A

REPORT ON
CONTEMPORARY
ISSUE

“ENTREPRENEURS AND SKILL”

Submitted in partial fulfillment for the

Award of degree of
Master of Business Administration

Submitted By: Submitted To:

VIKAS PERIWAL SHILPIKHANDELWAL
MBA 2nd SEM H.O.D. {MBA DEPTT.}

APEX INSTITUTE OF ENGINEERING & TECHNOLOGY

SITAPURA, JAIPUR

2009-2011

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 ACKNOWLEDGEMENT

It gives me immense pleasure to present the REPORT on CONTEMPORARY

ISSUE ON “Entrepreneurs and Skill”.

I express my sincere gratitude & humble thanks to Mrs. Shilpi Khandelwal for giving
me an opportunity to undertake this valuable report. Her valuable inputs as project guide
& timely guidance through out the project work helped me to complete the project in
time.

My sincere thanks to all the respondents for their active participations & making the
report a representation of their preference.

Last but not the least I extend my thanks to all the people who were directly or indirectly
helped me during the project work.

SIGNATURE

Vikas Periwal

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Contents:-
01 Introduction Background…………………………………….……………..4

02 As a leader.……………………………………………………………………..4

03 Research into entrepreneurs …………………….…………………………5

04 Social Entrepreneur ……………………………….…………………………6

05 Seven Must-Have Skills Every Entrepreneur, Needs

Entrepreneurial Skills………………………………..………..…………….32

06 Discover What Makes an Entrepreneur Successful….........................34

07 Profiling An Entrepreneur? Use a Mirror………………………………...36

08 Entrepreneur Skills and Qualities….……………………………………...38

09 Entrepreneur Challenge…………………………………………………….40

10 Characteristic of Successful Entrepreneurs …………………….……..43

11 Entrepreneurship………………………………………..............................44

12 Entrepreneurship, Small Business and Innovation…………… ……...50

13 How Is Entrepreneurship Good for Economic Growth?.....................53

14 Entrepreneurship in INDIA…………………………………………… .…..54

15 Entrepreneurship: No Experience Necessary………...........................55

16 Skills Associated With Entrepreneurship…………………………….....58

17 Entrepreneurial Personality………………………………………………..59

18 Male Vs. Female Entrepreneurs…………………………………….…..…60

19 Conclusion………………………………………………………………..…..64

20 Bibliography………………………………………………………….……….67

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Entrepreneurs and Skills
An entrepreneur is a person who has possession of a new enterprise, venture or
idea and assumes significant accountability for the inherent risks and the
outcome. The term is originally a loanword from French and was first defined by
the Irish economist Richard Cantillon. Entrepreneur in English is a term applied
to the type of personality who is willing to take upon herself or himself a new
venture or enterprise and accepts full responsibility for the outcome. Jean-
Baptiste Say, a French economist is believed to have coined the word
"entrepreneur" first in about 1800. He said an entrepreneur is "one who
undertakes an enterprise, especially a contractor, acting as intermediatory
between capital and labour

1. Background and Introduction

Entrepreneurs choose a level of personal, professional or financial risk to pursue
opportunity.

Entrepreneurs tend to identify a market opportunity and exploit it by organizing

their resources effectively to accomplish an outcome that changes existing
interactions within a given sector.

Business entrepreneurs are viewed as fundamentally important in the capitalistic

society. Some distinguish business entrepreneurs as either "political
entrepreneurs" or "market entrepreneurs," while social entrepreneurs' principal
objectives include the creation of a net social benefit.]

Other entrepreneurs are necessity entrepreneurs. Entrepreneurship, particularly

among women in developing countries (Minitti, 2010) seems to offer an
improvement in the standard of living as well as a path out of poverty.
Entrepreneurship is now growing at nearly three times the rate among women as
it is among men.

2. As a leader
Scholar Robert. B. Reich considers leadership, management ability, and team-
building as essential qualities of an entrepreneur. This concept has its origins in
the work of Richard Cantillon in his Essai sur la Nature du Commerce en
Général (1755) and Jean-Baptiste Say (1803 or 1834) in his Treatise on Political
Economy.

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A more generally held theory is that entrepreneurs emerge from the population
on demand, from the combination of opportunities and people well-positioned to
take advantage of them. An entrepreneur may perceive that they are among the
few to recognize or be able to solve a problem. In this view, one studies on one
side the distribution of information available to would-be entrepreneurs and on
the other, how environmental factors (access to capital, competition, etc.),
change the rate of a society's production of entrepreneurs.

A prominent theorist of the Austrian School in this regard is Joseph Schumpeter,

who saw the entrepreneur as innovators and popularized the uses of the phrase
creative destruction to describe his view of the role of entrepreneurs in changing
business norms. Creative destruction dealt with the changes entrepreneurial
activity makes every time a new process, product or company enters the market.

3. Research into entrepreneurs

Schumpeter argues that the entrepreneur is an innovator, one that introduces
new technologies into the workplace or market, increasing efficiency, productivity
or generating new products or services (Deakins and Freel 2009). Other
academics such as Say, Casson and Cantillon, say the entrepreneur is an
organiser of factors or production that acts as a catalyst for economic change
(Deakins and Freel, 2009). Shackle argues that the entrepreneur is a highly
creative individual that imagines new solutions providing new opportunities for
reward (Deakins and Freel, 2009). These are a few definitions from the
entrepreneurship field but show the complexity and lack of cohesion between
academic research (Gartner, 2001). Most research focuses on the traits of the
entrepreneur. Cope (2001) argues that although certain entrepreneurial traits are
required the entrepreneurs behaviour are dynamic and influenced by
environmental factors.

Shane and VenKataraman (2000) argue the entrepreneur is solely concerned

with opportunity recognition and exploitation; however, the opportunity that is
recognized depends on the type of entrepreneur which Ucbasaran et al (2001)
argue there are many different types of dependant on their business and
personal circumstances.

There is a growing body of work that shows than entrepreneurial behavior is

dependent on social and economic factors. The research into female
entrepreneurs illustrates this quite clearly. "Countries which have healthy and
diversified labor markets or stronger safety nets show a more favorable ratio of
opportunity to necessity-driven women entrepreneurs." (Minitti, 2010) What those
factors are varies widely, based on local needs. In Somalia, this may be bigger
crops or clean water while in the US, technology seems to be the driving factor.

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4. Social Entrepreneur
Social entrepreneurs act within a market aiming to create social value through
the improvement of goods and services offered to the community. Their main aim
is to help offer a better service improving the community as a whole and are
predominately run as non profit schemes. To support this point Zahra et al (2009:
519) said that “social entrepreneurs make significant and diverse contributions to
their communities and societies, adopting business models to offer creative
solutions to complex and persistent social problems”. Examples of socially run
businesses include the NHS and also the 'Love One Water' drinks brand.

