
 1934 J Schumpter -Ability to Identify New
Opportunities
1973 Kirzner -Contributes to movement
towards equilibrium by pursuing
opportunities via equilibrium
 1982 Mark Casson -Decision maker In coordinating
scarce resources
 1987 Stevenson & Sahlman -The Relentless pursuit of
Opportunity
 1990 Gartner -Actions taken to create
Orgnizations
 1991 Bygrave &
Hofer -Characteristics of
Entrepreneurial Process
P F Drucker has aptly observed that “Innovation is
the specific tool of entrepreneurs, the means by which
they exploit as an opportunity for a different business
or service.
Entrepreneurship – The Saga
 Entrepreneur is derived from the French verb
enterprendre. It means to undertake.
 Early 16th Century – Frenchmen – military
expeditions were referred as entrepreneurs.
 Around 1700 A.D the term was used for Architects
and contractors of Public works
 After Industrial revolution you know the history.
Basics of an Entrepreneur

Organization
Urge
Innovation
Skill
Risk
Vision
Enterprise
Growth
Management
Key Elements of Entrepreneur
Risk Taking Innovation

Ethics
Values

Vision Character Organizing Skill

Operational Excellence
Entrepreneurship is a Process
 It is a Leadership Function and a dynamic
concept
 More so It is a Process
StageI:Some Change in the socio economic
environment leading to changes in the
every aspect of life in the country. It
means that Change creates needs for new
goods. Example:
Result : Identifying Opportunity
Stage II: By starting a new venture

Result : Establish Vision

Stage III: Entrepreneurship. In this process extending the


enterprises domain of competence by exploiting
new opportunities through new combinations of its
available resources.
Result: Persuade other resources. And create New Venture
Product/Market
Stage IV: Is to coordinating the varied activities
to achieve the entrepreneurial goal.

