Transcript Entrepreneur

Entrepreneur
• Meaning• Er and eco dev. as catalyst for dev/socio-eco prosperity.
• Various def but yet not precise due to variations in skills and
abilities.
• Def differs country wise as stages and levels of dev r different
• Er word derived from French verb enterpredre means to
undertake.
• In many countries er –a person who starts his own new and
small business. b it in mfr or trade or services or farming.
• Er –one who innovates, raise and assembles 3 M,s and set-up
org
• Innovation –either 1- a product improvisation-its quality, packing
etc, 2-new product, 3-demand discovery or source of supply, 4changes in org and mgt
• Basics of er -fig
• Schumpeter's def of er- specific in adv economy -an
individual introducing something new in economy thru
reforms or revolutions thru innovations or even imitations in
any area of business
• Peter Drucker's – Innovation -as a specific tool of er,
means to exploit changes as opportunity. So er to search
purposefully for source of innovation with opportunities for
its success.
• His 3 conditions to b fulfilled by er-1-innovation at work,
Requires knowledge and ingenuity. It makes great demand
on diligence, persistence, and commitment.2-to succeed
innovation must build on their strength, 3-innovation to b
close to mkt focus, mkt driven
• Sources of innovative opportunities- 1- unexpected, future
events 2- incongruity, gap bet reality and actual 3-industry
structure, mkt structure,4-changes outside industry related
to cbb- perceptions, demographics, new trends
• Francis A Walker’s views- er –one who is endowed with
more than average capacities for- task , organizing and
coordinating.
• New concept of er – who detects, evaluates envoi. conceives
enterprise with purpose, with vast initiative, grit and
determinations. performs one or more of fallowing• 1-percives opportunities for profitable investments
• 2-explores the prospects of starting such a mfrng enterprise
• 3-obtain necessary industrial licenses,
• 4-arranges initial capital
• 5-provides personal guarantees to f.i.,
• 6-promises to meet shortfall in capital
• 7- supplies tech know how
• Key elements of er- fig and ex of jrd, da, nm etc and family
businesses changed to big corporate
• Importance of er• Imp input for eco dev of a country ,region.
• Makes a difference in rate of eco growth
• Speed up the process of production
• Speed-up dispersal of eco activities
• Development of tribal and backward areas.
• Creation of employment opportunities.
• Improvement in standard of living of weaker sections of
society
• Involvement all sections in process of growth- shg’s
• Nature and type of er• As per types of business, use of professional skills,
motivation, growth and stages of dev and area
• 1-as per business-business er, trading er, industrial erlarge, sme etc, corporate er, agriculture er, retail er,
service er
• 2-As per technology- techs or non techs, professional,
high tech or low tech
• 3-As per motivation-pure, induced, motivated
spontaneous.
• 4-As per growth- growth or super growth
• 5-As per stages of dev- 1st gene, modern, classical,
• 6- as per area- rural, urban
• 7- women er
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ingredients of a successful erConfident in facing challenges and eager to achieve
Identifies product
Plans fro a venture
Selects technology in tune with available resources and
socio eco envoi.
Eager to improve quality
Able to manage men and material
Finds markets
Innovative
Progressive
Always strives to climb up
always imbibes new technology for improvement
Always strives to modernization and diversifications
Well informed
Strives to meet the changing needs of customer as
customer is king
• Traits-Characteristics-of er• Technical competence, initiative, good judgment, intelligence,
leadership qualities, self confidence, energy, attitude,
creativeness, fairness, honesty, tactfulness and emotional
stability.
• 1-Mental ability- comprising intelligence and creative thinking,
analytical power to study satiation, forecast and decide
• 2-clear objectives- about nature of product, service, if
subsidiary, for profits or to render social change
• 3-Business secrecy- so proper selection of supporting people
• 4-HR ability- an imp personality trait leading to emotional
stability, personal relations, consideration and tactfulness.
Relations with Customer , employee , suppliers, creditors and
community depends on good hr
• 5-communication ability- stake holders needs clarity in
business
• 6-technical knowledge.