• Entrepreneurship education
• Factors of production
• Infopreneur
• Leadership

4.1. Entrepreneurship education

Entrepreneurship education seeks to provide students with the

knowledge, skills and motivation to encourage entrepreneurial success in a
variety of settings. Variations of entrepreneurship education are offered at all
levels of schooling from K-12 schools through graduate university programs.

What makes entrepreneurship education distinctive is its focus on realization of

opportunity, where management education is focused on the best way to operate
existing hierarchies. Both approaches share an interest in achieving "profit" in
some form (which in non-profit organizations or government can take the form of
increased services or decreased cost or increased responsiveness to the
customer/citizen/client).

Opportunities can be realized in several ways. The most popular one is through
opening a new organization (e.g. starting a new business). Another approach is
to promote innovation or introduce new products or services or markets in
existing firms. Newer research indicates that clustering is now a driving factor.
Clustering occurs when a group of employees breaks off from the parent
company to found a new company but continues to do business with the parent.
Silicon Valley is one such cluster, grown very large. (Minitti, 2010)

This approach is called corporate entrepreneurship or entrepreneurship, and was

made popular by author Gifford Pinchot in his book of the same name. A recent
approach involves creating charitable organizations (or portions of existing
charities) which are designed to be self-supporting in addition to doing their good
works. This is usually called social entrepreneurship or social venturing. Even a
version of public sector entrepreneurship has come into being in governments,
with an increased focus on innovation and customer service. This approach got

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its start in the policies of the United Kingdom's Margaret Thatcher and the United
States' Ronald Reagan.

The 1990s saw the growth of entrepreneurship as a profession within business,

and in that professional approach lies the secret benefit of entrepreneurship
education — it helps decrease the chances of failure by stressing a consistent
and proven set of practices. That idea of professionalizing the process of
entrepreneurship is the other great commonality across all of modern
entrepreneurship education. Whether it is Junior Achievement of America, or
Treps, the National Foundation for Teaching Entrepreneurship or members of the
Consortium for Entrepreneurship Education working with grade school and high
school kids in the USA, or undergraduate or MBA programs like those at USC
Entrepreneur Program, Babson College, Saint Louis University, or any of the
over 200 schools with majors (EntrepreneurEDU.org for a listing), there are
formal entrepreneurship education programs turning out tens of thousands of
prepared, motivated and connected student entrepreneurs each year. There are
also non-profit organizations such as SCORE, government programs such as the
U.S. Small Business Administration, and for-profit organizations like
StudentBusinesses.com. With entrepreneurship education, they know more,
others (like bankers, investors, corporate customers, etc.) know what these
student entrepreneurs are likely to know, and the entrepreneurs', their firms, and
national economy are better off for their taking the time to learn how to do it right.

4.2. Factors of production

In economics, factors of production (or productive inputs) are the

resources employed to produce goods and services. They facilitate production
but do not become part of the product (as with raw materials) or become
significantly transformed by the production process (as with fuel used to power
machinery). To 19th century economists, the factors of production were land
(natural resources, gifts from nature), labor (the ability to work), and capital
goods (human-made tools and equipment). Recent textbooks have added
entrepreneurship and "human capital" (labor's education and skills)VLP"Land"
can include ecosystems while sometimes the overall state of technology is seen
as a factor of production In any event, it is the scarcity of the factors of production
which poses humanity's economic problem, often forcing us to choose between
competing goals. The number and definition of factors varies, depending on
theoretical purpose, empirical emphasis, or school of economics.

Differences are most stark when it comes to deciding which factor is the most
important. For example, in the Austrian view—often shared by neoclassical and
other "free market" economists—the primary factor of production is the time of
the entrepreneur, which, when combined with other factors, determines the
amount of output of a particular good or service. However, other authors argue

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that "entrepreneurship" is nothing but a specific kind of labor or human capital
and should not be treated separately. The Marxian school goes further, seeing
labor (in general, including entrepreneurship) as the primary factor of production,
since it is required to produce capital goods and to utilize the gifts of nature. But
this debate is more about basic economic theory (the role of the factors in the
economy) than it is about the definition of the factors of production.

• 4.2.1 Historical schools and factors

o 4.2.1.1 Physiocracy
o 4.2.1.2 Classical
o 4.2.1.3 Marxian
o 4.2.1.4 Neoclassical economics
o 4.2.1.5 Further distinctions
• 4.2.2 A fourth factor?
o 4.2.2.1 Entrepreneurship
o 4.2.2.2 Human capital
o 4.2.2.3 Intellectual capital
o 4.2.2.4 Social capital

4.2.1. Historical schools and factors

In the interpretation of the currently dominant view of classical economic theory

developed by neoclassical economists, the term "factors" did not exist until after
the classical period and is not to be found in any of the literature of that time.[4]

4.2.1.1 Physiocracy

In French Physiocracy, the main European school of economics before Adam

Smith, the productive process is explained as the interaction between
participating classes of the population. These classes are therefore the factors
of production within physiocracy: capital, entrepreneurship, land, and labor.

• The farmer labors on land (sometimes using "crafts") to produce food,

fiber, and the like.
• The artisan labors to produce important capital goods (crafts) to be used
by the other economic actors.
• The landlord is only a consumer of food and crafts and produces nothing
at all.
• The merchant labors to export food in exchange for foreign imports.

4.2.1.2 Classical

An advertisement for labour from Sabah and Sarawak, seen in Jalan Petaling,
Kuala Lumpur.

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The classical economics of Smith, Ricardo, and their followers focuses on
physical resources in defining its factors of production, and discusses the
distribution of cost and value among these factors. Adam Smith and David
Ricardo referred to the "component parts of price as the costs of using:

• Land or natural resource – naturally-occurring goods such as water, air,

soil, minerals, flora and fauna that are used in the creation of products.
The payment for land use and the received income of a land owner is rent.
• Labor – human effort used in production which also includes technical and
marketing expertise. The payment for someone else's labor and all income
received from ones own labor is wages. Labour can also be classified as
the physical and mental contribution of an employee to the production of
the good(s).
• The capital stock – human-made goods (or means of production) which
are used in the production of other goods. These include machinery, tools
and buildings.

The classical economists also employed the word "capital" in reference to

money. Money however was not considered to be a factor of production in the
sense of capital stock, since it is not used to directly produce any good. The
return to loaned money or to loaned stock was styled as interest while the return
to the actual proprietor of capital stock (tools, etc) was styled as profit.

4.2.1.3 Marxian

Marx considered the "elementary factors of the labor-process" or "productive

forces" to be:

• Labor ("work itself")

• The subject of labor (objects transformed by labor)
• The instruments of labor (or means of production).

