Entrepreneurship & Management of SME Assignment

Name: Pratik M Lawana

Roll No.: 10B729

Class: T.Y.B.M.S Division: B

1. Explain the role played by the SGH in encouraging women entrepreneurs?

A self-help group (SHG) is a village-based financial intermediary usually composed of 10–20 local women. Members make small regular savings contributions over a few months until there is enough capital in the group to begin lending. Funds may then be lent back to the members or to others in the village for any purpose.

The role played by the SGH in encouraging women entrepreneurs are as follows:

Regular Saving The savings are deposited by all the members in the meeting itself. No interest is paid to the members for their money contributed in the group. But it encourages every member to save money regularly for the future needs.

Compulsory attendance Full attendance in all the group meetings will make it easy for the SHG to stabilise and start working to the satisfaction of all.

MeetingsThe group should have a fixed day or date for the meetings. This will help the members to plan in advance their routine works.

Common placeThe group should have a common place to conduct the meetings

Keeping the accounts

SHG

Regular Saving

Compulsory attendance

Common place

Meetings

Conduct of internal

lending by SHG

Resolution from the

SHG

Keeping the accounts

Simple and clear books for all transactions to be mentioned. If no member is able to maintain the books, the SHG may take outside help.

Resolution from the SHGThe SHG has to pass a resolution in the group meeting, signed by all members, indicating their decision to open saving bank A/C with the bank. This resolution is filed by the bank.

Conduct of internal lending by SHGAfter saving for a minimum period of 2 to 3 months, the common savings fund should be used by the SHG for lending to its own members.

2. “Entrepreneurs are made and not born” in the light of the above statement explain the objectives of EDP and state the importance of entrepreneurial training.

Entrepreneurs are made not born. It is part of a deeply held cultural belief that the qualities that make up entrepreneurs, like creativity, ingenuity, and passion, are the result of innate personal qualities. Although there is some truth to this, it is not the whole story. In fact, belief in this half-story may be the reason why many people (maybe even you) do not pursue their entrepreneurial passions and why many more do not consider their current work entrepreneurial. They are made from their childhoods, families, and life circumstances. They are made from their obstacles, failures, and successes. And most importantly, they are made from their past and present work experiences.

Objectives of EDP are as follows: To let the entrepreneur set or reset the objectives of his business enterprise and work

individually and with his team for the accomplishment of such objectives. To prepare the entrepreneur to take strategic decisions To prepare the entrepreneur’s to bear the unexpected risk for a long time after

training. To instil in his mind values like honesty, integrity and legal compliance. To develop in entrepreneur’s the art of communication and co-ordination. To analyse environmental set up relating to small industry and promoting it. Understand the process and procedure involved in setting up small units. Know the sources of help and support available for starting a small-scale industry.

Importance of entrepreneurial training are as follows:

Economic growthEDP is a tool of industrialisation and path to economic growth. The trained entrepreneurs can initiate change in the structure of business and industry. It increases new investment and bring innovations.

Solves industrial problemsThe big urban cities have become highly congested and industrial towns. EDP’s help in removal of industrial slums by relocating the industries. EDP’s help to provide incentives, subsidies and infrastructural facilities to the entrepreneurs to set up their own industrial units in all the regions.

Defuses Social TensionEvery youth feels frustrated if he does not get employment after completing his education. This may defuse social tension and unrest among youth.

Eliminates Poverty and UnemploymentIncreasing joblessness and unemployment is the old problem of most of the developing countries. EDP’s provide enormous opportunities for self-employment and entrepreneurial careers.

Improves standard of livingEDP improves the standard of living of weaker section of the society and involvement of all sections in the process of economic growth.

Fulfilment of dreamsEDP is necessary to motivate the potential entrepreneur’s to convert their dreams into action.

3. How do you understand the social entrepreneurship? What are the arguments for and against the social entrepreneurship?

Social entrepreneurship means identifying or recognizing a social problem and using entrepreneurial principles to organize, create, and manage a social venture to achieve a desired social change.Arguments for social entrepreneurship are as follows:

Long run visibilityIf a business enterprise fulfils his duties towards society, it would earn long run viability.

Public expectationsThere is deep conviction that entrepreneur has a clear obligation to the good of the greater society. The business enterprise is expected to be efficient, profitable and at the same time socially responsible.

Public imageSocially responsible behaviour creates a positive public image for entrepreneur.