Result : Change and Adopt with Time


Practicalities of Entrepreneurship
 Entrepreneurship is one of the most challenging,
yet most rewarding, personal journeys that one
takes following one’s instinct.
 Think Big – Creating Teams – Testing the Idea –
Say yes to Dreams.
 Do not fear to try over and over again – Do not
stop with Idea and Excitement – Asking yourself
why you will succeed.
 Passion for Enterprise & Success.
 If one traces the Indian Entrepreneurs, the pre 1980s
characterized an era of state dominance, thereby
restricting free enterprise.
 Post 1991 there was a new found confidence in the
global Indian mindset.
 In the new age, professional entrepreneurs possess a
contagious energy to progress and can visualize and
actualize.
 There’s a strong focus on execution, belief in
consensus building confidence to challenge the status
quo and inclination towards building an institution.
 They balance the organization DNA to touch the best
of both entrepreneurship (Innovation, Risk Taking,
flexibility etc.) with institution building (Process,
systems, controls and scalability etc.). India is now
well positioned to a leap in to this new wave of
professional entrepreneurship.
 Don’t jump in just make money, though that is
important too but feel strong about the venture it will
pay off in the end and money will flow in
automatically.
 Realize not everything you do will be successful. You
should be experiment and restart if you fail.
 Entrepreneurship is embedded in Indian genes. The Sikhs
of Punjab and traders from Gujarat and Marwar. India’s
Political and Social structures have preserved
entrepreneurs. Agriculture still in the private hands.
India’s sprawling rural economy has always been entirely
capitalist in its orientation.
 One Per cent Capital and Ninety Nine per cent persistence,
focus and humility.
 Don’t lose heart when people tell you your idea won’t work.
Just be that much more determined to make it work.
 Entrepreneurship is the backbone for small establishment;
it’s a must have to bring business to existence. From people
who repair the basic appliances used at home to some one
involved in a huge engineering company they are all
entrepreneurs.
 Gone are the days start up is the last option – Social
Acceptance – Job respectability is changing.
 Be very clear about exactly what you want to do. While
starting it up do not waste too much time searching
for outside funds. Great team work can push you far.
Start the business with the right process and tools so
that the system gets established right from the very
beginning in your organization.
 The entrepreneur is someone who sights an untapped
opportunity, a potential, prospect hitherto
unexplored by any one else and transforms this once
nebulous thought in to concrete reality.
 Entrepreneurs are born with some capabilities and traits.
There is an entrepreneurial gene. 2-3 percent of the
population have that gene.
 But the environment does not allow settle down as
entrepreneur, study well and get a good job. No parent will
say “son be an entrepreneur”.
 For many years, entrepreneurs have looked to western
models to create high potential businesses.
 And may be a challenging environment stimulates the
entrepreneurial ability.
 In 2010 the World Bank rated India133 out of 183 economies
in ease of doing business- and yet India has a thriving
group of entrepreneurs. The reason is their resilience and
adaptability.
 Jugaad Strategy – The big Indian Strategy – For India
Jugaad is a natural result of working in tough, resource-
constrained situations where making do and improvising
with what you have determines your success.
 It describes the ability to improvise and find a way around
problems, often using trail and error methods. Example:
Keeping old equipment running with improvised spare
parts is the classic example of Jugaad.
 When entrepreneurs and business combine jugaad with
the unique Indian approach to strategy, we see Indian
firms competing and winning on the International stage. It
is an ability to manage somehow, in spite of lack of
resources.
 The most powerful driver for an entrepreneur is faith
in the business Idea, faith in oneself and an incredible
passion to be successful in whatever you do.
 Overcoming the fear of failure and the known and
pursuing your goal, your vision, your dream is the best
and only way to move forward as far as entrepreneur is
concerned.
 Do not fear failure – Experiment and Innovate – Your
passion and your perseverance will overcome all
obstacles- Aim High, shoot for the Stars.
Opportunities are there to be seized; often we miss
them as we are blinded by tradition and fear of the
unknown.
 A spirit of taking on challenges. – A sense of
conviction – The strength of resourcefulness – An
ethos of persistence. – Leveraging failure as a
learning experience.
 The choice is ours – to adopt mediocrity and
survive, or to opt for excellence and flourish.
 Think out of the box. It does not serve to cater to
stereotypes. Have the courage to think out of the
box. Make outrageous decisions, make mistakes,
go against the tide.
 Be prepared to fail- unless you are willing to fail,
you will not take the risks that entrepreneurship
demands. Entrepreneurship is a tough road to
travel but the sheer joy of seeing results at every
step is like bringing up your little one. Enjoy the
ups and downs of the journey. Be an evangelist,
both externally and internally to spread your
message.
Entrepreneurship is a neither
Science nor an Art but, It is a
practice
Role of Entrepreneurship in Economic
Development
 Effectiveness of SSE depends up on the entrepreneurial and
managerial capabilities of those involved in business.
 It raises productivity through technical and other forms of
innovation
 It is a powerful tool of job creation
 It facilitates the transfer of technology
 They play a significant and strategic role in commercializing
the inventions and products.
 They also play a catalytic role in promoting development in
the economy.
 They reduce concentration of economic power and promotes
BRD.
 They make Markets more competitive.
Relationship between
Entrepreneurship and E D
 Economic process or rather development has
distinct phases
 Agrarian or resource society
 Early Industrialization
 Mature Industrialization
 Service and high technology economy
Entrepreneurial Competencies
Entrepreneurs can be of different types
1. Solo Operators: Who essentially work alone have
few employees.
2. Active Partners: Who have Partners to contribute
money to the business.
3. Partners : Are those entrepreneurs who
carry on the enterprise as a joint
activity.
4. Inventors : Are those whose chief competency is their
creativity and inventiveness.
5. Challengers : Are those who get in to business because of the
challenge it represents, and tend to get bored
when it seems to be settled and doing well.
They always look for newer challenges.
6. Buyers : Tend to purchase business rather than start
one themselves as it appears to them to be the
less risky alternative.
7. Lifetimers : Are those who see their business as integral to their life.
It is a mater of ego satisfactions and personal concern to
them to run the business.
Entrepreneurial competence what it is?
A competence is an underlying characteristics of a
person which results in effective an efficient way
of performing the task. Application of such
characteristics to take up the Enterprise.
Entrepreneurial Knowledge what it is?
Knowledge means collection of information and
retention of facts that an individual stores in
some parts of the brain. Using of Knowledge for
the Productivity, Profitability and sustainability
of an enterprise.
Entrepreneurial Skill what it is?
Skill is the ability to demonstrate a system and
sequence of behavior that are functionally related
to attaining a performance goal. This can be used
in running the enterprise.
Entrepreneurial motives and traits what they are?
A motive is a recurrent concern for a goal state or
condition appearing in fantasy, which drives,
directs and selects behavior of the individual.
Motive includes thoughts related to a particular
goal state.
A trait is dispositional or characteristic way in
which the person responds to an equivalent set of
stimuli. It includes thoughts and psycho-motor
activities related to a general category of
activities.
Some Competencies:
I. Initiative
II. Sees and acts on opportunities
III. Persistence
IV. Information seeking