ENTREPRENEUR

8/9/2016
Chapter 1 Learning Objectives
• To understand the need for entrepreneurship.
Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd.

Fundamentals of Entrepreneurship • To understand the relationship between entrepreneurship and
wealth creation.
• To know and learn about entrepreneurship as a key to

development.
• To understand different type of innovations and their implications.
• To understand, how concept of entrepreneurship evolved over the

years.
• To define entrepreneurship, and know about entrepreneurial traits.
Entrepreneurship: Creating and Leading an Entrepreneuria l Organization Author: Arya Kumar Entrepreneurship: Creating and Leading an Entrepreneuria l Organization Author: Arya Kumar
Learning Objectives Critical Input that Play a Key Role in

Taking Fast-growing Economies to Greater
Heights in the Global Markets
• To know and understand difference between inventors and

• Entrepreneurial mindset of its human resources
entrepreneurs. Role of the entrepreneur would be to innovate and create
economic opportunities for others
• To understand the importance of inspiration from role models and
Role of government and its partners would be to create a
social support in promotion of entrepreneurship.
dynamic enterprise environment and a well functioning market
• To know about the concept of business model. Industry to be Patent Literate
• To understand the importance of mindset in entrepreneurship.
• To know about misconceptions and myths about

entrepreneurship.
Entrepreneurship and Wealth Creation Key to Development—Spirit and Mindset of

Entrepreneurial Leadership
Economic Development
Opportunity Resource
Organization
Identification
Entrepreneurship
Value
Creation
Wealth Creation
Resources
Ever Changing Concept of Value Creation in the
Mind of Customer
Past Present Future
Sustainable Development
1
8/9/2016
Entrepreneurship and Economic Entrepreneurship Accelerates Growth and

Development Development By
Development

• Channelizing factors of production in areas wherein they
contribute the maximum possible value addition.
Growth
Expansion • In case it does not evolve from within, at a local, regional or

country level, then entrepreneurs from outside enter to provide
Entrepreneurship
goods and services needed and demanded by the people.
Leads to
Economic
Technology
Scientific Temper Innovation
Development
Types of Innovations Different Types of Innovations
• Product innovation which results in creation of new products or


Breakthrough - New Discontinuous - Give rise improvements in the existing products.
product development with to new product concept
some technological involving new operating
development principles • Process innovation results from improvement in some part of the
Dynamically continuous - process or introduction of a new process to provide additional
Technological – New Result from
product development reconfiguration of existing
benefits.
through substantial technology to create
change in technology process improvement
• Positioning innovation involves creating a market for the product or
Ordinary – New product
Continuous -Result in
service through repositioning.
development through
incremental change
improved technology
• Paradigm innovation involves major shift in thinking that causes
Innovations Innovations change
Evolving Concept of Entrepreneurship Evolving Concept of Entrepreneurship
• Earliest period: More by way of a merchant and a capitalist

• In the 18th century for the first time the role of capital provider
wherein merchant used to be adventurer who took a key role in

was differentiated from the one who needed capital.
trading as also taking physical and emotional risks. The returns
without taking much risk used to be disproportionately shared by
• 19th and early 20th centuries: Briefly stated, the entrepreneur
the capitalist.
organizes and manages an enterprise for personal gain.
• Middle ages can be classified as the cleric – the person overseeing

• 20th century: Concept of an entrepreneur as an innovator was
and managing a great architectural work.
established.
• In the 17th century the concept of risk associated with

• 21st century: Entrepreneurship term more closely associated with
entrepreneurial activity emerged.
creative destruction, disruptive technologies, mindset, and
entrepreneurial leadership.
Contd…
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Entrepreneurship Defined Entrepreneurship Defined
• Profits from bearing uncertainty and risk (Knight 1921). • A person with a high need for achievement who is highly energetic

and a moderate risk taker (David McClleland).
• Creation of new organization (Gartner 1985).
• Pursuit of opportunity without regard to resources currently • An entrepreneur is one who takes initiative, accepts risk of failure
controlled, but constrained by the founders’ previous choices and and has an internal locus of control (Albert Shaperohas).
industry related experience [Hart, Stevenson, & Dial (1995)].
• Introduced the concept of risk by highlighting that entrepreneur is

one who buys factors of production at known prices and converts
these factors into goods and services that are sold at uncertain
prices, and in the process assumes the non-insurable risk (Richard
Cantillon).
Contd…
Entrepreneur Entrepreneurship—Defined
As per Robert Hébert and Albert, an entrepreneur is