Better environmentBusiness can create a better environment which will be more conducive to future prosperity and success of business enterprise.

Huge resourcesEntrepreneurs have sufficient reservoir of capital, expertise and other resources that have great potential for public and social service.

Arguments against social entrepreneurship are as follows:

Loss of profit maximisation:It is thought that diverting resources away from the firm to socially responsible programmes may undermine the competitive strength of entrepreneur.

Cost:

Social obligations can be very expensive and may cause entrepreneurs to forego attractive business investments or even to go out of business.

Lack of skills:Most entrepreneurs do not have the skills and training to work effectively with social issues.

Too much power:Business can be said to already have too much power without encouraging it to increase its social influence.

Lack of accountability:There is no way to hold entrepreneurs responsible or accountable for the outcomes of its social programmes.

Lack of support:Since society and other thinkers seem to be split on the issue of the social responsibility, entrepreneurs lack public support which may cause to failure.

4. Explain the role of culture in entrepreneurial development.

Building Your Entrepreneurship everywhere is the necessity of all nations. There is recognition of the fact that the soft power of the future is in the country’s youth and moulding them is important to ensure overall progress of the society. Youth unemployment and absence of Your Entrepreneurship developmental programs creates not only economic problems in the society but leads to several social problems too.Understanding the background and the Your Entrepreneurship culture in any society is a very complex subject. Lot of research has gone into studying the influence of cultural attitudes of a community, a society or an ethnic group and the national political as well as economic environment and their mutual interactions affecting the attitude of the youth towards Youth Entrepreneurship.One of the significant studies on Youth Entrepreneurship and the influence of culture at the workplace and development of values among the Youth has been put forth by Hofstede. He has proposed a four point model that influences the Youth Entrepreneurship in the local work environment. As per him the cultural elements of ‘Uncertainty Avoidance’, ‘Individualism’, ‘Masculinity’ and ‘Power Distance’ influence the attitude and thinking of the Youth with reference to their personal goals and careers. It is seen that the youth’s behaviour and thinking pattern is shaped by these four factors. An individual’s attitude and approach towards achievement and pursuit of his goals and what he wants to be in life, risk taking ability and approach, as well as the acceptance of personal, family and social duties are shaped in accordance with his understanding and reactions to these four factors. In societies which are accepting uncertainties, the youth are more likely to be more risk taking and trying their hands at entrepreneurship and aim for higher achievement. History shows that American society is more open to risk taking and accepting un certainties as compared to Europeans who are averse to taking risks and facing uncertainties. They would prefer to have a stable and steady job than try their hand at new ventures. It is said that Americans are afraid of failure and the culture is such that they are not likely to accept failure at any cost and will do anything to make their ventures a success. A good example of power distance or hierarchies is evident amongst the Japanese, for it is embedded in all aspects of their culture. In

communistic countries the approach to entrepreneurship is a lot different compared to other cultures. The societies have grown with the belief in the State providing for their welfare and such attitude can inhibit a aggressive entrepreneurial drive.The individual’s perception of what his family and friends think or opine about entrepreneurship has a crucial role to play in his views. Besides, the view of the family, their support and the society with regard to failure is also a very important factor playing upon the young minds and framing their opinion. Family’s support is very essential because in most cases the Youth would need to borrow initial finances from the family and friends. The family’s attitude towards education and other careers in fields like medicine, engineering etc are also likely to dominate the Youth’s mind set towards entrepreneurship. It is quite likely that the families will be ready to take loan and fund the youth’s professional education rather than funding for a new business venture where risk is involved.Surprising but true is the fact that the society’s views about business entrepreneurs as prospective bridge groom can also become a deciding factor promoting or inhibiting Your Entrepreneurship. In some societies people prefer to marry their daughters to persons holding Government jobs thinking that the jobs are secured and permanent as compared to a self-employed individual. Normally professionals like lawyers, doctors and scientists are seen to be the most preferred as bridegrooms. Parents of eligible girls are likely to associate self-employed youth with certain values like corruption, straight forwardness, honesty etc. These are but purely individualistic opinions but they are still relevant in terms of shaping the Your Entrepreneurship in the society.