The "subject of labor" refers to natural resources

and raw materials, including land. The "instruments
of labor" are tools, in the broadest sense. They
include factory buildings, infrastructure, and other
human-made objects that facilitate labor's
production of goods and services.

This view seems similar to the classical perspective

described above. But unlike the classical school
and many economists today, Marx made a clear
distinction between labor actually done and an
individual's "labor power" or ability to work. Labor
done is often referred to nowadays as "effort" or "labor services." Labor-power
might be seen as a stock which can produce a flow of labor.

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Labor, not labor power, is the key factor of production for Marx and the basis for
Marx's labor theory of value. The hiring of labor power only results in the
production of goods or services ("use-values") when organized and regulated
(often by the "management"). How much labor is actually done depends on the
importance of conflict or tensions within the labor process.

4.2.1.4 Neoclassical economics

Neoclassical economics, the currently dominant school of economics, started

with the classical factors of production of land, labor, and capital. However, it
developed an alternative theory of value and distribution. Many of its practitioners
have added a fourth factor of production.

4.2.1.5 Further distinctions

Further distinctions from classical and neoclassical microeconomics include the

following:

• Capital – This has many meanings, including the financial capital raised to
operate and expand a business. In much economics, however, "capital"
(without any qualification) means goods that can help produce other
goods in the future, the result of investment. It refers to machines, roads,
factories, schools, infrastructure, and office buildings which humans have
produced in order to produce goods and services.
• Fixed capital – This includes machinery, factories, equipment, new
technology, factories, buildings, computers, and other goods that are
designed to increase the productive potential of the economy for future
years. Nowadays, many consider computer software to be a form of fixed
capital and it is counted as such in the National Income and Product
Accounts of the United States and other countries. This type of capital
does not change due to the production of the good.
• Working capital – This includes the stocks of finished and semi-finished
goods that will be economically consumed in the near future or will be
made into a finished consumer good in the near future. These are often
called inventories. The phrase "working capital" has also been used to
refer to liquid assets (money) needed for immediate expenses linked to
the production process (to pay salaries, invoices, taxes, interests...) Either
way, the amount or nature of this type of capital usually changed during
the production process.
• Financial capital - This is simply the amount of money the initiator of the
business has invested in it. "Financial capital" often refers to his or her net
worth tied up in the business (assets minus liabilities) but the phrase often
includes money borrowed from others.

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4.2.2. A fourth factor?

As mentioned, recent authors have added to the classical list. For example, J.B.
Clark saw the co-ordinating function in production and distribution as being
served by entrepreneurs; Frank Knight introduced managers who co-ordinate
using their own money (financial capital) and the financial capital of others. In
contrast, many economists today consider "human capital" (skills and education)
as the fourth factor of production, with entrepreneurship as a form of human
capital. Yet others refer to intellectual capital. More recently, many have begun to
see "social capital" as a factor, as contributing to production of goods and
services.

4.2.2.1. Entrepreneurship

Consider entrepreneurship as a factor of production, leaving debate aside. In

markets, entrepreneurs combine the other factors of production, land, labor, and
capital in order to make a profit. Often these entrepreneurs are seen as
innovators, developing new ways to produce and new products. In a planned
economy, central planners decide how land, labor, and capital should be used to
provide for maximum benefit for all citizens. Of course, just as with market
entrepreneurs, the benefits may mostly accrue to the entrepreneurs themselves.

The word has been used in other ways. The sociologist C. Wright Mills refers to
"new entrepreneurs" who work within and between corporate and government
bureaucracies in new and different ways. Others (such as those practicing public
choice theory) refer to "political entrepreneurs," i.e., politicians and other actors.

Much controversy rages about the benefits produced by entrepreneurship. But

the real issue is about how well institutions they operate in (markets, planning,
bureaucracies, government) serve the public. This concerns such issues as the
relative importance of market failure and government failure.

4.2.2.2. Human capital

Contemporary analysis distinguishes tangible, physical, or nonhuman capital

goods from other forms of capital such as human capital. Human capital is
embodied in a human being and is acquired through education and training,
whether formal or on the job.

Human capital is important in modern economic theory. Education is a key

element in explaining economic growth over time (see growth accounting). It is
also often seen as the solution to the "Leontief paradox" in international trade.

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4.2.2.3. Intellectual capital

A more recent coinage is intellectual capital, used especially as to information

technology, recorded music, written material. This intellectual property is
protected by copyrights, patents, and trademarks.

This view posits a new Information Age, which changes the roles and nature of
land, labour, and capital. During the Information Age (circa 1971-1991), the
Knowledge Age (circa 1991 to 2002), and the Intangible Economy (2002–
present) many see the primary factors of production as having become less
concrete. These factors of production are now seen as knowledge, collaboration,
process-engagement, and time quality.

According to economic theory, a "factor of production" is used to create value

and allow economic performance. As the four "modern-day" factors are all
essentially abstract, the current economic age has been called the Intangible
Economy. Intangible factors of production are subject to network effects and the
contrary economic laws such as the law of increasing returns.

4.2.2.4. Social capital

Social capital is often hard to define, but to one textbook it is:

the stock of trust, mutual understanding, shared values, and socially held knowledge that
facilitates the social coordination of economic activity.

Knowledge, ideas, and values, and human relationships are transmitted as part
of the culture. This type of capital cannot be owned by individuals and is instead
part of the common stock owned by humanity. But they often crucial to
maintaining a peaceful society in which normal economic transactions and
production can occur.

Another kind of social capital can be owned individually. This kind of individual
asset involves reputation, what accountants call "goodwill," and/or what others
call "street cred," along with fame, honor, and prestige. It fits with Pierre
Bourdieu’s definition of "social capital" as:

an attribute of an individual in a social context. One can acquire social capital through
purposeful actions and can transform social capital into conventional economic gains.
The ability to do so, however, depends on the nature of the social obligations,
connections, and networks, available to you.

This means that the value of individual social assets that Bourdieu points to
depend on the current "social capital" as defined above.

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4.3. Infopreneur
Infopreneur is a person whose primary business is gathering and selling
electronic information. This term is a neologism portmanteau derived from the
words "information" and "entrepreneur". An infopreneur is generally considered
an entrepreneur who makes money selling information on the Internet. They use
existing data and target an audience.

The term is often used on the Internet. The word infopreneur was registered as a
trademark (USPTO) on February 1 1984 by Harold F. Weitzen. In 1988, H. Skip
Weitzen published "Infopreneurs: Turning Data Into Dollars" (John Wiley &
Sons).