• Additional- motivator-team leader, self confidence- self belief to
achieve goals, long term involvement, high energy level..
• Fig of characteristics
• Culture and er.
• Every er emerge from available environment so prevailing
business culture or social culture provides envoi base for er
• So er-ship of er is influenced by combo of envoi factors viz
socio-economics , family background, level of edu, political
stability and govt policy, caste religious affiliations, availability
of infra facilities, achievement motivation, personality
• Democratic society, desire to make money thru its applications
rather than holding, encouraging policies of govt provides
trigger to er.
• Culture – a complex whole of knowledge+ belief+ art+ moral+
law+ custom+ habits acquired as a member of society. A total
life way of people, Sum total of social behavior- knowledge+
belief+ ideals+ preferences
• Org culture- Interpersonal , mutual relationships – open, close,
flat. Hierarchy of org etc +work patterns-professional,
autocratic
• Cultural conformity– society insures the people do indeed
meet their role obligations
• Business culture and society• Vibrant and constantly evolving, changing trends in society or in
business . So progressive culture readily stimulates er-ship
• Large scale migrations- entry of mnc’s changes business
culture
• Leaderships , governance also changes b culture – lpg
• Meaning of er culture- comprise- tangibles – products , infra +
intangibles -law, morals, values, skills ,acceptable to society
• Business ethics –satyam –punishments
• Productivity culture- manpower efficiency
• Total quality culture- conforming to global practices
• Org culture- behavior, autocratic , professional
• Top program- top of temple- productivity+ innovation+ new
markets- fig
• Individual leaders- great leader with vision-DA
• Corporate values- leader. Facilitators
• Entrepreneurial vs. admin culture- admin focus on existing
opportunities, structure, procedural controls , vs. er governed
by perceptions of opportunities, vision, social values, committed
to ideas .Credo of entrepreneurs- list to ref
• Barriers / reasons for failure of er due to personal
pulls in spite of suitable envoi –
• -Lack of 1-viable concept.2- market knowledge,3- technical
skills,4-seed capital,5- business know how,6- motivation
• 6-complecency,7- social stigma,8-distractions,9-legal
constraints and regulations,10-monoploy and
protectionism,11-inhibitions due to patents
• Steps to change er culture• Not a magical change but if one 1- starts at top and lead
the enterprise, 2- attune to culture of innovation, 3-remove
the hidden obstacles, 4-create a mkt culture, 5- create an
integrated enterprise culture, 6- create listening envoi, 7absorb competing technology and involve people, 8- don’t
let product innovation fool u.9-be flexible and open for
diversification, and new ideas,10-alwys b ready to change
cultures
• New generation er• Matching to opening of economy and reforms, envoi
friendly to society
• Similarities and differences bet er and intrapreneur
• Intrapreneur or corporate entrepreneur brings new ventures
within the confines of existing corporation/co. expands,
explore new opportunities thru new combination of existing
resources of co.
• Concept of intrapreneurship requires that top exe inside the
co should b encouraged to er within the enterprise rather
than going outside.
• Differentiating points –
• 1-er an independent businessman vs. intra is semiindependent on the promoter/owner of corp.
• 2-er himself raise capital from various sources and
guarantees returns to investors. Creditors
• 3- er bears full risk of his business , intra does not for
business he develops.
• 4- er operates from outside and intra fro within an org.
