ENTREPRENEURSHIP

DEVELOPMENT
BBA-V SEM
 Entrepreneur
1. Motive Start a venture by setting up
an enterprise for personal
gratification. Wants freedom
& self reliance.
2.Status Owner and is not very status
conscious
3.Risk Bearing Assumes all the risks of
carrying on business. Takes
moderate risks
4. Innovation Acts as an innovator and
change agent
5.Qualifications May not have formal
qualifications , but has
qualities like originality,
foresight, risk bearing
Manager
To render services in an
enterprise set up by someone
else. Wants promotion, power,
salary.
Is a worker, and conscious about
status.
Does not bear risk
Simply translates and
implements the entrepreneur’s
plans
Generally has formal
qualifications like management
degrees.
 Entrepreneur Manager
6. Rewards The profit earned by the Salary is certain and fixed.
enterprise. It is highly
uncertain.
7. Decisions Decisive and action oriented Implements the owner’s
decisions.
8. Courage & Confident and see themselves They see others in charge of
Destiny as owners of their destiny. their own destiny
 According to the type of business
 Use of technology
 Motivation
 Growth
 Stages of development
 Area
 Gender and age
 Scale of operation
 Others
 According to the type of business
1. Business Entrepreneur: They conceive an idea for a
new product or service and then create a business to
turn the idea into reality. They use and develop both
production and marketing resources to start a business.
(Small unit)
2. Trading Entrepreneur: They undertake only trading
activities and not manufacturing. They identify
potential markets, stimulate demand and create a desire
among consumers. May be engaged in domestic or
foreign trade.
 According to the type of business
3. Industrial Entrepreneur: A manufacturer who
identifies the potential needs of customers and
produces a product which will satisfy those needs.
(Generally large units)
4. Corporate Entrepreneur: A person who demonstrates
his innovative skills in organising and managing a
corporate undertaking. He plans, develops and
manages a corporate body such as a public limited
company or a trust. (Dhirubhai Ambani)
 According to the type of business
5. Agricultural Entrepreneur: They undertake
agricultural activities such as raising and marketing of
crops, fertilizers etc. They may use mechanization and
technology and would include agriculture and allied
occupations.
 According to use of Technology
1. Technical Entrepreneurs : He develops improved
quality of goods because of his skills and concentrates
more on manufacturing than marketing.
2. Non- Technical Entrepreneurs: They are not
concerned with the technical aspects of the product.
They only develop alternative marketing and
distribution strategies for their products.(Baron
International)
3. Professional Entrepreneurs :He is interested in
establishing a business , but does not have interest in
managing or operating it. They sell their businesses
and start another venture with the proceeds.(Sabeer
Bhatia of Hotmail)
 According to Motivation
1. Pure Entrepreneur: They are motivated by
psychological & economic rewards (achievement,
personal satisfaction, money)
2. Induced Entrepreneur: They are induced to take up
entrepreneurial activity on account the facilities,
incentives etc provided by the govt e.g. incentives for
SSIs, financial support , facilities for exports etc
3. Spontaneous Entrepreneur: They start their business
with their natural talents. They are
people with confidence, initiative, boldness etc
, which motivates them to undertake
entrepreneurial activity.
 According to Growth
1. Growth Entrepreneurs: are those , who take up
a high growth industry, which has substantial
growth prospects . (IT, Telecom)
2. Super Growth Entrepreneurs: Those who have
shown enormous growth of performance in
their ventures, which is reflected in profits,
liquidity etc.(Airtel, Zee)
 According to Stages of development
1. First Generation Entrepreneurs: are those , who
start an industrial undertaking through
innovation and combining various resources.(J
N Tata)
2. Modern Entrepreneurs: Those who undertake
ventures, which suit current market needs.
3. Classical Entrepreneurs: Those who are
concerned with starting an enterprise
 According to Stages of development
aimed at satisfying the consumers’ needs and
maximising profits.
 According to Area
1. Rural : Entrepreneurs who set up units in rural areas.
They generally pertain to agriculture and allied
industries. They require less investment and low
power consumption
2. Urban : Entrepreneurs who set up units in urban
areas, such as industrial areas, SEZs etc. They are
larger undertakings employing hundreds of people.
 According to Gender and age
1. Men
2. Women
3. Young
4. Old
5. Middle aged
 According to Scale of operations
1. Larger scale: large undertakings, employing large
no. of people, with no limit on investment.
2. Small Scale: Industrial undertakings in which there
is a maximum investment of Rs 1 cr (Rs 5 cr for some
categories e.g. sports goods), employ limited no. of
people and have limited power requirements etc.
 Others: Clarence Danhof has classified
entrepreneurs on the basis of stages of
economic development:
1. Innovating Entrepreneurs: They introduce new
goods, new methods of production, discover new
markets etc. They can exist only if a certain level of
development exists in the economy.
2. Adoptive or Imitative entrepreneurs: They
imitate technology and techniques used
 by others. They do not innovate. Such entrepreneurs
are suitable for underdeveloped/ developing nations.
They may adapt the business according to local
requirements.
3. Fabian Entrepreneurs : They have a traditional
outlook and do not believe in introducing changes in
the nature of business or adopting new methods. Their
work is determined by traditions, customs, religion
etc.
4. Drone Entrepreneurs: They also operate in a
traditional way and resist any changes in the manner
of doing business/method of production, even if they
suffer losses. Their purpose is to exist and not grow.
Theories of Entrepreneurship
1. Economic Theory
2. Leibenstein’s X Efficiency Theory
3. Dynamic Entrepreneurship Innovation Theory
4. Harvard School Theory
5. Theory of High Achievement
6. Theory of Change
7. Theory of Profit
8. Theory of adjustment of price
9. Theory of market
10. Theory of social change
11. Theory of entrepreneurial supply
12. Theory of personal resourcefulness
13. Theory of Cultural Values.
Theories of Entrepreneurship
1. Economic Theory: by Mark Casson. According to
this theory demand for entrepreneurship depends
upon the need for change and the supply of
entrepreneurs is limited on account of scarcity of
personal qualities and difficulties in identifying them.
2. Leibenstein’s X Efficiency Theory : X efficiency
refers to the degree of inefficiency in the use of
resources within a firm. X efficiency arises
because the firm’s resources are used in the
wrong way leading to wastage. The role of the
entrepreneur is to make resources available in
such a way as to improve efficiency.