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Unit-1

Introduction

Who is an Entrepreneur?

An entrepreneur is someone who has an original idea

and is able to change that idea into a business opportunity and

make it work

One who starts his own business

One who creates a new business in the face of

risk and uncertainty for the purpose of achieving profit

and growth by identifying opportunities and assembling

the necessary resources to capitalize on them.Evolution of Concept and Entrepreneurial personality

The word entrepreneurs is derived from the French

verb entreprendre. It means to undertake it originally means

that to designate an organize of musical or other entertainments.

As per Peter Drucker- An entrepreneur is one who

always searches for change, responds to it as an opportunity.

Entrepreneurs innovate. Innovation is a specific instrument of

entrepreneurship.

Oxford dictionary in 18 the director or a manager of a

public musical institution, one who gets up entertainment,

especially musical performance. In it the early 16th century

entrepreneur was applied to those who were engaged in military

expeditions. In the 17th century it was considered as to cover

civil engineering activities such as construction and notification. It

was only in 18th century the word entrepreneur was used to

cover economic aspects. The term entrepreneur is used in

various ways and terms.

The views are broadly classified in three ways.

Risk bearer

Organizer and

Mrs.A.Padmapriya M.B.A,M.A,M.Phil,UGC-NET(PhD)/CCET Page 1

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Innovator

1. Risk Bearer:

In 18th century Richard Cantillon an Irish man living inFrance, was first used entrepreneur and defined as An agent who

buys factors of production at certain prices in order to combine

them in to a product with a view entrepreneurs are risk bearing

agents of product. Knight also described entrepreneur to be a

specialized group of persons who bear uncertainty. Uncertainty

can be defined as a risk which cannot be in insured against and is

incalculable.

2. As an Organizer:

Jean Baptiste says One who combines the land of one

the labour of another and capital of yet another and thus

produces a product. By selling the product in the market he pays

interest on capital, rent on land wages to laborers and what

remains is his/her profit. Thus he made a clear distinction

between the role of capitalist as a financed and entrepreneurs as

a organizer.

3. As an Innovator:

Joseph A Schumpeter in 1934 in his book theory of

economic development he says economic development as a

discrete dynamic change brought entrepreneur by instituting new

combination of production i.e, .innovations. According to him

introduction of new product may occur in any of following five

norms:

1. Introduction of new product in the market

2. The instituting of new production technology which is not yettested by experience in the branch of manufacture.

3. Opening of new market into which the specific product has not

previously entered.

4. The discovery of new source of supply raw material


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5. The carrying out of the new form of organization of any

industry by creating of monopoly position or the breaking of it.

1individual who, rather than working as an employee, runs a

small business and assumes all the risk and reward of a given

business venture, idea, or good or service offered for sale. Theentrepreneur is commonly seen as a business leader and

innovator of new ideas and business processes.

The attributes underlying entrepreneurship include:

_ Self-direction

_ Self-nurturing

_ Action-oriented

_ High energy level_ Tolerant of uncertainty

Entrepreneurship as a Career.

Entrepreneurship can play a major role in alleviating

poverty, unemployment and underemployment in many

developing countries. Entrepreneurship is becoming an

increasingly popular alternative career choice in the current

economic slowdown. If you are planning to become an

entrepreneur you will not be alone and will have plenty ofcompany.

Many have gone the entrepreneur route due to external

factors including layoffs, frustration in their current workplace

culture, or the need for greater flexibility in their lives. However,

it is most important to go with your own "internal factors," which

include passion, wanting to be independent, wanting to

accomplish, building an enterprise, enjoying freedom, a burning

desire to make a profession out of a hobby and enjoying thechallenges.

Positive aspects of entrepreneurship

Being the boss if his own business, he enjoys unlimited

powers.


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He can do things in his own way and he need not take

orders from someone else.

He can make his own decisions and act on them.

There are numerous opportunities for his self- development. Working on ones own and thus getting rewards yields

immense satisfaction and pleasure for more than what he

can get in a job.

Monetary rewards can be more than commensurate with his

capacity and capabilities.

He can command deference and respect of his immediate

family and friends. It is a kind of intangible reward.

Instead of depending on others, he generates employment

for others.

He can make significant contribution to the development of

the country and be proud of taking part in nation building

activities.

He can be a great achiever realising his goals and proving

his achievements to the world. He can be recognised for his

outstanding efforts.Negative aspects

Though an entrepreneur is his own boss, in some respects

he is not. It is so because he is constrained by various

people like his financiers, labourers, suppliers, customers

and so on.

He may have to face frustration since the scope of his

operations is limited by his limited resources.

He has to work long and hard hours from morning to dusk

and his venture tends to absorb all his energy and time.

This may affect his social and family life.