• Similarities- both innovate, brings growth, manage risks,
aggressive, posses skills. produce results, take decisions
• Mgr vs. er-
Area of similarity
Differing points
Mgr
entrepreneur
To produce results
Today, this month,
short term
Tomorrow, next year,
long term
To produce thru
people
Deal thru mgt nitty
gritty, procedures
encouragement
concepts, strategies
To take decisions
Operational, admin –
short and medium
term
Org constraints for
planning , fin
production etc
Delegation, planning
, accountability,
budgets etc
Strategic growth thru
expansions , m&a,
takeovers
Environmental, infra,
policy constraints
To cooperate under
constraints
To fallow sound
principles of mgt
Social responsibility,
govt policies, ethical
advt etc
• Intrapreneur activities• 1-Corporate venturing- like exploring new markets, forming
separate sbu for new product development,2- organizational
innovativeness- like new systems procedures, 3-self renewalreorganizing strategies etc,4- proactive ness. aggressive, bold,
risk taking approaches, not as a follower in competition
• Types of corporate entrepreneurs• Er-ship in1-Administrative- introducing integrated, holistic
approaches, 2-opportunistic- bank mgr advances loans in high
risk for better returns , 3-acqusitive- creating jv’s, m&a, 4Immitative,- piggy rides 5-Incubative-creating futuristic startups.
• Intrapreneur culture vs. corporate cultures• flat, and not hierarchical working, close , enjoyable working
relationship, more direct involvement, no whims and fancies
,set styles and over restrictive.Climate of encouragement, trial
and experimentation, no insistence as per preconceived initial
parameters, mutidisplinary team approach, long term horizon,
volunteering, reward systems, top mgt wholehearted supports
• Fostering intrapreneurial cultures- thru corporate strategies,
learning org, values to new developments, encourage diverse
thinking.
Areas
Trd mgr
Intra-er
Independence –
carrier
advancementsorientation
Cautious
Moderate risk
taker
Delegates, more More of direct
supervision than involvement than
self involvement delegation
E-r. s
Motivation- Co’s-rewards,
basis
promotions,
power etc
Independence,
money,
achievements
Risk
profileActivity-
Moderate risk
taker
Direct
involvement
Time
Short term
perspective
Mid term
Long term
Decision
making
Able to get
others agree
Fallows
dreams with
decision
Generally as sr
mgr likes
Entrepreneurship Development
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Concepts of E.D.fig
What is Entrepreneurship ?–
A process undertaken by e.r to augment business interest.
An exercise involving innovation and creativity that will go
towards establishing enterprise.
A composite skill comprising many qualities and traits- like
tangible-imagination, readiness for taking risks, ability to use all
factors of production, capital. Labor, land + intangible- ability to
mobilize scientific and technological advances, An ability to best
use of resources and put for max advantages.
the propensity of mind to take calculated risks with confidence
to achieve a predetermined business or industrial objective.
The risk taking ability of the individual broadly coupled with
correct decision making.
Commercial class is a myth- guju,nadar community-any one
can join class. of e-ship.
Mercantile societies-with traders outlook, market oriented
outlook / performances r long established in various countries
• But desirable for developing economies in our national
interest, need is new species of e.r. for serving balanced socio
economic development
• Conflict between social objectives and economic imperatives to
b resolved by e.r. in own mind and then initiate/to participate in
economic growth including industrial development. So e-ship
needs high sense of social objectivity.-fig
• Stimulation of e.r-ship- based on internal and external
business environment variables available in country-like family
run or psu domination or educated young, capital formation,
supportive govt programs, availability of training , scope for
innovations, culture for collaborative relationships.
• Def- A.H.Cole – Entrepreneurship is purposeful activity of an
individual or a group of associated individuals undertake to
initiate , maintain or organize a profit oriented business unit for
the production or distribution of economic goods and services.
• A function of creating something new, organizing and
coordinating and undertaking risk and handling economic
uncertainty.
• Def-Higgins-The function of seeing investment and production
opportunity, organizing an enterprise to undertake a new
production process, raising capital, hiring labor, arranging for
supply of r.m. and selecting top mgr’s for day 2 day operation
of et-se
• Characteristics of entrepreneurship• Peter Ducker- neither a science nor n art, It is a practice with
knowledge base i.e. - means to an end and end is also visible
thru practice. Fig
• Innovation and entrepreneurship interrelated, a complex
phenomenon, an attitude in society- vision- few provide role
models
• SME’s to industry need right climate for successful
entrepreneurship.
• Climate to provide technical know-how, managerial skills and
all business management skills- growth in mgt education
provides a good base.
• Technological advances in socio economic environment create
new needs for er-ship- lpg provides a base.
• Japanese experience- participative mgt, work culture-quality
circles, loyalty and pride of org provide mutual respect for
other developing countries to strategize and bring er-ship
culture.
• Theories of entrepreneurships r mainly related to
• 1-theory economic growth and economic systems- capitalism
or socialism or mixed economy
• 2-theory high achievements
• 3- theory of change
• 4- theory of profit
• 5- theory of social change
• 6- theory of market equilibrium
• 7- theory of cultural values- attitudes
• Flow chart of industrial en-ship-fig
• Evolution of concept of Entrepreneur• E-r- an imp input in eco.dev.a catalyst of dev as we all
prosper with him or else remain poor.
• Concept of e.r. varies from country to country and period to
period and level of eco dev thoughts and perception
• Entrepreneur vs. entrepreneurship
• Refers to person vs. refers to process, visualiser - vision- so
on-ex
• Entrepreneur vs. manager• Two sides of coin
• A professional manager- specialized in work of planning,
organizing, leading, directing and controlling the efforts of
others with the help of systems , knowledge and principles,
• subscribes to standard practices , codes , ethics
• To be p. mgr – 1-gets good insight of job, 2-updates
continuously, 3-maintains performance oriented relationships
with colleagues, 4- collaborative , cooperative with stake
holders and customers, 5- communicative
• Professional mgt- features – 1-has sound mgt knowledge, 2uses mgt tools-analytical, appraisals etc,3- separates mgt
disciplines- coo, cfo etc, 4- maintain code of conductsconsumer satisfactions, educations, csr, 5- membership with
professional associations
Entrepreneurship Development.
1- Concept of E.D.
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Industrialization is an ongoing process which accelerates
economic growth and induces social change.
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The success of India’s economic growth closely linked to its
capabilities to manufacture and export quality products.
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Emphasis on growth thru market oriented process influenced
mainly changing customer, competition, changed conditions
thru LPG
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The process of socio economic change is an intrinsic part of
human civilization. Agriculture, industrial, information activities
benefited all.
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Economic reforms of 1991- its invigorating effects, gdp
growth, needs to sustained with transparency, quality
awareness,tqm, in globally competitive environment.
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Sustained economic growth - To achieve need to devise
efficient and effective political, economic, social, technological
and cultural strategies in coordinated manner for all sectors of
the economy with involvement of people.
• Economic development- possible thru comprehensive
national planning for socio economic transformation. For rapid
ad balanced development Needs 1-objective planning,2generate favorable public response
• Laws of dynamics of eco-dev• 1-social law- developmental urge of society, impulse of change,
for self reliance and willingness to observe discipline leading
actions
• 2-political law- Harmonizing conflicting claims between
undeveloped and under developed regions ,sectors, section of
society etc
• 3-technological law-ED depends upon identification and
insistence of economies of scale and operational choice of
technology of high degree resolutions ,conflict of capital with
labor. so balanced lse+sme. capital intensive or labor intensive.
• 4-administrative law—ed takes place in relation to admin caliber
,motivation and infrastructure facilities-of social, educational,
financial, technical, distributional, medical, logistical etc.
• 5-enterprenurial law-ed originates and fosters in relation to
strength and health of local entrepreneurship with innovative
propensity, management capabilities. ER powers the process
of ED
• 6-commercial law- Ed depends upon balance of trade
,Imports and exports composition relates - capital goods etc,
• 7-Financial law – ED directly relates to national savings,
income, investments policies in conformity with national
priorities and real needs on social justice, economic stability,
and national security leads to increased savings
• Direction of ED-trends affecting ED.
• 1- Technology as resource,2-domestic and international
mkts,3-role of inventions,,4-govt as stimulator, 5enterperneurial and intra-preneurial dev,6-innovative capital
formation,7-active financial sector,8-innovative
etrperebeuraship,9-progressive mgt,10-quality as agoal,11customer as king,12-collaborative relationships.
• Man -crucial factor in development, Human resource.
• Lack of entrepreneurship inhibits the process of
industrialsation