• Peter Drucker—A systematic innovation, which consists of

• A person who assumes the risk associated with uncertainty. purposeful and organized search for changes and systematic
• A supplier of financial capital. analysis of the opportunities such changes might offer for
• An innovator. economic and social innovation.
• A decision maker.
• An industrial leader. • As per Harvard Business School—The pursuit of opportunity
• A manager or superintendent. without regard to resources currently controlled.
• An organizer or coordinator of economic resources.
• A proprietor of an enterprise. • Babson—A mindset that is opportunity obsessed, holistic in
• An employer of factors of production. approach, and leadership balanced.
• A contractor.
• A person who allocates resources to alternative uses.
Entrepreneurship—Introduction Wikipedia Says ---
• Entrepreneurship is the process of creating something new with • Entrepreneurship is the practice of starting new organizations or
value by devoting the necessary time and effort, assuming the revitalizing mature organizations, particularly new businesses
accompanying financial, psychic, and social risks, and receiving the generally in response to identified opportunities.
resulting rewards of monetary and personal satisfaction and
independence.
• In short, entrepreneurship is a process of creating something new

and assuming the risks and rewards.
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8/9/2016
What is Entrepreneurship? Three Key Components of

Entrepreneurship
Common themes in definitions of entrepreneurship

• The role of the entrepreneur
Opportunity
• Innovation Identification
• Organization creation
• Creating value
Entrepreneurship
• Profit or not-for-profit
• Growth Resource
Value Creation Organization
• Uniqueness
• Process
Entrepreneurs—Challenging the Unknown Entrepreneurship Success Through Value

Creation
Innovation
• Entrepreneurs recognize opportunity, where others see chaos or

Process
confusion.
Product
Transaction
• Entrepreneurs are aggressive catalyst for change within the
marketplace.
Value Creating Success of a
Creation for Competitive Venture
• Entrepreneurs challenge the unknown and continuously create the
Customer Advantage
future.
Resources
Creating Competitive Advantage Through Type of Resources

Resources
Physical Resources
Resource
Reputational Resources
Characteristics
Resources
--------------------------
Sustainable
Tangible Valuable Competitive Organizational Resources
Intangible Advantage
Rare Types of
Resources
Not Easily Financial Resources
Replicable
Non- Human Resources and
availability of Capabilities
Substitutes
Technological Resources and
Capabilities
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8/9/2016
Traits of an Entrepreneur Traits of an Entrepreneur
• Individuals having intense desire and focus for significant

Visionary
accomplishment, mastering of skills, and do not compromise on

and
Dreamer
maintaining high standards.
Need for Excellent Dynamic

Achievement Networker Leadership
Entrepreneurship
Traits
Traits of
Entrepreneur
Innovative and
Interest in
Locus of Resourceful
Something
Risk Taking
Control “New”
Uncertainty of an outcome Perceived control over the

events of one's life
Entrepreneurship Defined Difference Between Inventors and

Entrepreneurs
Inventor Entrepreneur

Opportunity Leadership
Obsessed Balanced • Someone who is the first to think • Who starts venture that promises
of or make something. economic gain.
• Highly creative. • Organize and manage an
Holistic in • Problem solver—able to reduce enterprise which involves
Mind Set Approach
complex problems to simple ones. considerable initiative and risk
• Use analogies to stimulate ideas • Love for the venture and its
for innovative inventions. commercial success.
• Passion to invent lies in their love • Will do anything and everything for
for it rather than making money as the growth and survival of the
a motive. organization
Entrepreneurship • Love and enjoy inventions. • Love and enjoy translating
inventions into reality by superior
skills in execution.
Inspiration from Role Models and Social Inspiration from Role Models and Social
Support Support
• “Opportunistic” entrepreneurs who seizes opportunities as and