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At times he may have to face disappointments and

frustrations since everything in his venture may not always

work the way he would like it to.

He has to always work with tension since there is always the

risk of failure.

Entrepreneurship as a Career Option?

The greatest challenge before the youngsters in India

today is to build the country into an economic global giant. The

obvious questions that come to the minds of most of them are -

"Why should we in India think of being an entrepreneur? Why not

work as part of a larger organisation where the opportunities and

resources to scale ideas are perhaps far greater?

Entrepreneurship is important for two reasons. One, it

furthers innovation to find new solutions to existing and emerging

demands. Two, it offers far greater opportunities for wealth

creation for self and the society than anything else.

Entrepreneurship has its challenges. It is about 20 per cent luck

and 80 per cent effort, clarity, courage, confidence, passion and

above all smartness.

What leads a person to take up entrepreneurship as a

career option? There can be a number of reasons including

displacement from a job, frustration in the present job, not

getting a job of his/her choice, etc. Sometimes a person realizes

much in advance that his/her job is in jeopardy, as the

organization is moving towards closure. At times a deserving

employee getting superseded in promotion is compelled to quit

the job and look for doing something on his own. Some people

object to a system wherein reward is often based on seniority

rather than merit.

Characteristics of an Entrepreneur:

The features of successful entrepreneurs are:

1. Hard work:


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Willingness to work hard differentiates a successful

entrepreneur from unsuccessful one. The entrepreneur with his

teious saeat-filled hours and perseverance revive their business

even from on verge of failure.

2. Desire for high achievement

The entrepreneurs have strong desires to achieve

high goals in business.

3. Highly optimistic

The successful entreoreneurs are not disturbed by

the present problems faced by them. They are highly optimistic

for future that the situations will become favourable to business

in future.

4. Independence

One of the common characteristics of the successful

entrepreneurs has been that they do not like to be guided by

others and to follow their routine.

5. Foresight

The entrepreneurs have a good foresight to know about

future business environment. They visualize the changes in

market conditions, consumers, and technology developments.

6. Good organizer

Different resources required for production are

divorced from each other.It is the ability of the entrepreneurs that

brings together all resources required for starting up an

enterprise and then to produce goods.

7. Innovation

Production is meant for meant to meet customersrequirements.In view of the changing taste of customers from

time to time the entrepreneurs initiate research and innovative

activities to produce goods to satisfy the customers changing

demand for the products.

8. Capacity to take risk


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9. Mobility and drive

10. Creative Thinking.

11. Strong need for achievement

12. Ability to Marshall resources13. High degree of ambition

14. Will to prove superior to others.

Functions of Entrepreneurs:

An entrepreneur does perform all the functions

necessary right from the genesis of an idea upt the establishment

of an enterprise. These can be listed in the following manner:

1. Idea generation and scanning of the best suitable idea.

2. Determination of the business objectives.

3. Product analysis and market research

4. Determination of form of ownership/ organization

5. Completion of promotional formalities

6. Raising necessary funds.

7. Procuring machine and material

8. Recruitment of men.

9. Undertaking the business operations.

The functions of entrepreneurs can be also classified as

under:

1. Risk bearing

2. Organization

3. InnovationClassification of Entrepreneurs(Types)

The entrepreneurs have been broadly classified according to,

Types of business

Use of professional skill


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Motivation

Stages of development

1. Entrepreneurs According to Types of Business

Business entrepreneursare those individuals for anew product or service and then translate the same into business

reality. Tap both production and marketing resources to develop

a new business opportunity. Setup big establishment or small unit

such as printing press, textile processing house, advertising

agency, readymade garments or confectionery.

Trading entrepreneur: Undertakes trading activities;

concerned with marketing (Domestic and international level)

Industrial entrepreneursare essentially a manufacturerwho identifies potential needs of customers and products or

service to meet the marketing needs. He should have the ability

to convert economic resources and technology into a profitable

venture. Undertakes manufacturing activities only; new product

development etc (textile, electronics, etc)

Corporate entrepreneur is an individual who

demonstrates his innovative skill in organizing and managing

corporate undertaking. He plans, develop and manage a

corporate body. Interested in management part of organisation;

(Ambani, Tata families)

Agricultural entrepreneur are the ones who undertake

agricultural activities such as raising and marketing of crops,

fertilizers and other inputs of agriculture. They are motivated to

improve agriculture through mechanization, irrigation, and

application of technologies for dry land agricultural products.

2. Entrepreneurs in Technology

Technical entrepreneur is the one who is essentially a

craftsman. He develops improved quality of goods because of his

craftsmanship. He concentrates more on production than on

marketing. He demonstrates his innovative capabilities in matter

of production of goods and rendering of services.