Before the explosive popularity of the Internet, at the turn of the millennium, such
an occupation already existed. These legacy inforpreneurs sold their information
in other mediums such as audio tapes, audio CDs, CD-ROMs, videos, talk
shows, and conferences. The classification of infopreneur has created a new
style of business on the Internet, which allows anybody with a computer and an
Internet connection to start a businesses by publishing information that may
appeal to a specific market.

There are generally two kinds of infopreneurs: those that sell information they
have amassed on their own and those that earn commissions from selling
information that they know nothing about. The latter may be considered more of
a "information trafficker".

Online publishing

As the infopreneur is his/her own developer, marketer, producer, and distributor -

some infopreneurs consider themselves being in the publishing business. Unlike
in traditional print publishing, the infopreneur puts down, in electronic form, what
he/she knows from experience or what he/she learned and passes them on to
the world through publishing on websites, blogs, ebooks, emails, etc

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4.4 Leadership
Leadership is stated as the “process of social influence in which one
person can enlist the aid and support of others in the accomplishment of a
common task.” Definitions more inclusive of followers have also emerged. Alan
Keith of Genentech states that, "Leadership is ultimately about creating a way for
people to contribute to making something extraordinary happen." Tom DeMarco
says that leadership needs to be distinguished from posturing.

Leadership remains one of the most relevant aspects of the organizational

context. However, defining leadership has been challenging and definitions can
vary depending on the situation. According to Ann Marie E. McSwain, Assistant
Professor at Lincoln University, “leadership is about capacity: the capacity of
leaders to listen and observe, to use their expertise as a starting point to
encourage dialogue between all levels of decision-making, to establish
processes and transparency in decision-making, to articulate their own values
and visions clearly but not impose them. Leadership is about setting and not just
reacting to agendas, identifying problems, and initiating change that makes for
substantial improvement rather than managing change.”

The following sections discuss several important aspects of leadership including

a description of what leadership is and a description of several popular theories
and styles of leadership. This article also discusses topics such as the role of
emotions and vision, as well as leadership effectiveness and performance,
leadership in different contexts, how it may differ from related concepts (i.e.,
management), and some critiques of leadership as generally conceived.

• 4.4.1 Theories of leadership

o 4.4.1.1 Trait Theory
 4.4.1.1.1 Early History
 4.4.1.1.2 The Rise of Alternative Leadership Theories
 4.4.1.1.3 The Reemergence of the Trait Theory
 4.4.1.1.4 Current Criticisms of the Trait Theory
 4.4.1.1.5 Leader Attribute Pattern Approach
o 4.4.1.2 Behavioral and style theories
o 4.4.1.3 Situational and contingency theories
o 4.4.1.4 Functional theory
o 4.4.1.5 Transactional and transformational theories
o 4.4.1.6 Leadership and emotions
o 4.4.1.7 Neo-emergent theory

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 o 4.4.1.8 Environmental leadership theory
• 4.4.2 Leadership styles
o 4.4.2.1 Kurt Lewin's Leadership styles
 4.4.2.1.1 Autocratic or Authoritarian Leaders
 4.4.2.1.2 Participative or Democratic Leaders
 4.4.2.1.3 Laissez-Faire or Free Rein Leaders
• 4.4.3 Leadership performance
• 4.4.4 Contexts of leadership
o 4.4.4.1 Leadership in organizations
o 4.4.4.2 Leadership versus management
o 4.4.4.3 Leadership by a group
o 4.4.4.4 Leadership among primates
• 4.4.5 Historical views on leadership
• 4.4.6 Action Oriented Team Leadership Skills
• 4.4.7 Titles emphasizing authority

• 4.4.8 Critical Thought on the concept of leadership

Theories of leadership

Students of leadership have produced theories involving traits, situational

interaction, function, behavior, power, vision and values, charisma, and
intelligence among others.

* Trait Theory

Trait theory tries to describe the characteristics associated with effective

leadership.

Early History
The search for the characteristics or traits of leaders has been ongoing for
centuries. History’s greatest philosophical writings from Plato’s Republic to
Plutarch’s Lives have explored the question of “What qualities distinguish
an individual as a leader?” Underlying this search was the early
recognition of the importance of leadership and the assumption that
leadership is rooted in the characteristics that certain individuals possess.
This idea that leadership is based on individual attributes is known as the
“trait theory of leadership.”
This view of leadership, the trait theory, was explored at length in a
number of works in the previous century. Most notable are the writings of
Thomas Carlyle and Francis Galton, whose works have prompted
decades of research. In Heroes and Hero Worship (1841), Carlyle
identified the talents, skills, and physical characteristics of men who rose
to power. In Galton’s (1869) Hereditary Genius, he examined leadership
qualities in the families of powerful men. After showing that the numbers of
eminent relatives dropped off when moving from first degree to second

15
 degree relatives, Galton concluded that leadership was inherited. In other
words, leaders were born, not developed. Both of these notable works lent
great initial support for the notion that leadership is rooted in
characteristics of the leader.
For decades, this trait-based perspective dominated empirical and
theoretical work in leadership. Using early research techniques,
researchers conducted over a hundred studies proposing a number of
characteristics that distinguished leaders from nonleaders: intelligence,
dominance, adaptability, persistence, integrity, socioeconomic status, and
self-confidence just to name a few.

The Rise of Alternative Leadership Theories

In the late 1940s and early 1950s, however, a series of qualitative reviews
of these studies (e.g., Bird, 1940; Stogdill, 1948; Mann, 1959) prompted
researchers to take a drastically different view of the driving forces behind
leadership. In reviewing the extant literature, Stogdill and Mann found that
while some traits were common across a number of studies, the overall
evidence suggested that persons who are leaders in one situation may not
necessarily be leaders in other situations. Subsequently, leadership was
no longer characterized as an enduring individual trait, as situational
approaches (see alternative leadership theories below) posited that
individuals can be effective in certain situations, but not others. This
approach dominated much of the leadership theory and research for the
next few decades.