• “Craftsman” entrepreneurs: Individuals who follow in the footsteps

of family relations or role models who gave them early exposure to when they arise.
the craft they decide to follow as an entrepreneur.
• “Trained” entrepreneurs: Individuals who have undergone training
• “Like father like son” entrepreneurs: Closely aligned to the in the component skills of enterprise such as those offered in some
craftsman entrepreneur, this type of entrepreneur enters a MBA programmes.
business with father/mother as role model.
• “Off the farm” entrepreneurs: Individuals who have a fundamental

dislike for, or disagreement with their upbringing or some aspect of
it. This engenders a strong desire to break away from the mould
and be different.
Contd…
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8/9/2016
Entrepreneurship Support System Business Model

Idea Economic
Value
Professional
Support
System Revenue
Innovation Technology Margins
Model
Support
System
Business Model
Social and
Moral
Psychological
Support
Support
Entrepreneurship Mindset Cultivating Mindset
Mind-Set

Awareness
Entrepreneurship Cultivating
Affirmation Understanding
Mind Set
Entrepreneurial
Attitude
Leadership
Disassociation
Big Companies versus Start-ups Misconceptions and Myths About

Entrepreneurship
Start-ups Big Companies • Entrepreneurs are risk takers.
• Entrepreneurship begins with a • Develops strong roots to

• Entrepreneurship is all about money and getting rich quickly.
start up become a well established
• Starting a business requires lot of money.
• Challenge faced by start-ups company
• Entrepreneurs are born.
• Great passion to pursue their • Relatively less challenging
• Entrepreneurship requires high-tech invention.
goals with a hunger to grow • Smooth operations with a well
• Ignorance is a bliss for entrepreneurs.
• Decision making is quick as defined product and service
• Entrepreneurs requires expertise and experience in their line of
command lies usually with one characteristics
business.
man and there is lack of • Well tested business models
• Venture capital funding is a must.
hierarchy in the organization • Job roles are professionally
• Banks do not lend money to start-ups.
• Flexibility to get adjusted to handled by different functional
• Starting a business is easy.
changing environment teams

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8/9/2016

Chapter 1 Learning Objectives

• To understand the need for entrepreneurship.

Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd.

Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd.

• To know and learn about entrepreneurship as a key to

• To understand different type of innovations and their implications.

• To understand, how concept of entrepreneurship evolved over the

• To define entrepreneurship, and know about entrepreneurial traits.

Learning Objectives Critical Input that Play a Key Role in

• To know and understand difference between inventors and

Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd.

• To understand the importance of mindset in entrepreneurship.

• To know about misconceptions and myths about

Entrepreneurship and Wealth Creation Key to Development—Spirit and Mindset of

Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd.

Entrepreneurship and Economic Entrepreneurship Accelerates Growth and

Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd.

Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd.

Expansion • In case it does not evolve from within, at a local, regional or

Types of Innovations Different Types of Innovations

• Product innovation which results in creation of new products or

Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd.

Evolving Concept of Entrepreneurship Evolving Concept of Entrepreneurship

• Earliest period: More by way of a merchant and a capitalist

Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd.

wherein merchant used to be adventurer who took a key role in

• Middle ages can be classified as the cleric – the person overseeing

• In the 17th century the concept of risk associated with

Entrepreneurship Defined Entrepreneurship Defined

Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd.

Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd.

• Introduced the concept of risk by highlighting that entrepreneur is

As per Robert Hébert and Albert, an entrepreneur is

Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd.

Entrepreneurship—Introduction Wikipedia Says ---

Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd.

• In short, entrepreneurship is a process of creating something new

What is Entrepreneurship? Three Key Components of

Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd.

Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd.

Entrepreneurs—Challenging the Unknown Entrepreneurship Success Through Value

Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd.

Creating Competitive Advantage Through Type of Resources

Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd.

Traits of an Entrepreneur Traits of an Entrepreneur

• Individuals having intense desire and focus for significant

Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd.

Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd.

Need for Excellent Dynamic

Uncertainty of an outcome Perceived control over the

Entrepreneurship Defined Difference Between Inventors and

Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd.

• “Opportunistic” entrepreneurs who seizes opportunities as and

Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd.

• “Craftsman” entrepreneurs: Individuals who follow in the footsteps

• “Off the farm” entrepreneurs: Individuals who have a fundamental

Entrepreneurship Support System Business Model

Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd.

Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd.

Entrepreneurship Mindset Cultivating Mindset

Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd.

Big Companies versus Start-ups Misconceptions and Myths About

Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd.