Unit I Entrepreneurship Suneel kumar

8/7/2019 Unit I Entrepreneurship Suneel kumar

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ENTREPRENEURSHIPENTREPRENEURSHIP

Suneel KumarSuneel KumarAssociate ProfessorAssociate ProfessorInvertis UniversityInvertis University

BareillyBareilly



Entrepreneurs

Do things that are not generally done in the

ordinary course of business

Some entrepreneurs become

celebrities...others become ridiculed for

their failed dreams

All contribute to the spirit of free enterprise



Entrepreneurship

Mainstream Economic

Factors Land

Labor

Capital Entrepreneurship



Entrepreneurship

Entreprendre...17th century French...the

individual who undertook the risk of a new

enterprise... ³undertakers´.

They were ³contractors´ who bore the risks

of profit or loss

Examples: soldiers of fortune, adventurers,

builders, merchants and funeral directors



Entrepreneurs...

14th century...Tax contractors...bore the

risks of collecting taxes. If they collected

more than the fee...they kept the rest as

profit.

Called the ³change agents´ of progressive

economies



Entrepreneurs...

³Essai sur la nature du commerce en

general´...1755 ...describes an entrepreneur

as a person who pays a certain price for a

product to resell it at an uncertain price,

thereby making decisions about obtaining

and using resources while consequentlyassuming the risk of enterprise



Entrepreneurs...

Adam Smith...The Wealth of Nations:

spoke of the ³enterpriser´ as an individual

who undertook the formation of an

organization for commercial purposes

A. Smith...mentioned ³role of

industrialist...,person with unusual foresightwho could recognize potential demand for

goods and services´



Entrepreneurs...

³A Treatise on Political

Economy´...describes an entrepreneur as

one who possessed certain arts and skills of

creating new economic enterprises, yet a

person who had exceptional insight into

society¶s needs and was able to fulfill them. Influences society and is influenced by it.



Entrepreneurs...

John Stuart Mill...describes an entrepreneur as abusiness founder

E

ntrepreneur is an organizer who is paid for hisnon-manual type of work.

Carl Menger ...Principles of Economics:³Economic change does not arise fromcircumstances but from an individual¶s awareness

and understanding of those circumstances Entrepreneur is the change agent who transforms

resources into useful goods and services, oftencreating the circumstances that lead to industrialgrowth.



Menger¶s Model...Value Added

Priority 8...Grain in Field ...Low value

Priority 7...Bulk grain...Low value Intermediate Steps in Transformation

Priority 2...Bread at Bakery for sale...High

value Priority 1... Delivered baked bread...Highest

value



Entrepreneurs...

In 19th century entrepreneurs were:

risk takers

decision makers

aspired to wealth

endured commensurate losses

gathered and managed resources to create newenterprises



Entrepreneurship

Joseph Schumpeter...20th century talks

about ³creative destruction´ whereby

established ways of doing things are

destroyed by the creation of new and better

ways of getting things done

Described it as a process and entrepreneursas innovators who use process to shatter the

status quo through new methods...



SOME OTHER VIEWS ON

ENTREPRENEUR

David McClelland ± An overwhelming need for

achievement and strong urge to build.

Collins and Moore - Driven by needs of

independence and achievement. They seldom are

willing to submit to authority.

Bird - They are cunning, opportunistic, creative,

and unsentimental.



«contd

Cole - There are four types of entrepreneur

The innovator,

The calculating inventor The over-optimistic promoter, and

The organization builder.

These types are not related to the personality but to the type

of opportunity the entrepreneur faces.

Zhao & Seibert - meta-analysis between entrepreneur and

manager.



Entrepreneurs...

Are not equal to inventors...inventor might

only create a new product, whereas an

entrepreneur will gather resources, organize

talent, and provide leadership to make it a

commercial success

Peter Drucker...´Resources, to produceresults, must be allocated to opportunities

rather than to problems...



Entrepreneurs...

Peter Drucker

Innovation is the basic tool of entrepreneurs, the

means by which they exploit changes as anopportunity for a different business or a

different service.

Entrepreneurs need to search purposefully for

the sources of innovation, the changes and their symptoms that indicate opportunities for

successful innovation.



ENTREPRENEUR

An entrepreneur searches for change, responds to

it and exploits opportunities. Innovation is a

specific tool of an entrepreneur hence an effectiveentrepreneur converts a source into a resource.

- Peter Drucker



Entrepreneurs...

Peter Drucker«.

Three conditions have to be fulfilled:

Innovation at work ± requires knowledge and ingenuity

To succeed innovation must build on their strengths.

Innovation has to be close to the market focused



Entrepreneurs...Traits

Self-confident and optimistic

Able to take calculated risk

Respond positively to changes

Flexible and able to adapt

Knowledgeable of markets Able to get along well with others

Independent minded



Entrepreneurs...Traits II

Energetic and diligent

Creative, need to achieve

Dynamic Leader

Responsive to suggestions

Take initiatives

Resourceful and persevering

Perceptive with foresight



Entrepreneurship

Is a dynamic process of creating

incremental wealth. This wealth is created

by individuals who assume the major risks

in terms of equity, time and career

commitment of providing value for some

product or service The entrepreneur must somehow infuse

value to the product or service...