The Reemergence of the Trait Theory

New methods and measurements were developed after these influential
reviews that would ultimately reestablish the trait theory as a viable
approach to the study of leadership. For example, improvements in
researchers’ use of the round robin research design methodology allowed
researchers to see that individuals can and do emerge as leaders across
a variety of situations and tasks. Additionally, during the 1980s statistical
advances allowed researchers to conduct meta-analyses, in which they
could quantitatively analyze and summarize the findings from a wide array
of studies. This advent allowed trait theorists to create a comprehensive
and parsimonious picture of previous leadership research rather than rely
on the qualitative reviews of the past. Equipped with new methods,
leadership researchers revealed the following:

• Individuals can and do emerge as leaders across a variety of

situations and tasks
• Significant relationships exist between leadership and such
individual traits as:

• intelligence
• adjustment

16
 • extraversion
• conscientiousness
• openness to experience
• general self-efficacy

Current Criticisms of the Trait Theory

While the trait theory of leadership has certainly regained popularity, its
reemergence has not been accompanied by a corresponding increase in
sophisticated conceptual frameworks.
Specifically, Zaccaro (2007) noted that trait theories still:

1. Focus on a small set of individual attributes such as Big Five

personality traits, to the neglect of cognitive abilities, motives,
values, social skills, expertise, and problem-solving skills
2. Fail to consider patterns or integrations of multiple attributes
3. Do not distinguish between those leader attributes that are
generally not malleable over time and those that are shaped by,
and bound to, situational influences
4. Do not consider how stable leader attributes account for the
behavioral diversity necessary for effective leadership

*Leader Attribute Pattern Approach

Considering the criticisms of the trait theory outlined above, several
researchers have begun to adopt a different perspective of leader
individual differences - the leader attribute pattern approach. In contrast to
the traditional approach, the leader attribute pattern approach is based on
theorists’ arguments that the influence of individual characteristics on
outcomes is best understood by considering the person as an integrated
totality rather than a summation of individual variables. In other words, the
leader attribute pattern approach argues that integrated constellations or
combinations of individual differences may explain substantial variance in
both leader emergence and leader effectiveness beyond that explained by
single attributes, or by additive combinations of multiple attributes.

* Behavioral and style theories

In response to the early criticisms of the trait approach, theorists began to

research leadership as a set of behaviors, evaluating the behavior of 'successful'
leaders, determining a behavior taxonomy and identifying broad leadership
styles. David, for example, Leadership takes a strong personality with a well
developed positive ego. Not so much as a pattern of motives, but a set of traits is
crucial. To lead; self-confidence and a high self-esteem is useful, perhaps even
essential. [Kevin Mick]

Kurt Lewin, Ronald Lipitt, and Ralph White developed in 1939 the seminal work
on the influence of leadership styles and performance. The researchers

17
evaluated the performance of groups of eleven-year-old boys under different
types of work climate. In each, the leader exercised his influence regarding the
type of group decision making, praise and criticism (feedback), and the
management of the group tasks (project management) according to three styles:
(1) authoritarian, (2) democratic and (3) laissez-faire. Authoritarian climates were
characterized by leaders who make decisions alone, demand strict compliance to
his orders, and dictate each step taken; future steps were uncertain to a large
degree. The leader is not necessarily hostile but is aloof from participation in
work and commonly offers personal praise and criticism for the work done.
Democratic climates were characterized by collective decision processes,
assisted by the leader. Before accomplishing tasks, perspectives are gained from
group discussion and technical advice from a leader. Members are given choices
and collectively decide the division of labor. Praise and criticism in such an
environment are objective, fact minded and given by a group member without
necessarily having participated extensively in the actual work. Laissez faire
climates gave freedom to the group for policy determination without any
participation from the leader. The leader remains uninvolved in work decisions
unless asked, does not participate in the division of labor, and very infrequently
gives praise. The results seemed to confirm that the democratic climate was
preferred.

The managerial grid model is also based on a behavioral theory. The model was
developed by Robert Blake and Jane Mouton in 1964 and suggests five different
leadership styles, based on the leaders' concern for people and their concern for
goal achievement.

B.F. Skinner is the father of Behavior Modification and developed the concept of
positive reinforcement. Positive reinforcement occurs when a stimulus is
presented contingent upon a behavior which results in a higher probability of that
behavior increasing in the future. The following is an example of how positive
reinforcement can be used in a business setting. Assume praise is a positive
reinforce for a particular employee. This employee does not show up to work on
time every day. The manager of this employee decides to praise the employee
for showing up on time every day the employee actually shows up to work on
time. As a result, the employee comes to work on time more often because the
employee likes to be praised. In this example, praise (i.e. stimulus) is a positive
reinforce for this employee because the employee arrives (i.e. behavior) to work
on time more frequently after being praised for showing up to work on time.

The use of positive reinforcement is a successful and growing technique used by

leaders to motivate and attain desired behaviors from subordinates.
Organizations such as Frito-Lay, 3M, B.F. Goodrich, Michigan Bell, and Emery
Air Freight have all used reinforcement to increase productivity. Empirical
research covering the last 20 years suggests that reinforcement theory has a 17
percent increase in performance. Additionally, many reinforcement techniques

18
such as the use of praise are inexpensive which can result in higher
performances for low monetary costs.

* Situational and contingency theories

Situational theory also appeared as a reaction to the trait theory of leadership.

Social scientists argued that history was more than the result of intervention of
great men as Carlyle suggested. Herbert Spencer (1884) said that the times
produce the person and not the other way around. This theory assumes that
different situations call for different characteristics; according to this group of
theories, no single optimal psychographic profile of a leader exists. According to
the theory, "what an individual actually does when acting as a leader is in large
part dependent upon characteristics of the situation in which he functions."

Some theorists started to synthesize the trait and situational approaches.

Building upon the research of Lewin et al., academics began to normalize the
descriptive models of leadership climates, defining three leadership styles and
identifying in which situations each style works better. The authoritarian
leadership style, for example, is approved in periods of crisis but fails to win the
"hearts and minds" of their followers in the day-to-day management; the
democratic leadership style is more adequate in situations that require
consensus building; finally, the laissez faire leadership style is appreciated by the
degree of freedom it provides, but as the leader does not "take charge", he can
be perceived as a failure in protracted or thorny organizational problems.[ Thus,
theorists defined the style of leadership as contingent to the situation, which is
sometimes classified as contingency theory. Four contingency leadership
theories appear more prominently in the recent years: Fiedler contingency model,
Vroom-Yetton decision model, the path-goal theory, and the Hersey-Blanchard
situational theory.

The Fiedler contingency model bases the leader’s effectiveness on what Fred
Fiedler called situational contingency. This results from the interaction of
leadership style and situational favorableness (later called "situational control").
The theory defined two types of leader: those who tend to accomplish the task by
developing good-relationships with the group (relationship-oriented), and those
who have as their prime concern carrying out the task itself (task-oriented)
According to Fiedler, there is no ideal leader. Both task-oriented and relationship-
oriented leaders can be effective if their leadership orientation fits the situation.
When there is a good leader-member relation, a highly structured task, and high
leader position power, the situation is considered a "favorable situation". Fiedler
found that task-oriented leaders are more effective in extremely favourable or
unfavorable situations, whereas relationship-oriented leaders perform best in
situations with intermediate favorability.

Victor Vroom, in collaboration with Phillip Yetton (1973) and later with Arthur
Jago (1988), developed a taxonomy for describing leadership situations,

19
taxonomy that was used in a normative decision model where leadership styles
where connected to situational variables, defining which approach was more
suitable to which situation. This approach was novel because it supported the
idea that the same manager could rely on different group decision making
approaches depending on the attributes of each situation. This model was later
referred as situational contingency theory.

The path-goal theory of leadership was developed by Robert House (1971) and
was based on the expectancy theory of Victor Vroom. According to House, the
essence of the theory is "the meta proposition that leaders, to be effective,
engage in behaviors that complement subordinates' environments and abilities in
a manner that compensates for deficiencies and is instrumental to subordinate
satisfaction and individual and work unit performance. The theory identifies four
leader behaviors, achievement-oriented, directive, participative, and supportive,
that are contingent to the environment factors and follower characteristics. In
contrast to the Fiedler contingency model, the path-goal model states that the
four leadership behaviors are fluid, and that leaders can adopt any of the four
depending on what the situation demands. The path-goal model can be classified
both as a contingency theory, as it depends on the circumstances, but also as a
transactional leadership theory, as the theory emphasizes the reciprocity
behavior between the leader and the followers.

The situational leadership model proposed by Hersey and Blanchard suggests

four leadership-styles and four levels of follower-development. For effectiveness,
the model posits that the leadership-style must match the appropriate level of
fellowship-development. In this model, leadership behavior becomes a function
not only of the characteristics of the leader, but of the characteristics of followers
as well.

* Functional theory

Functional leadership theory (Hackman & Walton, 1986; McGrath, 1962) is a

particularly useful theory for addressing specific leader behaviors expected to
contribute to organizational or unit effectiveness. This theory argues that the
leader’s main job is to see that whatever is necessary to group needs is taken
care of; thus, a leader can be said to have done their job well when they have
contributed to group effectiveness and cohesion (Fleishman et al., 1991;
Hackman & Wageman, 2005; Hackman & Walton, 1986). While functional
leadership theory has most often been applied to team leadership (Zaccaro,
Rittman, & Marks, 2001), it has also been effectively applied to broader
organizational leadership as well (Zaccaro, 2001). In summarizing literature on
functional leadership (see Kozlowski et al. (1996), Zaccaro et al. (2001),
Hackman and Walton (1986), Hackman & Wageman (2005), Morgeson (2005)),
Klein, Zeigert, Knight, and Xiao (2006) observed five broad functions a leader
performs when promoting organisation's effectiveness. These functions include:
(1) environmental monitoring, (2) organizing subordinate activities, (3) teaching

20
and coaching subordinates, (4) motivating others, and (5) intervening actively in
the group’s work.

A variety of leadership behaviors are expected to facilitate these functions. In

initial work identifying leader behavior, Fleishman (1953) observed that
subordinates perceived their supervisors’ behavior in terms of two broad
categories referred to as consideration and initiating structure. Consideration
includes behavior involved in fostering effective relationships. Examples of such
behavior would include showing concern for a subordinate or acting in a
supportive manner towards others. Initiating structure involves the actions of the
leader focused specifically on task accomplishment. This could include role
clarification, setting performance standards, and holding subordinates
accountable to those standards.

* Transactional and transformational theories

Eric Berne first analyzed the relations between a group and its leadership in
terms of Transactional Analysis.

The transactional leader (Burns, 1978) is given power to perform certain tasks
and reward or punish for the team’s performance. It gives the opportunity to the
manager to lead the group and the group agrees to follow his lead to accomplish
a predetermined goal in exchange for something else. Power is given to the
leader to evaluate, correct and train subordinates when productivity is not up to
the desired level and reward effectiveness when expected outcome is reached.

The transformational leader (Burns, 1978) motivates its team to be effective

and efficient. Communication is the base for goal achievement focusing the
group on the final desired outcome or goal attainment. This leader is highly
visible and uses chain of command to get the job done. Transformational leaders
focus on the big picture, needing to be surrounded by people who take care of
the details. The leader is always looking for ideas that move the organization to
reach the company’s vision.

* Leadership and emotions

Leadership can be perceived as a particularly emotion-laden process, with

emotions entwined with the social influence process. In an organization, the
leaders’ mood has some effects on his/her group. These effects can be
described in 3 levels:

1. The mood of individual group members. Group members with leaders in a

positive mood experience more positive mood than do group members
with leaders in a negative mood.The leaders transmit their moods to other
group members through the mechanism of emotional contagion[46].Mood

21
 contagion may be one of the psychological mechanisms by which
charismatic leaders influence followers.
2. The affective tone of the group. Group affective tone represents the
consistent or homogeneous affective reactions within a group. Group
affective tone is an aggregate of the moods of the individual members of
the group and refers to mood at the group level of analysis. Groups with
leaders in a positive mood have a more positive affective tone than do
groups with leaders in a negative mood.
3. Group processes like coordination, effort expenditure, and task strategy.
Public expressions of mood impact how group members think and act.
When people experience and express mood, they send signals to others.
Leaders signal their goals, intentions, and attitudes through their
expressions of moods. For example, expressions of positive moods by
leaders signal that leaders deem progress toward goals to be good.The
group members respond to those signals cognitively and behaviorally in
ways that are reflected in the group processes.

In research about client service, it was found that expressions of positive mood
by the leader improve the performance of the group, although in other sectors
there were other findings.

Beyond the leader’s mood, her/his behavior is a source for employee positive
and negative emotions at work. The leader creates situations and events that
lead to emotional response. Certain leader behaviors displayed during
interactions with their employees are the sources of these affective events.
Leaders shape workplace affective events. Examples – feedback giving,
allocating tasks, resource distribution. Since employee behavior and productivity
are directly affected by their emotional states, it is imperative to consider
employee emotional responses to organizational leaders. Emotional intelligence,
the ability to understand and manage moods and emotions in the self and others,
contributes to effective leadership in organizations. Leadership is about being
responsible.

* Neo-emergent theory

The Neo-emergent leadership theory (from the Oxford school of leadership)

espouses that leadership is created through the emergence of information by the
leader or other stakeholders, not through the true actions of the leader himself. In
other words, the reproduction of information or stories form the basis of the
perception of leadership by the majority. It is well known that the great naval hero
Lord Nelson often wrote his own versions of battles he was involved in, so that
when he arrived home in England he would receive a true hero's welcome. In
modern society, the press, blogs and other sources report their own views of a
leader which may be based on reality, but may also be based on a political
command, a payment or an inherent interest of the author, media or leader.

22
Therefore, it can be contended that the perception of all leaders is created and in
fact does not reflect their true leadership qualities at all.

* Environmental leadership theory

The Environmental leadership model (Carmazzi) describes leadership from a

Group dynamics perspective incorporating group psychology and self awareness
to nurture “Environments” that promote self sustaining group leadership based on
personal emotional gratification from the activities of the group. The
Environmental Leader creates the psychological structure by which employees
can find and attain this gratification through work or activity.

It stems from the idea that each individual has various environments that bring
out different facets from their own Identity, and each facet is driven by
emotionally charged perceptions within each environment… The Environmental
Leader creates a platform through education and awareness where individuals fill
each others emotional needs and become more conscious of when, and how
they affect personal and team emotional gratifications. This is accomplished by
knowing why people “react” to their environment instead of act intelligently.

“Environmental Leadership is not about changing the mindset of the group or

individual, but in the cultivation of an environment that brings out the best and
inspires the individuals in that group. It is not the ability to influence others to do
something they are not committed to, but rather to nurture a culture that
motivates and even excites individuals to do what is required for the benefit of
all. It is not carrying others to the end result, but setting the surrounding for
developing qualities in them to so they may carry each other.” Carmazzi

The role of an Environmental Leader is to instill passion and direction to a group

and the dynamics of that group. This leader implements a psychological support
system within a group that fills the emotional and developmental needs of the
group.

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Leadership styles
Leadership style refers to a leader’s behaviour. It is the result of the philosophy,
personality and experience of the leader.

Kurt Lewin's Leadership styles

Kurt Lewin and colleagues identified different styles of leadership

• Dictator
• Autocratic
• Participative
• Laissez-Faire

Autocratic or Authoritarian Leaders

Under the autocratic leadership style, all decision-making powers are centralized
in the leader, as with dictator leaders.

They do not entertain any suggestions or initiatives from subordinates. The

autocratic management has been successful as it provides strong motivation to
the manager. It permits quick decision-making, as only one person decides for
the whole group and keeps each decision to themself until they feel it is needed
by the rest of the group.

Participative or Democratic Leaders

The democratic leadership style favors decision-making by the group as shown,

such as leader gives instruction after consulting the group.

They can win the cooperation of their group and can motivate them effectively
and positively. The decisions of the democratic leader are not unilateral as with
the autocrat because they arise from consultation with the group members and
participation by them.

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Laissez-Faire or Free Rein Leaders

The phrase is French and literally means "let do", but, in a leadership context,
can be roughly translated as "free rein".

A free rein leader does not lead, but leaves the group entirely to itself as shown;
such a leader allows maximum freedom to subordinates, i.e., they are given a
free hand in deciding their own policies and methods.

Different situations call for different leadership styles. In an emergency when

there is little time to converge on an agreement and where a designated authority
has significantly more experience or expertise than the rest of the team, an
autocratic leadership style may be most effective; however, in a highly motivated
and aligned team with a homogeneous level of expertise, a more democratic or
laissez-faire style may be more effective. The style adopted should be that which
most effectively achieves the objectives of the group while balancing the interests
of its individual members.

Leadership performance
In the past, some researchers have argued that the actual influence of leaders on
organizational outcomes is overrated and romanticized as a result of biased
attributions about leaders (Meindl & Ehrlich, 1987). Despite these assertions
however, it is largely recognized and accepted by practitioners and researchers
that leadership is important, and research supports the notion that leaders do
contribute to key organizational outcomes (Day & Lord, 1988; Kaiser, Hogan, &
Craig, 2008). To facilitate successful performance it is important to understand
and accurately measure leadership performance.

Job performance generally refers to behavior that is expected to contribute to

organizational success (Campbell, 1990). Campbell identified a number of
specific types of performance dimensions; leadership was one of the dimensions
that he identified. There is no consistent, overall definition of leadership
performance (Yukl, 2006). Many distinct conceptualizations are often lumped
together under the umbrella of leadership performance, including outcomes such
as leader effectiveness, leader advancement, and leader emergence (Kaiser et
al., 2008). For instance, leadership performance may be used to refer to the
career success of the individual leader, performance of the group or organization,
or even leader emergence. Each of these measures can be considered
conceptually distinct. While these aspects may be related, they are different
outcomes and their inclusion should depend on the applied/research focus.

Contexts of leadership

Leadership in organizations

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An organization that is established as an instrument or means for achieving
defined objectives has been referred to as a formal organization. Its design
specifies how goals are subdivided and reflected in subdivisions of the
organization. Divisions, departments, sections, positions, jobs, and tasks make
up this work structure. Thus, the formal organization is expected to behave
impersonally in regard to relationships with clients or with its members. According
to Weber's definition, entry and subsequent advancement is by merit or seniority.
Each employee receives a salary and enjoys a degree of tenure that safeguards
her/him from the arbitrary influence of superiors or of powerful clients. The higher
his position in the hierarchy, the greater his presumed expertise in adjudicating
problems that may arise in the course of the work carried out at lower levels of
the organization. It is this bureaucratic structure that forms the basis for the
appointment of heads or chiefs of administrative subdivisions in the organization
and endows them with the authority attached to their position.

In contrast to the appointed head or chief of an administrative unit, a leader

emerges within the context of the informal organization that underlies the
formal structure. The informal organization expresses the personal objectives
and goals of the individual membership. Their objectives and goals may or may
not coincide with those of the formal organization. The informal organization
represents an extension of the social structures that generally characterize
human life — the spontaneous emergence of groups and organizations as ends
in themselves.

In prehistoric times, humanity was preoccupied with personal security,

maintenance, protection, and survival. Now humanity spends a major portion of
waking hours working for organizations. Her/His need to identify with a
community that provides security, protection, maintenance, and a feeling of
belonging continues unchanged from prehistoric times. This need is met by the
informal organization and its emergent, or unofficial, leaders.

Leaders emerge from within the structure of the informal organization. Their
personal qualities, the demands of the situation, or a combination of these and
other factors attract followers who accept their leadership within one or several
overlay structures. Instead of the authority of position held by an appointed head
or chief, the emergent leader wields influence or power. Influence is the ability of
a person to gain co-operation from others by means of persuasion or control over
rewards. Power is a stronger form of influence because it reflects a person's
ability to enforce action through the control of a means of punishment.

A leader is a person who influences a group of people towards a specific result. It

is not dependent on title or formal authority. (elevos, paraphrased from Leaders,
Bennis, and Leadership Presence, Halpern & Lubar). Leaders are recognized by
their capacity for caring for others, clear communication, and a commitment to
persist. An individual who is appointed to a managerial position has the right to
command and enforce obedience by virtue of the authority of his position.

26
However, she or he must possess adequate personal attributes to match his
authority, because authority is only potentially available to him. In the absence of
sufficient personal competence, a manager may be confronted by an emergent
leader who can challenge her/his role in the organization and reduce it to that of
a figurehead. However, only authority of position has the backing of formal
sanctions. It follows that whoever wields personal influence and power can
legitimize this only by gaining a formal position in the hierarchy, with
commensurate authority. Leadership can be defined as one's ability to get others
to willingly follow. Every organization needs leaders at every level.