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Non- technical entrepreneur are those who are not

concerned with the technical aspects of the product in which they

deal. They are concerned only with developing alternative

marketing and distribution strategies to promote their business.

Professional entrepreneuris interested in establishing abusiness but does not have interest in managing or operating it

once it is established. He sells out the running business and

starts another venture with the sales proceeds. (Uses the

proceeds from sale of one business to start another one.

Brimming with ideas to start new ventures)

3. Entrepreneur and Motivation

An entrepreneur is motivated to achieve or prove his

excellence in job performance. He influences others by

demonstrating his business acumen.

Pure entrepreneuris an individual who is motivated by

psychological and economic rewards. He undertakes

entrepreneurial activity for his personal satisfaction in work, ego

and status.

Induced entrepreneuris one who is induced to take up

an entrepreneurial task due to policy measures of the

government that provides assistance, incentives, and

concessions and other facilities to start a venture. Enter business

due to financial, technical and other facilities provided to them by

the state agencies to promote entrepreneurship.

Motivated entrepreneur:they come into being because

of the challenge involved in developing and marketing a new

product for the satisfaction of consumers. If the productsucceeds, the entrepreneur is further motivated for launching of

newer products.

4. Entrepreneur and Stages of Development


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First generation entrepreneuris the one who starts an

industrial unit by his innovative skill. He is the one who combines

different technologies to produce a marketable product or

services.

Modern entrepreneur is one who undertakes thoseventures which go well with the changing demand in the market.

He undertakes those ventures that suit the current market needs

Classical entrepreneur is one who is concerned with

maximizing the economic returns at consistent level. He is

concerned more about the survival of the firm with or without an

element of growth. Apart from the above, there are

entrepreneurs who can be classified into innovative and imitative

categories.Others

Area-Rural and Urban entrepreneur

Gender-Age Men and Women entrepreneur

Scale -Small and Large scale entrepreneur

5. Clarence Danhof, have classified the entrepreneurs as

follows:

1. Innovating Entrepreneurs:

An innovating entrepreneur is one who introduces new

goods, inaugurates new method of production, discovers new

market and reorganizes the enterprise.

2. Imitative Entrepreneurs:

These are characterized by readiness to adopt successful

innovations inaugurated by innovating entrepreneurs. Imitative

entrepreneurs do not innovate the changes themselves, they only

imitate techniques and technology innovated by others.

3. Fabian Entrepreneurs:

Fabian entrepreneurs are characterized by very great

caution and skeptic in experimenting any change in their

enterprises. They imitate only when it becomes perfectly clear


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that failure to do so would result in a loss of the relative position

in the enterprise.

4. Drone Entrepreneurs:

These are characterized by a refusal to adopt opportunities

to make changes in production formulae even at the cost of

severely reduced returns relative to other like producers. Such

entrepreneurs may even suffer from losses but they are not

ready to make changes in their existing production methods.

Following are some more types of entrepreneurs listed by

some other behavioral scientists:

i. Solo operators:

These are the entrepreneurs who essentially work alone andit needed at all, employ a few employees. In the beginning most

of entrepreneurs start their enterprise like them.

ii .Active partners

Active partners are those entrepreneurs who start/carry

on an enterprise as a joint venture. It is important that all of them

actively participate in the operations of the business.

iii. Inventors:

Such entrepreneurs with their competence and inventiveness

invent new products. Their basic interest lies in research and

innovative activities.

iv. Buyers

These are those entrepreneurs who do not like to bear much

risk. Hence, in order to reduce risk involved in setting up a new

enterprise, they like to buy the ongoing one.

v. Life timers:These entrepreneurs take business as an integral part of

their life. Usually, the family enterprise and businesses which

mainly depend on exercise of personal skill fall in this

type/category of entrepreneurs.


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Distinction between an Entrepreneur and a Professional

Manager:

A professional manager is one who specializes in the work of

planning, organizing, leading and controlling the efforts of others

by the systematic used of classified knowledge and principles.Both managers and entrepreneurs are answerable for producing

results.

Both have to produce results through people working with

them though they deal with different sets of people. Both are

decision makers but the decisions are different as their tasks

vary. Both have to operate under constraints which are

understandably different. To be effective in their respective roles,

both have to follow sound principles of management like

planning, staffing, delegation and control.

Difference between Entrepreneur & Manager


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Points Entrepreneur Manager

Motive The main motive of an

entrepreneur is to start a

venture by setting up of an

enterprise. He standards

the venture for his

personal gratification.

Here, the motive of manager is

to render his services in an

enterprise already set up by

entrepreneur

Functions The major functions of an

entrepreneur are risk

bearing, organizing and

innovation.

