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Aset unit – 1 (concepts of Entrepreneurs)

 Concept and importance of entrepreneurship (Important)

 Entrepreneur role, task and personality (important)
 Theoretical perspective of entrepreneurship
 Entrepreneurship intention, entrepreneurship orientation
 Type of entrepreneurship
 Understanding the entrepreneurship prospective in individual
 Developing creativity and understanding innovation (important)

Entrepreneur

An entrepreneur is the agent who buy factor of production at certain price in order to complete them into a
product with a view to selling at uncertain price in future.

or

Entrepreneur is an economic agent who unit all means of production – land of one, the lab our of another
and the capital of other and thus produce a product.

To conclude an entrepreneur who bear risk, unit various factors of production and carries out innovation.

Concepts of Entrepreneurship

Entrepreneurship is the purposeful activity of an individual or a group of associated individuals undertaken

to initiate, maintain and aggrandize profit by production or distribution of economic goods and services.

Entrepreneurship and Intrapreneurship

Intrapreneurship or corporate entrepreneurship is the process by which new venture are born within the
confines of an existing corporation. It involves expansion by exploring new opportunities through. New
combination of existing resources. The concepts of intrapreneurship require that top executives inside the
company should be encouraged to be entrepreneur within in the entrepreneur rather than go outside.

1. An entrepreneur is an independent businessman whereas an intrapreneur is semi –dependent on the

promoters / owner of the corporation.

2. An entrepreneur himself raises the necessary capital from various sources and guarantees return to
investors / creditors. On the other hand an intrapreneur neither raises the capital nor guarantees any return to
the suppliers of capital.
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3. An entrepreneur bears full risk of his business whereas an intrapreneur does not fully bear the risk of the
business he develops and operates.

4. An entrepreneur operates from outside whereas an intrapreneur in an organization man operating from
within the organization.

Nature and Characteristic of Entrepreneurship

 Economic activity
 Creative activity
 Purposeful activity
 A function of risk bearing
 An organization function
 Gap filling function
 Dynamic process
 Innovation function

Skills of an Entrepreneur

 Initiation
 Watching for opportunities
 Risk taker
 High degree of ambition
 Hardworking
 Vision and freightless
 Efficient monitoring self
 Confidence
 Ambitious
 Emotional mature
 Patience
 Problem solving attitude
 Quick and rational decision maker
 Flexible not rigid
 Professional
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 Information seeker

Motivation for Entrepreneur

 Education
 Experience
 Desire to do something innovative
 Family backup
 Government assistance
 Encouragement from big business unit
 High demand of product or service
 Problem in job or loss of job
 Make more money
 Dissatisfaction of job
 Make use of idle source
 Successful story of entrepreneurs
Motivation for establishing enterprises

(i) Internal factors – educational background

- Occupational experiences
- Desire to do something pioneering and innovative
- Desire to be free and independent
- Family background
(ii) External factors – assist stance from government
- Financial assistance from institutions
- Availability of technology and raw material
- Encouragement from big business units
- Heavy demand for product
- others

People do not start own business because

 High risk
 Lean period
 Family / friends/peers de motivate
 Financial problem
 More tension/stress/problem
 Personality
 Lack of confidence
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 Lack of ideas

Benefit to be Entrepreneur

 High profit. there is no limit of profit

 Freedom / independent
 Job satisfaction
 Assets carry forward
 Optimum utilization of talent and time
 No reporting
 No politics

Difference between Entrepreneur and Manager

1. Venture – An entrepreneur set up a new enterprise undertaken a venture for his personal gratification
whereas A manager does not take a new venture and renders service in an exiting enterprise.

2. Risk bearing – An entrepreneur assume risk of economic uncertainty involved in the enterprises’ manager
does not assume or share any risk involved in the enterprises is servicing.

3. Reward – The reward of an entrepreneur for his risk bearing role is profit. It is not only uncertain and
irregular but at times be negative also. The reward of a manager for rendering his service is salary which
unlike profit is fixed and regular and can never be negative.

4.In order to maximize the profit the entrepreneur applies innovation from time to time in the entrepricse.A
manager simply keeps running the entrepreneurs on already established line on a routine bases.

5. Role – An entrepreneur is his own boss and enjoys an independent status as the owner of the enterprises’
manager is a servant. He is not independent but depends on the entrepreneurs needs.

6. Requiremenr – Entrepreneur should have creative thinking, risk bearing ability, innovation. A manager
needs qualification, knowledge of human behavior management day to day affairs.