5. Explain the objectives of EDP and how it is conducted?

The Important Objectives of the EDP are as follows: To identify and train potential entrepreneurs. To motivate the entrepreneurial instinct. To develop necessary knowledge and skills among the participants. To help in analysing the various options to select the most appropriate product suiting

to the entrepreneur and the market. To give a clear picture about the process and procedures involved in setting up an

small scale Industrial unit or a bigger unit. To develop and strengthen entrepreneurial quality and motivation. To impart basic managerial skills and understandings to run the project efficiently and

effectively. To analyst the environmental issues to be addressed relating to the proposed project. To develop various business related skills of marketing, quality management

production, distribution and human resource management etc. To make the potential entrepreneurs know about the possible risks and failures of the

project and make them learn how to overcome these problems. 6. Explain in detail the various options available to entrepreneurs.

Phases of EDP conducted are as follows:

Pre-training phase: It consists of all activities and preparation to launch training programme. Pre-training phase of EDP consists of the following activities: Selection of entrepreneurs for the training programme.

Arrangements of infrastructure are for the programme like selection of place of training.

Deciding guest faculty for the programme from education industry and banks. Taking necessary steps for inauguration of programme. Formation of selection committee to select trainees from the programme. Making provision with regard to publicity and campaigning for the programme.

Training Phase: The primary objective of training programme is to develop motivation and skill or competency amongst the potential entrepreneurs. Care should be taken to impart both theoretical and practical knowledge to various trainees. The training phase of EDP will be so designed that it will answer the following questions: Whether the attitude of the entrepreneur has been tuned towards the proposed

project or no. Whether the trainee has been motivated to accept entrepreneurship as a career. How the trainee behaves like an entrepreneur. Whether the trainee has sufficient knowledge on resources and technology or not. What kind of entrepreneurial traits he lacks and what steps should be taken to set

it. Support and Follow-up Phase: Support and Follow up phase of EDP has been

termed as post-training phase. The ultimate objective is to develop competent entrepreneurs. So that they can start their project. Post-training phase is a review phase of training programme. It consists of reviewing of work in the following manner: Review of pre-training work Review of actual training programme Review of post training programme so that cost effectiveness of the present

programme can be evaluated.

6. Explain in detail the various options available to entrepreneurs.

Basically there are three options available to entrepreneurs are as follows:

AncillarisationAn ancillary unit is defined as industrial undertakings having investment in fixed assets in plant and machinery whether hold an ownership or on hire purchase not exceeding Rs. 100 lakhs and engaged in; Manufacture of parts and components, subassemblies, tooling or intermediaries, and Rendering of services and supplying or proposing to render or supply not less than

50% of its production or services as the case may be to one or more of the industrial undertakings for production of other articles.

Ancillary units can also take up subcontracting as a part of their business activity catering to a large industrial undertaking.

FranchisingFranchising is one of three business strategies a company may use in capturing market share. The others are company owned units or a combination of company owned and franchised units.

Franchising is a business strategy for getting and keeping customers. It is a marketing system for creating an image in the minds of current and future customers about how the company's products and services can help them. It is a method for distributing products and services that satisfy customer needs.Franchising is a network of interdependent business relationships that allows a number of people to share: A brand identification A successful method of doing business A proven marketing and distribution system

In short, franchising is a strategic alliance between groups of people who have specific relationships and responsibilities with a common goal to dominate markets, i.e., to get and keep more customers than their competitors.

Finally, your desire to become a franchisee must be grounded in your belief that you can be more successful using someone else's brand and operating according to their systems and methods, than you could if you opened up your own independent business and competed against them. You want to look for a franchisor who is building a system of interdependent franchisees who are committed to getting and keeping customers, to growing faster than the market, to growing faster than the competitors, and to do all of that with high margins. When you discover a franchisor who understands this relationship, you have a franchisor worth your consideration.

OutsourcingOutsourcing is contracting with another company or person to do a particular function. Almost every organization outsources in some way. Typically, the function being outsourced is considered non-core to the business. An insurance company, for example, might outsource its janitorial and landscaping operations to firms that specialize in those types of work since they are not related to insurance or strategic to the business. The outside firms that are providing the outsourcing services are third-party providers, or as they are more commonly called, service providers.Although outsourcing has been around as long as work specialization has existed, in recent history, companies began employing the outsourcing model to carry out narrow functions, such as payroll, billing and data entry. Those processes could be done more efficiently, and therefore more cost-effectively, by other companies with specialized tools and facilities and specially trained personnel.Currently, outsourcing takes many forms. Organizations still hire service providers to handle distinct business processes, such as benefits management. But some organizations outsource whole operations. The most common forms are information technology outsourcing (ITO) and business process outsourcing (BPO).

7. What are the various influencing entrepreneurial development?

Entrepreneurship is influenced by four distinct factors: economic development, culture, technological development and education. In areas where these factors are present, you can expect to see strong and consistent entrepreneurial growth.

These conditions may have both positive and negative influences on the emergence of entrepreneurship. Positive influences constitute facilitative and conducive conditions for the emergence of entrepreneurship, whereas negative influences create inhibiting milieu to the emergence of entrepreneurship.

Economic Factors

Economic environment exercises the most direct and immediate influence on entrepreneurship. This is likely because people become entrepreneurs due to necessity when there are no other jobs or because of opportunity.

The economic factors that affect the growth of entrepreneurship are the following:

CapitalCapital is one of the most important factors of production for the establishment of an enterprise. Increase in capital investment in viable projects results in increase in profits which help in accelerating the process of capital formation. Entrepreneurship activity too gets a boost with the easy availability of funds for investment.Availability of capital facilitates for the entrepreneur to bring together the land of one, machine of another and raw material of yet another to combine them to produce goods. Capital is therefore, regarded as lubricant to the process of production.France and Russia exemplify how the lack of capital for industrial pursuits impeded the process of entrepreneurship and an adequate supply of capital promoted it.

LabourEasy availability of right type of workers also effect entrepreneurship. The quality rather than quantity of labour influences the emergence and growth of entrepreneurship. The problem of labour immobility can be solved by providing infrastructural facilities including efficient transportation.The quality rather quantity of labour is another factor which influences the emergence of entrepreneurship. Most less developed countries are labour rich nations owing to a dense and even increasing population. But entrepreneurship is encouraged if there is a mobile and flexible labour force. And, the potential advantages of low-cost labour are regulated by the deleterious effects of labour immobility. The considerations of economic and emotional security inhibit labour mobility. Entrepreneurs, therefore, often find difficulty to secure sufficient labour.

Raw MaterialsThe necessity of raw materials hardly needs any emphasis for establishing any industrial activity and its influence in the emergence of entrepreneurship. In the absence of raw materials, neither any enterprise can be established nor can an entrepreneur be emergedIt is one of the basic ingredients required for production. Shortage of raw material can adversely affect entrepreneurial environment. Without adequate supply of raw materials no industry can function properly and emergence of entrepreneurship to is adversely affected.In fact, the supply of raw materials is not influenced by themselves but becomes influential depending upon other opportunity conditions. The more favourable these

conditions are, the more likely is the raw material to have its influence of entrepreneurial emergence.

MarketThe role and importance of market and marketing is very important for the growth of entrepreneurship. In modern competitive world no entrepreneur can think of surviving in the absence of latest knowledge about market and various marketing techniques.The fact remains that the potential of the market constitutes the major determinant of probable rewards from entrepreneurial function. Frankly speaking, if the proof of pudding lies in eating, the proof of all production lies in consumption, i.e., marketing.The size and composition of market both influence entrepreneurship in their own ways. Practically, monopoly in a particular product in a market becomes more influential for entrepreneurship than a competitive market. However, the disadvantage of a competitive market can be cancelled to some extent by improvement in transportation system facilitating the movement of raw material and finished goods, and increasing the demand for producer goods.

InfrastructureExpansion of entrepreneurship presupposes properly developed communication and transportation facilities. It not only helps to enlarge the market, but expand the horizons of business too. Take for instance, the establishment of post and telegraph system and construction of roads and highways in India. It helped considerable entrepreneurial activities which took place in the 1850s.Apart from the above factors, institutions like trade/ business associations, business schools, libraries, etc. also make valuable contribution towards promoting and sustaining entrepreneurship’ in the economy. You can gather all the information you want from these bodies. They also act as a forum for communication and joint action.

Social Factors

Social factors can go a long way in encouraging entrepreneurship. In fact it was the highly helpful society that made the industrial revolution a glorious success in Europe. Strongly affect the entrepreneurial behaviour, which contribute to entrepreneurial growth. The social setting in which the people grow, shapes their basic beliefs, values and norms.

The main components of social environment are as follows:

Caste FactorThere are certain cultural practices and values in every society which influence the’ actions of individuals. These practices and value have evolved over hundreds of years. For instance, consider the caste system (the Varna system) among the Hindus in India. It has divided the population on the basis of caste into four division. The Brahmana (priest), the Kshatriya (warrior), the Vaishya (trade) and the Shudra (artisan): It has also defined limits to the social mobility of individuals.By social mobility’ we mean the freedom to move from one caste to another. The caste system does not permit an individual who is born a Shridra to move to a higher caste. Thus, commercial activities were the monopoly of the Vaishyas. Members of the three other Hindu Varnas did not become interested in trade and commerce, even

when India had extensive commercial inter-relations with many foreign countries. Dominance of certain ethnical groups in entrepreneurship is a global phenomenon

Family BackgroundThis factor includes size of family, type of family and economic status of family. In a study by Hadimani, it has been revealed that Zamindar family helped to gain access to political power and exhibit higher level of entrepreneurship.Background of a family in manufacturing provided a source of industrial entrepreneurship. Occupational and social status of the family influenced mobility. There are certain circumstances where very few people would have to be venturesome. For example in a society where the joint family system is in vogue, those members of joint family who gain wealth by their hard work denied the opportunity to enjoy the fruits of their labour because they have to share their wealth with the other members of the family.

EducationEducation enables one to understand the outside world and equips him with the basic knowledge and skills to deal with day-to-day problems. In any society, the system of education has a significant role to play in inculcating entrepreneurial values.In India, the system of education prior to the 20th century was based on religion. In this rigid system, critical and questioning attitudes towards society were discouraged. The caste system and the resultant occupational structure were reinforced by such education. It promoted the idea that business is not a respectable occupation. Later, when the British came to our country, they introduced an education system, just to produce clerks and accountants for the East India Company, The base of such a system, as you can well see, is very anti-entrepreneurial.Our educational methods have not changed much even today. The emphasis is till on preparing students for standard jobs, rather than marking them capable enough to stand on their feet.

Attitude of the SocietyA related aspect to these is the attitude of the society towards entrepreneurship. Certain societies encourage innovations and novelties, and thus approve entrepreneur’s actions and rewards like profits. Certain others do not tolerate changes and in such circumstances, entrepreneurship cannot take root and grow. Similarly, some societies have an inherent dislike for any money-making activity. It is said, that in Russia, in the nineteenth century, the upper classes did not like entrepreneurs. For them, cultivating the land meant a good life. They believed that rand belongs to God and the produce of the land was nothing but god’s blessing. Russian folk-tales, proverbs and songs during this period carried the message that making wealth through business was not right.

Cultural ValueMotives impel men to action. Entrepreneurial growth requires proper motives like profit-making, acquisition of prestige and attainment of social status. Ambitious and talented men would take risks and innovate if these motives are strong. The strength of these motives depends upon the culture of the society. If the culture is economically or monetarily oriented, entrepreneurship would be applauded and praised; wealth accumulation as a way of life would be appreciated. In the less

developed countries, people are not economically motivated. Monetary incentives have relatively less attraction. People have ample opportunities of attaining social distinction by non-economic pursuits. Men with organizational abilities are, therefore, not dragged into business. They use their talents for non-economic end.

Psychological Factors

Many entrepreneurial theorists have propounded theories of entrepreneurship that concentrate especially upon psychological factors. These are as follows:

Need AchievementThe most important psychological theories of entrepreneurship was put forward in the early) 960s by David McClelland. According to McClelland ‘need achievement’ is social motive to excel that tends to characterise successful entrepreneurs, especially when reinforced by cultural factors. He found that certain kinds of people, especially those who became entrepreneurs, had this characteristic. Moreover, some societies tend to reproduce a larger percentage of people with high ‘need achievement’ than other societies. McClelland attributed this to sociological factors. Differences among societies and individuals accounted for ‘need achievement’ being greater in some societies and less in certain others.The theory states that people with high need-achievement are distinctive in several ways. They like to take risks and these risks stimulate them to greater effort. The theory identifies the factors that produce such people. Initially McClelland attributed the role of parents, specially the mother, in mustering her son or daughter to be masterful and self-reliant. Later he put less emphasis on the parent-child relationship and gave more importance to social and cultural factors. He concluded that the ‘need achievement is conditioned more by social and cultural reinforcement rather than by parental influence and such related factors.

Withdrawal of Status RespectThere are several other researchers who have tried to understand the psychological roots of entrepreneurship. One such individual is Everett Hagen who stresses the-psychological consequences of social change. Hagen says, at some point many social groups experience a radical loss of status. Hagen attributed the withdrawal of status respect of a group to the genesis of entrepreneurship.Hage believes that the initial condition leading to eventual entrepreneurial behaviour is the loss of status by a group. He postulates that four types of events can produce status withdrawal: The group may be displaced by force; It may have its valued symbols denigrated; It may drift into a situation of status inconsistency; and It may not be accepted the expected status on migration in a new society.

MotivesOther psychological theories of entrepreneurship stress the motives or goals of the entrepreneur. Cole is of the opinion that besides wealth, entrepreneurs seek power,

prestige, security and service to society. Stepanek points particularly to non-monetary aspects such as independence, persons’ self-esteem, power and regard of the society.On the same subject, Evans distinguishes motive by three kinds of entrepreneurs

Managing entrepreneurs whose chief motive is security. Innovating entrepreneurs, who are interested only in excitement. Controlling entrepreneurs, who above all otter motives, want power and authority.

Finally, Rostow has examined inter gradational changes in the families of entrepreneurs. He believes that the first generation seeks wealth, the second prestige and the third art and beauty.

OthersThomas Begley and David P. Boyd studied in detail the psychological roots of entrepreneurship in the mid-1980s. They came to the conclusion that entrepreneurial attitudes based on psychological considerations have five dimensions: First came ‘need-achievement’ as described by McClelland. In all studies of

successful entrepreneurs a high achievement orientation is invariably present. The second dimension that Begley and Boyd call ‘locus of control’ This means

that the entrepreneur follows the idea that he can control his own life and is not influenced by factors like luck, fate and so on. Need-achievement logically implies that people can control their own lives and are not influenced by external forces.

The third dimension is the willingness to take risks. These two researchers have come to the conclusion that entrepreneurs who take moderate risks earn higher returns on their assets than those who take no risks at all or who take extravagant risks.

Tolerance is the next dimension of this study. Very few decisions are made with complete information. So all business executives must, have a certain amount of tolerance for ambiguity.

Finally, here is what psychologists call ‘Type A’ behaviour. This is nothing but “a chronic, incessant struggle to achieve more and more in less and less of time” Entrepreneurs are characterize by the presence of ‘Type A’ behaviour in all their endeavours.

8. Explain in detail the social responsibility towards business.

After getting some idea about the concept and importance of social responsibility of business let us look into the various responsibilities that a business has towards different groups with whom it interacts. The business generally interacts with owners, investors, employees, suppliers, customers, competitors, government and society. They are called as interest groups because by each and every activity of business, the interest of these groups is affected directly or indirectly.

Responsibility of Business towards Different Interest Groups.

Responsibility towards owners Owners are the persons who own the business. They contribute capital and bear the business risks. The primary responsibilities of business towards its owners are to: Run the business efficiently. Proper utilisation of capital and other resources. Growth and appreciation of capital. Regular and fair return on capital invested.

Responsibility towards investorsInvestors are those who provide finance by way of investment in debentures, bonds, deposits etc. Banks, financial institutions, and investing public are all included in this category. The responsibilities of business towards its investors are: Ensuring safety of their investment, Regular payment of interest, Timely repayment of principal amount.

Responsibility towards employeesBusiness needs employees or workers to work for it. These employees put their best effort for the benefit of the business. So it is the prime responsibility of every business to take care of the interest of their employees. If the employees are satisfied and efficient, then the only business can be successful. The responsibilities of business towards its employees include: Timely and regular payment of wages and salaries. Proper working conditions and welfare amenities. Opportunity for better career prospects. Job security as well as social security like facilities of provident fund, group

insurance, pension, retirement benefits, etc. Better living conditions like housing, transport, canteen, crèches etc. Timely training and development.

Responsibility towards suppliers

Business

Investors

Employees

Government

CompetitorsSociety

Customers

Suppliers

Suppliers are businessmen who supply raw materials and other items required by Manufacturers and traders. Certain suppliers, called distributors, supply finished products to the consumers. The responsibilities of business towards these suppliers are: Giving regular orders for purchase of goods. Dealing on fair terms and conditions. Availing reasonable credit period. Timely payment of dues.

Responsibility towards customersNo business can survive without the support of customers. As a part of the responsibility of business towards them the business should provide the following facilities: Products and services must be able to take care of the needs of the customers. Products and services must be qualitative There must be regularity in supply of goods and services Price of the goods and services should be reasonable and affordable. All the advantages and disadvantages of the product as well as procedure to use

the products must be informed do the customers. There must be proper after-sales service. Grievances of the consumers, if any, must be settled quickly. Unfair means like under weighing the product, adulteration, etc. must be avoided.

Responsibility towards competitorsCompetitors are the other businessmen or organizations involved in a similar type of business. Existence of competition helps the business in becoming more dynamic and innovative so as to make itself better than its competitors. It also sometimes encourages the business to indulge in negative activities like resorting to unfair trade practices. The responsibilities of business towards its competitors are Not to offer exceptionally high sales commission to distributers, agents etc. Not to offer to customers heavy discounts and /or free products in every sale. Not to defame competitors through false or ambiguous advertisements.

Responsibility towards governmentBusiness activities are governed by the rules and regulations framed by the government. The various responsibilities of business towards government are: Setting up units as per guidelines of government Payment of fees, duties and taxes regularly as well as honestly. Not to indulge in monopolistic and restrictive trade practices. Conforming to pollution control norms set up by government. Not to indulge in corruption through bribing and other unlawful activities.

Responsibility towards societyA society consists of individuals, groups, organizations, families etc. They all are the members of the society. They interact with each other and are also dependent on each other in almost all activities. There exists a relationship among them, which may be direct or indirect. Business, being a part of the society, also maintains its relationship with all other members of the society. Thus, it has certain responsibilities towards society, which may be as follows: To help the weaker and backward sections of the society

To preserve and promote social and cultural values To generate employment To protect the environment To conserve natural resources and wildlife To promote sports and culture To provide assistance in the field of developmental research on education, medical

science, technology etc.

9. Explain creativity and the process of creativity.

Creativity is the impetus behind any given act of creation: inventions, compositions, etc. It is a fundamental human compulsion and largely related to notions of what separates human from machine intelligence.

Process of creativity is as follows:

Preparation

During the preparation step of the creative process model, an individual becomes curious after encountering a problem. Examples of problems can include an artistic challenge or an assignment to write a paper. During this stage, she may perform research, creates goals, organize thoughts and brainstorm as different ideas formulate. For example, a marketing professional may prepare for a marketing campaign by conducting market research and formulating different advertisement ideas.

Incubation

Preparation Incubation Illumination Evaluation Implementation

While the individual begins to process her ideas, she begins to synthesize them using her imagination and begins to construct a creation. Gabora states that during this step, the individual does not actively try a find a solution, but continues to mull over the idea in the back of her head.

Illumination

As ideas begin to mature, the individual has an epiphany regarding how to piece her thoughts together in a manner that makes sense. The moment of illumination can happen unexpectedly. For example, an individual with the task of putting together an office party may have an idea for a theme while driving home from work.

Evaluation

After a solution reveals itself in an epiphany, the individual then evaluates whether the insight is worth the pursuit. He may make changes to his solution so it is clearer. He may consult with peers or supervisors regarding his insights during this step before pursuing it further. If he works with clients, he may seek a client's input and approval before moving on to the next step.

Implementation

The implementation of an idea or solution in the creative process model is when an individual begins the process of transforming her thoughts into a final product. For example, during this step, a painter may begin outlining shapes on a canvas with charcoal before applying oil paints to the medium. According to Gabora, an individual may begin this step more than once in order to reach the desired outcome. For example, a graphic designer may open a new digital canvas if he did not have the scale calculated correctly on a previous work, and he will continue to implement his ideas and make adjustments until he reaches a pleasing final product.

10. Distinguish between creativity and innovation.

Creativity is dreaming of new things while innovation means making those dream come true.

The thinking up of new things and concepts can be termed creativity whereas innovation is the process of converting these thoughts into practical usage.

Creativity is said to be the capability of conceiving something unusual or original. On the other hand, innovation is said to be the implementation of some new thing.

If something new has been brought into existence, it can be said that you have created it, while if you have made improvements to something which already exists, then you can be said to have made an innovation.

Creativity is generating ideas and innovation is bringing these ideas to life. Creativity is related to experience whereas innovation is related to observation.

11. Explain the importance and methods of training.

Importance of training are as follows:

Training and development programmes help remove performance deficiencies in employee. This is particularly true when –(i) the deficiency is cause by lack of ability rather than a lack of motivation to perform, (ii) the individuals involved have the aptitude and motivation need to learn to do the job better, and (iii) supervisors and peers are supportive of the desired behaviours.

There is greater stability, flexibility, and capacity for growth in an organization. Training contributes to employee stability in at least two ways. Employees become efficient after undergoing training and efficient employees contribute to the growth of the organization. Future needs of employees will be met through training and development programmes. Organizations take fresh diploma holders or graduates as apprentices or management trainees. They are absorbed after course completion. Training serves as an effective source of recruitment. Training is an investment in HR with a promise of better returns in future.

The different methods of training are as follows:

There are basically two methods of training. 1) On-the-Job Methods and 2) Off-the job-Methods.

On the Job Training Methods: This type of training is also known as job instruction training. Under this method the individual is place on a regular job and taught the skills necessary to perform that job the trainee learns under the supervision and guidance of a qualified worker or instructor. On the job training has the advantage of giving first-hand knowledge and experience under the actual working conditions. While the trainee learns how to perform a job, he is also a regular worker rendering the services for which he is paid. The emphasis is placed on rendering services in the most effective manner rather than learning how to perform the job.

Job Rotation: This type of training involves the movement of the trainee from one job to another. The trainee receives job knowledge and gains experience from his supervisor or trainer in each of the different job assignments. Though this method of training is common in training managers for general management positions, trainees can also be rotated from job to job in workshop jobs. This method gives an opportunity to the trainee to understand the problems of the employees on other jobs and respect them.

Coaching: The trainee is placed under a particular supervisor who functions as a coach in training the individual. The supervisor provides feedback to the trainee on his performance and offers some suggestions for improvement. Often the trainee shares some of the duties and responsibilities of the coach and relieves him of his burden. A limitation of this method of training is that the trainee may not have the freedom or opportunity to express his own ideas.

Job Instruction: This method is also known as training through step by step. Under this method, the trainer explains to the trainee the way of doing the jobs, job knowledge and skills and allows him to do the job. The trainer appraises the performance of the trainee, provides feedback information and corrects the trainee.

Committee Assignments: Under the committee assignments a group of trainees are given and asked to solve an actual organizational problem. The trainees solve the problem jointly. It develops team work.

Off the Job Methods: Under this method of training, the trainee is separated from the job situation and his attention is focused upon learning the material related to his future job performance. Since te trainee is not distracted by job requirements, he can place his entire concentration on learning the job rather than spending his time in performing it. There is an opportunity for freedom of expression for the trainees.

Vestibule Training: In this method, actual work conditions are stimulated in a class room. Material files and equipment’s which are used in actual job performance are also used in training. This type of training is commonly used for training personnel for clerical and semi-skilled jobs. The duration of tis type of training ranges from days to a few weeks. Theory can be related to practice in this method.

Role Playing: It is defined as a method of human interaction that involves realistic behaviour in imaginary situations. This method of training involves action, doing and practice. The participants play the role of certain characters such as the production manager, mechanical engineer, superintendents, maintenance engineers, quality control inspectors, foremen, workers and the like. This method is mostly used for developing inter-personal interactions and relations.

Lecture Method: The lecture is a traditional and direct method of instruction. The instructor organises the material and gives it to a group of trainees in the form of a talk. To be effective, the lecture method must motivate and create interest among the trainees. An advantage of the lecture method is that it is direct and can be used for a large group of trainees. Thus costs and time involved are reduced. The major limitation of the lecture method is that it does not provide for training effectively.

Conference or Discussion: It is a method in training the clerical, professional and supervisory personnel. This method involves a group of people who pose ideas, examine and share facts, ideas and data, test assumptions and draw conclusions, all of which contribute to the improvement of job performance. Discussion has the distinct advantage over lecture method as it involves two way communication. The participants feel free to speak in small groups. The success of this method depends on the leadership qualities of the person who leads the group.

Programmed Instruction: In recent years this method has become popular. The subject matter to be learned is presented in a series of carefully planned sequential units. These units are arranged from simple to more complex levels of instructions. The trainee goes through these units by answering or filling the blanks. This method is expensive and time consuming.

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