The major functions of a

manager are planning,

organizing, staffing, directing,

controlling and other such

managerial functions.

Status An entrepreneur is the

owner of the enterprise

A manager is the servant in

the enterprise owned by the

entrepreneur.

Risk

bearing

An entrepreneur being the

owner of the enterprise

assumes all the risks and

uncertainty involved in

running the enterprise

A manager as a servant does

not bear any risk involved in

the enterprise

Rewards The reward of theentrepreneur is profit

which is highly uncertain.

A manager gets salary asreward for the services

rendered by him in the

enterprise. The salary is

certain and fixed

Innovation Innovation Entrepreneur

himself thinks over what

and how to produce goods

to meet the changing

demands of the

Customers. Hence, he acts

as an innovator also called

a change agent.

A manager simply executes

the plans prepared by the

entrepreneur. Thus, a manager

simply translates the

entrepreneurs ideas into

practice.

Qualificatio

n

An entrepreneur needs to

possess qualities and

qualifications like highachievement motive,

A manager needs to posses

distinct qualifications in terms

of sound knowledge inmanagement theory and

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Entrepreneur and Entrepreneurship

The process undertaken by an entrepreneur to augment his

business interests gave birth to ENTREPRENEURSHIP.

The entrepreneurship is the elusive concept. Many others

defined it in many ways such as risk bearing, innovating, and

thrill-seeking. Lets see some definitions.

In the opinion of A. H Cole:

Entrepreneurship is the purposeful activity of an individual

or a group of associated individuals, undertaken to initiate,

maintain or aggrandize profit by production or distribution of

economic goods and services.

Entrepreneurship is the process undertaken by anentrepreneur to augment his business interests. It is an exercise

involving and creativity that will go towards establishing hi/her

enterprise.

Characteristics of Entrepreneurship

1. Accepting challenges

2. Decision making

3. Risk-taking

4. Innovation

5. Organization

6. Skilful management

7. Making the enterprise a success

Relationship between Entrepreneur and the

EntrepreneurshipEntrepreneur -

Entrepreneurship

Person Process

Organizer Organization


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Risk-bearer Risk bearing

Motivator Motivation

Creator Creation

Visualiser Visualisation

Leader leadership

Imitator Imitation

Intrapreneur

Meaning

A new breed of entrepreneurs is coming to the fore in large

industrial organizations. They are called intrapreneurs. They

emerge from within the confines of an existing enterprise. In big

organizations, the top executives area encouraged to catch hold

of new ideas and then convert these into products through

research and development activities within the framework of

organization. The concept of Intrapreneurship has become very

popular in developed countries like America.

It was Gifford Pinchot III, an American Management expert,who used the term intrapreneur for the first time in 1983.

A person within a large corporation who takes direct

responsibility for turning an idea into a profitable finished product

through assertive risk taking and innovation .

Intrapreneurs have entrepreneurial skills blended with

managerial skills but operate within the confines of an

organization.

"Intrapreneurship refers to employee initiatives in

organizations to undertake something new, without being asked

to do so". This Intrapreneurfocuses on innovation and creativity

and who transforms a dream or an idea into a profitable venture,

by operating within the organizational environment. Thus,


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Intrapreneurs are inside entrepreneurs who follow the goal of the

organization.

Differences between Entrepreneur and Intrapreneur

Points Entrepreneur Intrapreneur

Ownership entrepreneur is the owner

of the organization

An intrapreneur is an

employee of the enterprise

Status An entrepreneur is

independent in his status

An intrapreneur is

dependent on his

employer or owner

Raising of

capital:

an entrepreneur raises the

required capital for his

business

An intrapreneur does not

raise the capital

Risk An entrepreneur bears the

risk involved in his

business

An intrapreneur does not

bear any risk involved in

his business

Operations. An entrepreneur operates

in his business from

outside

An intrapreneur operates

from within his business

organization

Guarantee An entrepreneur gives An intrapreneur does not


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of

payment

guarantee of payment of

money to the lenders

required to do so

Conventionof

new ideas

An entrepreneur convertshis new ideas or high

intrapreneurs ideas into

reality.

An intrapreneur has onlyto create his new ideas but

he cannot convert them on

his own account.

Importance of EntrepreneurshipThe importance of entrepreneurship to any economy is like

that of entrepreneurship in any community. Entrepreneurial

activity and the resultant financial gain are always of benefit to a

country. If you have entrepreneurial skills then you will recognize

a genuine opportunity when you come across one.