Entrepreneurship Development Program me

Entrepreneur are not necessary born they can be developed through education, training and experience.
Development of entrepreneurs means inculcating entrepreneur skill required for setting up and operating
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Business unit. It basic purpose is to motivate person for entrepreneur career and to make them capable of
perusing and exploring business opportunities. Entrepreneur development is not merely training program
me. It is a process of

1. Enhancing the motivation, knowledge and skill of potential entrepreneur.

2. Arousing and reforming the entrepreneur behavior in their day to day activities
3. Assessing them in developing their own venture.

An entrepreneur development program consists of the following phases.

i) Pre-training phase - Selection of person, infrastructure, contest, techniques, trainer

ii) Development phase _ Change in skill, attitude and behavior of participant
iii) Past – training phase _ effective of training, monitory and follow up will reveal short coming

Entrepreneurs Training Institute

1. National Institute for Entrepreneur and small Business Development, New Delhi
2. Entrepreneurship Development Institute of India,. Ahmadabad
3. National Alliance of Young Entrepreneur
4. Commercial Bank
5. Indian Investment Centre
6. Technical Consultancy centre

Environmental factors influencing entrepreneurship

Various environments influencing the emergence of entrepreneurship are given below.

1. Economic Condition ---capital, Lab our, Raw material , Market

2. Social Factor --- Legitimacy of Entrepreneurs, Social mobility, Security
3. Psychological Factor --- Need Achievement (McClelland)
4. Government Influence

Type of Entrepreneur

1. Innovating entrepreneur – introduced new goods, new method of production, discover new market,
reorganize the entrepreneur,
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2. Imitative entrepreneur – adopt successful innovation. Immitatitive entrepreneur do not innovate the
change themselves, they only imitate techniques, technology of others. Suitable for
underdevelopment country.
3. Fabian entrepreneur – very cautious and skepticism in experimenting any change, lazy and shy and
lack will to adopt new change method of product.
4. Drone entrepreneur – refuse to adopt opportunities to make change in production, even suffer losses
but they are not ready to make change in their existing production method. They struggle to exist, not
to grow. Laggard and continue to operate in their traditional way and resist change.

Significance / benefit of Entrepreneurship.

 Utilization of saving of public.

 Improvement in per capita income
 Generation of Employment
 Balanced regional development
 Improvement in living standard
 Earn foreign exchange
 Backward and Forward integration.
 Capital formation
 Economic independence

Entrepreneurs according to the type of business

 Business entrepreneur
 Trading entrepreneur
 Industrial entrepreneur
 Corporate entrepreneur
 Agriculture entrepreneur
 Technical entrepreneur
 Professional entrepreneur

Entrepreneur function / Functions of Entrepreneur

 Deciding the project

 Raising finance
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 Managing enterprise
 Organization Building
 Earning profit
 Innovation
 Risk bearing

Difference Entrepreneur and Entrepreneurship

 Refer to a person refer to a process

 Organizer organization
 Innovator innovation
 Initiator initiation
 Decision maker decision making
 Motivator motivation
 Risk taker risk taking
 Administrator administration

Entrepreneurial value or orientation of entrepreneur.

There are four values prominent among entrepreneurs these are directed towards.

(i) Innovation
(ii) Independent
(iii) Outstanding performance
(iv) Respect for work

Creativity, Innovation and Generation

Entrepreneur brings about changes in the use of recourses in a society. They setup new venture, which shift
the recourses into areas of higher productivity and grater yields. Entrepreneur is a process of wealth creation
and wealth accumulation.

Creativity

It is defined as the ability to bring something new into existence. A creative person must conceive of
something new and envision how it will be useful to the society.

Innovation

Innovation is the process of doing new things. While creative relates to the ability to conceive, the
innovation is doing new things. Innovative transforms creative ideas into useful applications. Hence
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creativity is a pre – requisites to innovation. As per Schumpeter a person is an entrepreneur only he is

engaged in innovative behavior. The innovative behavior is an entrepreneurial function

The creative process

 Task preparation
 Preparation
 Incubation
 Idea generation
 Idea validation
 Outcomes assessment

Role of an entrepreneur

 An individual who assumes uncertainty associated risk

 An individual who supplies financial capital
 A individual who start off a new venture
 A person who owns an enterprise
 An individual who allocate recourses among alternative uses
 A person who employs factor of production
 An individual who is a decision maker
 A person who has leadership qualities
 A person who manages
 An individual who is an organizer and coordinator of economic recourses
 An innovative person
 A person who is contractor
 A person who is an arbitrageur

Reasons for growth of entrepreneurship

 Industry structure
 New technology
 Deregulation and privatization
 Formation of new business communities
 Increasing demand for variety
 Service sector
 Government incentive and subsidies
 Increasing flow of information
 Easier access to resource
 Entrepreneur education
 Return on innovation
 Entrepreneur as a hero
 High regards for self employment
 Rising dissatisfaction at job
 Acceptance of Ex-entrepreneur in the job market