ENTREPRENEUR Vs

ENTREPRENEURSHIP

Entrepreneurs

People who create and grow enterprises

Entrepreneurship

Process through which entrepreneurs create

and grow businesses.

Opportunity idea translation creativity.



ENTREPRENEURSHIP

Entrepreneurship - Onuoha (2007)

³the practice of starting new organizations or

revitalizing mature organizations, particularlynew businesses

generally in response to identified opportunities´.

Entrepreneurship ± Peter Drucker

³a systematic innovation, which consists in thepurposeful and organized search for changes,

and it is the systematic analysis of theopportunities such changes might offer for

economic and social innovation.´



TYPES OF ENTREPRENEURSHIP

Social entrepreneurship.

Political entrepreneurship.

Knowledge entrepreneurship



SEQUENTIAL STEPS

Types of ownership.

Name of the business.

Evaluation of the financial options.

Industry overview.

Market analysis.

Management plan.



PILLLARS FOR

ENTREPRENEURSHIP



FORMS OF ENTREPRENEURSHIP



WHY ENTREPRENEURSHIP

To improve backwardness of the people.

Economic development of the region.

Proper utilization of human potentiality.

Special attention to take up new activities.

To create self-employment and generation of

employment opportunity.Eradication of regional imbalances.

Better economic gain.



TYPES OF ENTREPRENUERS

Innovative Entrepreneurs.

Imitative Entrepreneurs,.

Fabian Entrepreneurs.Drone Entrepreneurs.

Solo Operators.

Active Partners.

Simply Partners.

Inventors.

Buyers.

Life timers.



INNOVATIVE ENTREPRENEURS

Launches new products, discovers new markets,

establishes new methods of production and

restructures the enterprise.Can work only when definite level of progress has

been previously accomplished.

They focus on revolutionalisation and

development.



IMITATIVE ENTREPRENEURS

Adopt victorious innovations launched by

the innovative entrepreneurs.

Duplicate the technology and techniques

innovated by others.

Suitable for underdeveloped countries.



FABIAN ENTREPRENEURS

Exemplified by great caution and skepticism in

experimenting any change in the organization.

They imitate only in situations where it becomesnecessary to do so.



DRONE ENTREPRENEURS

Drone Entrepreneurs suffer losses, as they refuse

to make any modifications in the existing

production methods.



SOLO OPERATORS

These entrepreneurs basically work alone and if

required may recruit few people.



ACTIVE PARTNERS

These entrepreneurs set up an enterprise as a joint

venture and they actively take part in the activities

of the organization.



SIMPLY PARTNERS

These entrepreneurs contribute funds, but are not

involved in the operations of the enterprise.



INVENTORS

These entrepreneurs are involved in the research

and development and innovative activities.



BUYERS

These entrepreneurs in order to reduce risk buy an

already established and ongoing enterprise.



LIFE TIMERS

These entrepreneurs take business as primary part

of their life.

Family enterprise falls into this group of entrepreneurs.



FUNCTIONS OF AN

ENTREPRENEUR

Planning of the project

Managerial Functions

Assumption of Risks

Uncertainty and changes in all the aspects of business environmentBusiness Decisions

Nature of Goods

Type of Industry

Size of Business/ Location/ Techniques of Production etc

Functions of InnovationDistribution of Rewards

Sale of Products

Scale of Production

Joint stock Organization

Earn Profit



PRODUCTION

SALES/MARKETING

FINANCETECHNOLOGY/ SYSTEM

HUMAN RESOURCES

ENTREPRENUER



FUNCTIONS OF AN

ENTREPRENEUR

ENTREPRENEURINNOVATION EARNING PROFITS

RISK - TAKINGMANAGING ENTERPRISE

DECIDING THE PROJECT PLANNING PRODUCTIONRAISING FINANCE



FUNCTIONS PERFORMED

Identifying entrepreneurial opportunity

Turning ideas into action

Feasibility study

Resourcing

Setting up of the Enterprise

Managing the enterpriseGrowth and Development



Entrepreneurial Process

Entrepreneurial process is a leadership function which centers round thedynamics of entrepreneurial growth and change.

Stages of Entrepreneurial Process

First ± Change in the socio-economic environment

Second ± Starting a new venture

Third ± Intrapreneurship

Fourth ± Coordinating varied activities to achieve theentrepreneurial goal

Intrapreneurship is the process of extending the enterprises¶ domain of competence byexploiting new opportunities through new combination of its available resources.



Discussion...

Suggest areas for new possible enterprises...

Compare concepts of entrepreneurship

discussed so far...

Explain entrepreneurship as a process and

the importance of innovation to that

process...



Creative as a prerequisite to

innovation Creativity - is ³the ability to bring

something new into ex

istence Innovation - is the process of doing

new thing.



The Creative Process

Idea Germination

Preparation

Incubation

Illumination

Verification



The difference between invention

and innovation is:

Invention - is the creation of new products,

processes, and technologies not previously

known to exist.

Innovation - is the transformation of

creative ideas into useful applications by

combining resources in new or unusualways to provide value to society for or

improved products, technology, or services.



Elements in the Innovation

Process Analitical Planning

Organizing Resources Implementation

Commercial Application

Documents

Unit I Entrepreneurship Suneel kumar