Now the reasons why entrepreneurship holds a dominant

position in the society? The following reasons are responsible for

the same:1) Provides employment to huge mass of people:

People often hold a view that all those who do not get

employed anywhere jump into entrepreneurship, a real contrast

to this is that 76% of establishments of new business in the year

2003 were due to an aspiration to chase openings. This

emphasizes the fact that entrepreneurship is not at all an

encumbrance to an economy. Whats more is that approximately

34 million of fresh employment opportunities were created byentrepreneurs from the period of 1980. This data makes it clear

that entrepreneurship heads nation towards better opportunities,

which is a significant input to an economy.

2) Contributed towards research and development

system:


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Almost 2/3% of all innovations are due to the

entrepreneurs. Without the boom of inventions the world would

have been a much dry place to live in. Inventions provide an

easier way of getting things done through better and

standardized technology.3) Creates wealth for nation and for individuals as well:

All individuals who search business opportunities

usually, create wealth by entering into entrepreneurship. The

wealth created by the same play a considerable role in the

development of nation. The business as well as the entrepreneur

contributes in some or other way to the economy, may be in the

form of products or services or boosting the GDP rates or tax

contributions. Their ideas, thoughts, and inventions are also agreat help to the nation.

4) Sky scraping heights of apparent prospects:

The individual gets maximum scope for growth and

opportunity if he enters into entrepreneurship. He not only earns,

the right term would be he learns while he earns. This is a real

motivating factor for any entrepreneur as the knowledge and

skills he develops while owning his enterprise are his assets forlife time which usually, lacks when a person is under

employment. The individual goes through a grooming process

when he becomes an entrepreneur. In this way it not only

benefits him but also the economy as a whole.

5) It is a challenging opportunity for the people:

Although entrepreneurship is a challenging task but in

most of the cases the rewards it gives are much more than what

one anticipates. It does not only reward an entrepreneur atfinancial levels but also on individual level. It provides self

satisfaction to the entrepreneur.

6) Entrepreneurship provides self sufficiency:

The entrepreneur not only become self sufficient but also

provide great standards of living to its employees. It provides


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opportunity to a number of people working in the organization.

The basic factors which become a cause of happiness may be

liberty, monetary rewards, and the feeling of contentment that

one gets after doing the job. Therefore the contribution of

entrepreneurs makes the economy an improved place to live in.Drawbacks of Entrepreneurship

Uncertainty of income

Risk of losing your entire investment

Long hours and hard work

Lower quality of life until the business gets established

_High levels of stress

_Complete responsibility

_Discouragement

Ten Deadly Mistakes of Entrepreneurs

1. Management mistakes

2. Lack of experience

3. Poor financial control

4. Weak marketing efforts5. Failure to develop a strategic plan

6. Uncontrolled growth

7. Poor location

8. Improper inventory control

9. Incorrect pricing

10. Inability to make the entrepreneurial transition

Role of entrepreneurship in economic development:

Economic development means the process of upward

change; thereby the real per capita income of a country increases

over a period of time. Entrepreneurship plays a very important

role in economic development. It serves as a catalyst in the

process of industrialization and economic growth.


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According to Joseph Scum peterthe rate of

economic progress of a nation depends upon its rate of

innovation which intern depends upon the distribution of

entrepreneurial talent in the population

1. Capital formation:

Entrepreneurs encourage or mobilize the idle savings of the

public through the issue of various securities like equity shares,

preference shares, public deposits, debentures, etc. Even in case

of sole proprietary concerns an entrepreneur helps in capital

formation by way of using ones own and others idle funds. High

rate of the over all economic growth

2. Generation of employment:

Entrepreneurs create employment both directly and

indirectly. It is not always possible for the government to provide

employment to eligible individuals. It is the industries and

business houses, which generate employment opportunities. An

entrepreneurial venture creates employment, not only for the

entrepreneur but for a few others also. Apart from the direct

employment, thus created indirect employment is also

encouraged because of backward and forward linkages.

3. Improvement in per capita income:

They help to increase the gross national product [GNP] and

the per capita income, which is an important yard stick for

measuring economic development.

4. Important in standard of living:

Entrepreneurial activities result in creation of income and

wealth for the entrepreneur family and at the same time such

ventures remove the scarcity for commodities by way of

introducing innovative products and services.

5. Economic independence;

Entrepreneurs help in the manufacture of indigenous

substitutes for certain imports, thereby encouraging economic

independence.


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6. Balanced regional development:

By encouraging people to take up entrepreneurial ventures

for lively hood brings about a balanced regional development

specially when such ventures are set-up in economically

backward regions. The government offers a member of incentivesto entrepreneurs establishing ventures in remote and backward

regions.

7. Backward and forward linkages:

An industries establishment has various backward, forward

linkages.

Ex: Establishment of steel plant generators several ancillary

units and expands the demand for iron ore and coal. This is a

backward linkage.

At the same time the plant encourages the growth of the

machine, building, manufacture of tools and implements and

such other units, which make use of an increase supply of steel.

This is a forward linkage. Therefore entrepreneurial activities

initiate change and create a chain reaction with several links.

Entrepreneurial competencies (or Qualities, or Traits)

A competence is an underlying characteristic of

persons, which results in effective and /or superior

performance in a job. A job competence is an underlying

characteristics of a person, in that it may be motive ,traits,

skills ,aspect of ones self-image a body of knowledge ,set of skills

and cluster of appropriate motives/ traits that an individual

possess to perform a given task.

The knowledge of entrepreneurial competence has

been sharpened over the last 3 decades. The following is a list ofmajor competencies that contribute towards top performance.

1. Initiative:

Takes action that goes beyond job requirements or the of

the situation.


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Does things before being asked or forced to by events.

Acts to extend the business into new areas, products, or

service.

2. Sees and acts on opportunities: Looks for and action on opportunities. sees and acts on

opportunities (business, educational or personal growth).

Seizes unusual opportunities to obtain financing

equipment, land, work space or assistance.

3. Persistence:

Takes repeated action to overcome obstacles that get in

the way of reaching goals.

Takes repeated or different action to overcome obstacle.

Takes action in the face of a significant obstacle.

4 Information seeking:

Takes action on own to get information to help reach

objectives or clarify problems.

Does personal research on how to provide a product or

service. Consults experts for business or technical advice.

5. Concern for quality of works:

Acts to do things that meet or beat existing standards of

excellence.

States a desire to produce work of high quality.

Compares own work or own companys work favorably to

that of others.

6. Commitment to work contract:

Acts to do things that place the highest priority on getting a

job completed.


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Accepts full responsibility for problems in completing a job

for others.

Pitches in with workers or works in their place to get the job

done.

Expresses a concern for satisfying the customer.

7. Efficiency orientation :

Finds ways to do things faster or with fewer resources or at

a lower cost.

Looks for or finds ways to do things faster or at less cost

Uses information or business tools to improve efficiency.

Expresses concern about costs .

Benefits of some improvements, change, or course of

action.

8. Systematic planning:

Develops and uses logical , step-by-step plans to reach

goals.

Plans by breaking a large task down into sub-tasks.

Develops plans that anticipate obstacles.

Evaluates alternatives.

Takes a logical and systematic approach to activities.

9. Problem solving:

Identifies new and potentially ideas to reach goals.

Switches to an alternative strategy to reach a goal.

Generates new ideas or innovative solutions.

10. Self-confidence:

Has a strong belief in self and own abilities

Expresses confidence is own ability to complete a task or

meet a challenge.


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Sticks to own judgment in the face of opposition or rarely

lack of success.

Does something that he says is risky.

11. Assertiveness: Confronts problems and issues with others directly.

Tells others what they have to do.

Reprimands or disciplines those failing to perform as

expected.

12. Use of influence strategies:

Uses a variety of strategies to influence others. Acts to

develop business contacts. Uses influential people as agents to accomplish own

objectives. Selectively limits the information given to

others.

14. Monitoring:

Develops or uses procedures to ensure that work is

completed or that work gets standards or quality.

Personally supervises all aspects of a project.

15. Concern for employee welfare:

Takes action to improve the welfare of employees.

Takes positive action in response to employees personal

concerns.

Express concern about the welfare of employees.

Developing Entrepreneurial Competencies:

Entrepreneurial competencies can be developed by

understanding what a particular competence when, someone else

exhibits the same.


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Having understood a given competence and having been

able to recognize the same when someone else exhibits, the next

step is to find out where one stands with respects to a given

competency. self rating questionnaire may be used to

understand ones level of competencies and those that are not apart of ones personality but one would like to acquire those

competencies and strengthen others. Any new behavior one

acquires would basis in various activities

Approaches to Entrepreneurship Development

Commonly adopted approach to entrepreneurship

development is Training. (training, incentives, consultancy

services etc)

4 Major Approaches

1. Develop and arrange course content

2. Choosing training methods

3. Decide Subject area, trainee population, materials etc.

4. Achieve training objectives

Factors Affecting Entrepreneurial Growth

1. Economic factors

a) Lack of adequate overhead facilities:

Profitable innovations require basic facilities like

transportation, communication power supply etc. They reduce

cost of production and increase profit.

b) Non availability of capital

Inventions are capital oriented. In less developed countries

most capital equipment have to be imported which involves

foreign exchange which acts as a difficult problem.

c) Great risk

Risk is high in case of less developed countries as there is

lack of reliable information, markets for good and services is

small etc.


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d) Non availability of labor and skills

Though there is abundant labor supply there is generally

scarcity of skills at all levels.

2. Social factors

A society that is rational in decision making would be

favorable for decision making. Education, research and training is

given less importance in less developed countries therefore there

is very little vertical mobility of labor.

3. Cultural factors

Religious, social and cultural factors also influence the

individual taking up an entrepreneurial career, in some countries

there is religious and cultural belief that high profit is unethical.This type of belief inhibits growth of entrepreneurship.

4. Personality factors

In less developed countries the entrepreneur is looked

upon with suspicion. Public opinion in the less developed nations

sees in the entrepreneur only a profit maker and exploited.

5. Motivation

Motivation is the act of stimulating someone or oneself to get

a desired course of action, to push the right button to get the

desired results.

Factors Influencing Entrepreneurship

The emergence of entrepreneurs in a society depends upon

closely interlinked social, religious, cultural, psychological, andpolitical and economic factors.

Family tradition:

Individuals who for some reason, initiate, establish maintain

and expand new enterprises generate entrepreneurship in

society. It is observed that entrepreneurs grow in the tradition of


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their families and society and accept certain values and norms

from these sources.

Religious, social and cultural factors:

Religious, social and cultural factors also influence the

individual taking up an entrepreneurial career, in some countries

there is religious and cultural belief that high profit is unethical.

This type of belief inhibits growth of entrepreneurship.

Psychological factors:

The psychological factors like high need for achievement,

determination of unique accomplishment, self confidence,

creativity, vision, leadership etc, promote entrepreneurship

among individuals. On the other hand psychological factors like

security, conformity and compliance, need for affiliation etc

restrict promotion of entrepreneurship.

Political factors:

The political and also the political stability of country

influence the growth of entrepreneurship. The political system,

which promotes free market, individual freedom and private

enterprise, will promote entrepreneurship.

Economic policies:The economic policies of the government and other

financial institutions and the opportunities available in a society

as a result of such policies play a crucial role in exerting direct

influence on entrepreneurship. In view of the haphazard

development of economic zones, Government is encouraging the

entrepreneurs to establish their business in backward and tribal

areas. This is primarily to arrest the migration of people from the

villages to cities and to create employment opportunities locally.

Government is promoting such development by giving incentiveslike tax holidays (both sales and income), subsidized power tariff,

raw materials, transportation cost etc

i. Individual factors (Desire to do something new, Educational

background, Occupational Background)


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ii. Environmental Factors (Political and Legal, Economical,

Technological, Social and Cultural Factors (Family Background,

Friends, Relatives and Teachers, Religions)

iii. Support Systems (The support system for developing

entrepreneurs, government has taken certain steps)

Causes of Slow Growth of Entrepreneurship In India

Entrepreneurship developed only in the beginning of the

19th century and though the base for industrialization had been

laid a century ago. The following be the main reasons, which

could be responsible for lack of initiative and entrepreneurial

spirit among the Indians.

1. Caste System: -

This decided occupation for members from each caste. The

altitudes were restrictive and therefore there were no changes

of accumulating wealth and promoting production.

2. Agriculture: -

Agriculture was the main occupation. Farmers and

cultivators were always in the clutches of the money lenders. The

zamindars, nawabs and rajahs exploited the laborers. They spent

money on enjoyment and luxury and never risked money inindustry. Banking and commercial system was also absent so

even if there were savings, they could not be utilized for

productive use.

3. Educational System:

Talented young men were prepared to take white collared

jobs or join government or professional services. Many were

attracted towards politics. The result was that very few young

men got attracted towards becoming efficient, industrialists,technicians, managers etc.

4. Colonial Rules:

The British rulers adopted discriminatory policy Rich Indian

businessman had special connections with foreign rulers and both

satisfied their self interests. Even the few insurance and banking


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services catered to the needs of some rich Indian businessman,

Britishers in India did also not encourage Industrialization.

5. Managing Agents:

There were just a handful of people who were known to be

having managerial skills. On common basis, these agents would

lend their skills to some top industries. Industrialists could not

manage their own units. They were always at the mercy of the

managing agents who filled their pockets with big chunks of the

companies profits and took full advantage of Indian industrialists

till the managing agency system was abolished in 1970.

6. Joint Family System:

Younger members of the family always depended on the

Head who never gave any kind of independence or encouraged

units other than family business ones. A number of young men

were discouraged from diversifying from family business and

doing something new and different.

7. Religious attitude:

Indians were very religious minded. They gave more time

to religion than to earning material wealth. Religion got priority

over business. Some religions even condemned excess earnings

and indulgence I in comforts. Industrial activity was, therefore,

given secondary consideration by the religious Indians.

8. Mindset:

The mindset of the average Indian was never

entrepreneurial. Our religious literature and epics told us to have

patience and to keep on working without expecting the fruits of

labor. This also killed the drive and desire to get into

entrepreneurial activities.

9. Recognition by the society:

In earlier days, the heroes India were the social reformers

and the politicians. Now it is the era of sportsmen, models and

film stars. It is sad that successful or the struggling entrepreneurs


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have never been recognized as heroes. Entrepreneurial activity

did not get due importance in the India society.

10. Family Background:

Empirical studies have shown that a good number of

entrepreneurs come from families with industrial backgrounds.

Unfortunately, only a few entrepreneurial communities in India

made entrepreneurial contribution. These communities could also

not make headway in the entrepreneurial field on account of the

colonial rule, lack of infrastructure and other facilities.

Entrepreneurship development could only take place after

independence in India

Challenges and opportunities for entrepreneurs

Challenges

Strengthening the Overall Economy

Small businesses continue to struggle in the economic

Down turn, and it will be important for policy leaders to get the

economy moving again. Small businesses will be a large part of

that, as entrepreneurs will spur new innovation and employment

in the coming years. These firms will continue to be the job

generators that we have become accustomed to. With that said,

industries will recover from the downturn in different ways, and

some industries have clearly been hit harder this time than in

past business cycles.

Taxes and Regulation

Business conditions have a fundamental impact on

entrepreneurial activity, and small business owners frequently

cite tax and regulatory policies as a concern. Moving forward, it

will be important for policymakers to consider the impact of taxes

and regulations on small business owners and would-beentrepreneurs.

Cost and Availability of Health Insurance.

Health insurance premiums have risen substantiallyin this

decade. The Kaiser Family Foundation reports that the cost of


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employee-sponsored health insurance plans has increased 119

percent since 1999. It is alsowell-documented that employees at

smaller firmsare less likely to be offered health care coverage.

Finding ways to control the cost of providing healthinsurance to

employees and increasing coverage willremain a priority for ournational and state leaders.

Attracting and Retaining a Quality Workforce.

Small businesses must compete forlabor with their larger

counterparts. This is more difficultin light of the disparity in total

compensation, especially benefits, and the result is greater

employee turnover. Demographic trends in the coming years

might also exacerbate these challenges.

Global Competition.

American businesses face competitors on a number of fronts,

both at home and abroad. The U.S. government has worked to

increase the ability of our firms to compete overseas by lowering

trade barriers. There are also some structural disadvantages that

work to make our products less competitive, and many

companies have reduced their costs by outsourcing some

processes and tasks abroad. While insourcing also exists, many of

these issuesespecially the assertion that firms are outsourcingjobsremains controversial; yet, firms argue that these are

necessary strategies for survival in a global marketplace.

Opportunities

Increased Investments in Technology and Innovation.

There are strong linkages between innovation and new firm

formation, and policymakers fully understand that risk-taking

entrepreneurs have positive impacts on regional economic

development. With many regional officials seeking the next bigthing that will drive their local and regional economies for years

to come, there is an appreciation that small businesses are

leading the way toward new inventions, processes, and products.

Such innovationsare vital to our economic growth, and they will


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provide the tools to make our economy more competitive in an

increasingly globalized marketplace.

Economic Gardening and Grooming Local

Entrepreneurs.

Proponents of economic gardening, which has

communities plow the dollars that would have been spent on

luring big businesses to their town to promote local small

businesses instead, argue that grooming existing firms can

ultimately to greater payoffs in terms of job creation.

Pursuing New Markets Overseas.

One of the strengths in our current economic climate is the

export sector, and international trade represents an opportunity

for small businesses. Historically, many small business owners

have not been proactive about trading with foreign partners.

While 28.9 percent of the known export value stemmed from

small firms, entrepreneurs have yet to fully tap the potential for

growth in the export arena.

Promoting Business Ownership among Selected

Demographic Groups.

Women and minorities have been extremely

entrepreneurial over thepast few yearsa trend that is expected

to continue.One of the driving factors for minorities has been the

influx of immigrants coming to this country. Recentstudies show

a strong connection between immigration and high-technology

entrepreneurship, suggesting enormous benefits for embracing

these new citizens. In addition, many of the veterans returning

home from Iraq and Afghanistan, are likely to devotethemselves

to entrepreneurship, as previous generations of veterans have

done. Policymakers should find ways to promote greater business

ownership among each of these groups.

Advancing Education and Training.


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Education and training are important as there arestrong

linkages between entrepreneurship and humancapital. Moreover,

small business owners devote significant resources to training

their workforce. These firms are able to increase their labor

productivity and reduce their labor turnover. In this way, smallbusinessowners should look at education not just as ameans of

retraining their workers, but also as methods of building new

skills, developing new human talent, and preserving employee

morale. Failure to do so might result in a reduced competitive

positionfor the most talented employees.

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