Entrepreneurship Notes, Meaning of Entrepreneur, Concept of Entrepreneurship, Evolution of Entrepreneurship, Difference Between Manager and Entrepreneur, Functions of Entrepreneur, Characteristics of Entrepreneur, Types of Entrepreneur, Intrapreneur and Intrapreneurship, Difference Between Entrepreneur and Intrapreneur, Development of Entrepreneurship, Roles of Entrepreneur in Economic Development, Entrepreneurship in India, Barriers of Entrepreneurship.
Meaning of an Entrepreneur
An entrepreneur is one who always searches for changes, responds to them and exploits it as an opportunity. - Peter Drucker
An entrepreneur is the one who innovates, raises money, assembles, inputs, chooses managers and sets the organization going with his ability to identify them - Vasant Desai
Concept of Entrepreneurship
Work carried out or the character shown by an entrepreneur is entrepreneurship.
Entrepreneurship is the process of creating something new and assuming the accompanying risk and rewards. - Robert Hisrich
Entrepreneurship is a behaviour that includes:
- Initiative taking
- Organizing social and economic forces to convert resources and situations to practical good.
- The acceptance of risk or failure.
Evolution of the concept of "Entrepreneur"
The term Entrepreneur is derived from the French word "Entreprendre" which means "to undertake".
Evolution
- Middles Ages - Actor or person in charge of large-scale production.
- 16th Century - People who organized and led military expeditions in France.
- 17th Century - A person bearing the risk of either profit or loss in a fixed-price contract with the government.
- 18th Century - A person who takes risks and is different from the one who supplies capital.
- 19th Century - Person distinct from both financier and manager.
- 20th Century - Innovator and Risk taker.
Difference Between 'Manager' and 'Entrepreneur'
| Difference Between 'Manager' and 'Entrepreneur' | ||
| Point | Entrepreneur | Manager |
| Motive | Business Startup | Provide Service |
| Status | Owner | Employee |
| Risk Bearing | Risk taker | Risk-averse |
| Reward | Profit | Salary |
| Innovation | Change Agent | Works and Executes plans prepared by the entrepreneur |
| Qualification | No formal Qualification need | Formal Qualification Preferred |
Function of Entrepreneur
3 Categories
- Entrepreneur as an Innovator
- Entreprenuer as a Risk Taker
- Entrepreneur as an Organizer
Entrepreneur as an Innovator - 5 Functions
- Introduction of new product in the market
- Introduction of a new method of production
- Opening of new market
- Discovery of a new source of supply of raw materials
- Carrying out a new form of Organization
Entrepreneur as Risk Taker - 5 Functions
- Assumes all possible risks of business
- Buys all that is necessary to make finished goods
- Has to bear uncertainty
- Tries to reduce risk by combining experience, foresight and professional help
- Tries to reduce uncertainties by his initiative skill and good judgment
Entrepreneur as an Organizer - 3 Functions
- Raise Sufficient Capital
- Plan, delegate and Execute all facets of business
- Manage and distribute his profits wisely
Characteristics of Entrepreneur
- Effective Communicator
- Negotiating Skills
- Total Commitment, Time Management, Tactical, Team Man
- Risk-taking ability, Responsible, Resourceful
- Emotional Stability, Ethical
- Problem Solving, Patience, Passion, Perseverance
- Relations, Realistic, Result Oriented
- Energetic, Endurance
- Networking Ability
- Excellence in Economics
- Understands how to administer and Organize, Unambiguous
- Real Innovator
Types of Entreprenuer
Classified Based on Some Criteria
Types of Entrepreneurs - According to the stage of Economic Development
1. Innovative Entreprenuer
- New Product, New Technique, New Market, Re-organize the Organization
- Aggressive in experimentation and seizing opportunities
- Convert possibilities into practice
- Raise money to start an enterprise, choose employees
2. Imitative Entreprenuer or Adoptive Entreprenuer
- Adopt or copy successful entrepreneur
- Imitate Technique, technology, etc
- Found in developing countries
3. Fabian Entrepreneur
- Very cautious and sceptical about any changes
- Do not introduce changes or adopt new methods innovated by others unless pushed to the wall
- Do not introduce changes or adopt new methods innovated by others unless pushed to the wall
- Drove by custom, religion, tradition, and past practices
- Then bring in changes only when it's the question of survival
Drone Entrepreneur
- Highly resistant to changes
- Refuse to adopt, imitate or make changes in production methods
- Choose to sing rather than imitate or bring changes
- May even suffer from loss but prefer to stick to traditional ways
Types of Entrepreneurs - According to types of Business
- Business Entrepreneur
- Trading Entrepreneur
- Industrial Entrepreneur
- Corporate Entrepreneur
- Agricultural Entrepreneur
- Retail Entrepreneur
- Service Entrepreneur
Types of Entrepreneurs - According to the use of technology
- Technical Entrepreneur
- Non-Technical Entrepreneur
- Professional Entrepreneur
- High-tech Entrepreneur
- Low-Tech Entrepreneur
Types of Entrepreneurs - According to the area
- Urban Entrepreneur
- Rural Entrepreneur
Types of Entrepreneurs - According to gender and age
- Men Entrepreneur
- Women Entrepreneur
Intrapreneurs - an emerging class
Gifford Pinchot -III
- Large corporations should create smaller systems within the organization and allow certain executives to operate like entrepreneurs.
- Ambitious executives should be provided with adequate financial resources and autonomy necessary for the development and application of their ideas.
- Intra-corporate or Intrapreneurs would introduce new products, services and processes which enable the company to grow and succeed in a changing environment.
Difference Between Entrepreneurs and Intrapreneurs
| Entrepreneur | Intrapreneurs |
| An Entrepreneur is an independent businessman. | An intrapreneur is a semi-independent businessman. |
| He bears full risks of the business he develops and operates. | He does not fully bear the risk of the business he operates. |
| He himself raises the necessary capital from various sources and guarantees its return to the suppliers. | He neither raises the capital himself nor guarantees any return to the suppliers. |
| He operates from outside the organization | He operates from within the organization |
| An entrepreneur might find it difficult to totally withdraw from his business. | An Intrapreneur finds it relatively easier to totally withdraw from his business |
Development of Entrepreneurship
4 Stages
- Identification and evaluation of the business opportunity
- Development of the business plan
- Determination of the resources required
- Creation and actual management of the enterprise
Identification and evaluation of the business opportunity
- identify opportunities and possibilities that arise in the market from time to time.
- Should analyse - 1. The real and perceived value of opportunities, 2. Risk and returns of opportunities.
Development of the business plan
- Description of the future direction of the business.
- Formulates all plans with respect to marketing, finance, production, organization and operations.
Determine the resources required
Good idea about various resources required with respect to the quality, quantity, prices and sources.
Creation and actual management of the business
- Should be aware of legal and practical hurdles.
- Should anticipate potential problems and possible solutions.
Role of Entrepreneur in Economic Development
- Create a business organization by mobilizing the savings of the public.
- Provide large-scale employment.
- Promote industrialization in local areas.
- Equitable distribution of wealth and income.
- Reduce over-dependence on Agricultural by rural people.
- Encourage learning and usage of skills.
- Increase Forex reserves of the country by exporting their goods and services.
- Are change agents
- Become icons and inspire a whole new breed of young entrepreneurs.
Entrepreneurship in India
- Metal Handicrafts
- Kharkhanas, Guilds - associations that produce and sell Handicrafts and other goods.
- Indian Handicrafts like Corah(Bengal), Dupattas and dhotis(Ahmedabad). Chintzes (Lucknow), Shawls(Kashmir), Metalware(Varanasi) so on have enjoyed worldwide reputation.
- In the modern era, the first trace of entrepreneurship was seen during the domination of the British East India company. Parsi entrepreneurs like Lowjee-Nushirwan and Manjee Dhanjee built ships and produced gunpowder.
- Ranchod Lal Chotalal - first Indian to think of setting up a textile manufacturing unit in 1847, Succeed in 1861,
- Cowasjee Nanaghoy Davar - Started textile mill in Bombay in 1854.
- Jamshedjee Tata - Established the first steel industry in Jamshedpur in 1911.
- Birla Family - Established jute mill in 1919.
- The Swadeshi Campaign - Gave the first wave of entrepreneurial activity in India.
- Indian Entrepreneurs could not succeed because of high taxes, low productivity, the black market, monopolies, etc.
- Dhirubhai Ambani and Karsanbhai Patel - Overcame many obstacles to sow the seeds of their empire.
- After 1991, Azim Premji, N.R. Narayana Murthy, Subhash Chandra, etc - came on Scene
- In the 21st Century, Indian Entrepreneurs are conquering the world.
Barriers to Entrepreneurship
- Environmental Barriers
- Financial Barriers
- Personal Barriers
- Societal Barriers
Environmental Barriers
- Raw Materials
- Labour
- Machinery
- Land, Building Infrastructure
Financial Barriers
- Lack of finance
- Lack of Will and Strength
Personal Barriers
- Lack of Self-confidence
- Lack of Motivation
- Lack of Patience
- Inability to invest and innovate
Societal Barriers
- Religious
- Conservative Attitudes
- Communism