Leadership versus management

Over the years the philosophical terminology of "management" and "leadership"

have, in the organisational context, been used both as synonyms and with clearly
differentiated meanings. Debate is fairly common about whether the use of these
terms should be restricted, and generally reflects an awareness of the distinction
made by Burns (1978) between "transactional" leadership (characterised by eg
emphasis on procedures, contingent reward, management by exception) and
"transformational" leadership (characterised by eg charisma, personal
relationships, creativity).

Leadership by a group

In contrast to individual leadership, some organizations have adopted group

leadership. In this situation, more than one person provides direction to the group
as a whole. Some organizations have taken this approach in hopes of increasing
creativity, reducing costs, or downsizing. Others may see the traditional
leadership of a boss as costing too much in team performance. In some
situations, the maintenance of the boss becomes too expensive - either by
draining the resources of the group as a whole, or by impeding the creativity
within the team, even unintentionally.

A common example of group leadership involves cross-functional teams. A team

of people with diverse skills and from all parts of an organization assembles to
lead a project. A team structure can involve sharing power equally on all issues,
but more commonly uses rotating leadership. The team member(s) best able to
handle any given phase of the project become(s) the temporary leader(s).
Additionally, as each team member has the opportunity to experience the
elevated level of empowerment, it energizes staff and feeds the cycle of success.

Leaders who demonstrate persistence, tenacity, determination and synergistic

communication skills will bring out the same qualities in their groups. Good
leaders use their own inner mentors to energize their team and organizations and
lead a team to achieve success.

According to the National School Boards Association (USA)

27
These Group Leadership or Leadership Teams have specific characteristics:

Characteristics of a Team

• There must be an awareness of unity on the part of all its members.

• There must be interpersonal relationship. Members must have a chance to
contribute, learn from and work with others.
• The member must have the ability to act together toward a common goal.

Ten characteristics of well-functioning teams:

• Purpose: Members proudly share a sense of why the team exists and are
invested in accomplishing its mission and goals.
• Priorities: Members know what needs to be done next, by whom, and by
when to achieve team goals.
• Roles: Members know their roles in getting tasks done and when to allow
a more skillful member to do a certain task.
• Decisions: Authority and decision-making lines are clearly understood.
• Conflict: Conflict is dealt with openly and is considered important to
decision-making and personal growth.
• Personal traits: members feel their unique personalities are appreciated
and well utilized.
• Norms: Group norms for working together are set and seen as standards
for every one in the groups.
• Effectiveness: Members find team meetings efficient and productive and
look forward to this time together.
• Success: Members know clearly when the team has met with success and
share in this equally and proudly.
• Training: Opportunities for feedback and updating skills are provided and
taken advantage of by team members.

Leadership among primates

Richard Wrangham and Dale Peterson, in Demonic Males: Apes and the Origins
of Human Violence present evidence that only humans and chimpanzees, among
all the animals living on earth, share a similar tendency for a cluster of behaviors:
violence, territoriality, and competition for uniting behind the one chief male of the
land. This position is contentious. Many animals beyond apes are territorial,
compete, exhibit violence, and have a social structure controlled by a dominant
male (lions, wolves, etc.), suggesting Wrangham and Peterson's evidence is not
empirical. However, we must examine other species as well, including elephants
(which are matriarchal and follow an alpha female), meerkats (who are likewise
matriarchal), and many others.

It would be beneficial, to examine that most accounts of leadership over the past
few millennia (since the creation of Christian religions) are through the

28
perspective of a patriarchal society, founded on Christian literature. If one looks
before these times, it is noticed that Pagan and Earth-based tribes in fact had
female leaders. It is important also to note that the peculiarities of one tribe
cannot necessarily be ascribed to another, as even our modern-day customs
differ. The current day patrilineal custom is only a recent invention in human
history and our original method of familial practices were matrilineal (Dr.
Christopher Shelley and Bianca Rus, UBC). The fundamental assumption that
has been built into 90% of the world's countries is that patriarchy is the 'natural'
biological predisposition of homo sapiens. Unfortunately, this belief has led to the
widespread oppression of women in all of those countries, but in varying
degrees. (Whole Earth Review, Winter, 1995 by Thomas Laird, Michael Victor).
The Iroquoian First Nations tribes are an example of a matrilineal tribe, along
with Mayan tribes, and also the society of Meghalaya, India. (Laird and Victor, ).

By comparison, bonobos, the second-closest species-relatives of man, do not

unite behind the chief male of the land. The bonobos show deference to an alpha
or top-ranking female that, with the support of her coalition of other females, can
prove as strong as the strongest male in the land. Thus, if leadership amounts to
getting the greatest number of followers, then among the bonobos, a female
almost always exerts the strongest and most effective leadership. However, not
all scientists agree on the allegedly "peaceful" nature of the bonobo or its
reputation as a "hippie chimp"

Historical views on leadership

Sanskrit literature identifies ten types of leaders. Defining characteristics of the

ten types of leaders are explained with examples from history and mythology.

Aristocratic thinkers have postulated that leadership depends on one's blue blood
or genes: monarchy takes an extreme view of the same idea, and may prop up
its assertions against the claims of mere aristocrats by invoking divine sanction:
see the divine right of kings. Contrariwise, more democratically-inclined theorists
have pointed to examples of meritocratic leaders, such as the Napoleonic
marshals profiting from careers open to talent.

In the autocratic/paternalistic strain of thought, traditionalists recall the role of

leadership of the Roman pater familias. Feminist thinking, on the other hand,
may object to such models as patriarchal and posit against them emotionally-
attuned, responsive, and consensual empathetic guidance, which is sometimes
associated with matriarchies.

Comparable to the Roman tradition, the views of Confucianism on "right living"

relate very much to the ideal of the (male) scholar-leader and his benevolent rule,
buttressed by a tradition of filial piety.

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Leadership is a matter of intelligence, trustworthiness, humaneness, courage, and
discipline . . . Reliance on intelligence alone results in rebelliousness. Exercise of
humaneness alone results in weakness. Fixation on trust results in folly. Dependence on
the strength of courage results in violence. Excessive discipline and sternness in
command result in cruelty. When one has all five virtues together, each appropriate to its
function, then one can be a leader. — Sun Tzu

In the 19th century, the elaboration of anarchist thought called the whole concept
of leadership into question. (Note that the Oxford English Dictionary traces the
word "leadership" in English only as far back as the 19th century.) One response
to this denial of élitism came with Leninism, which demanded an élite group of
disciplined cadres to act as the vanguard of a socialist revolution, bringing into
existence the dictatorship of the proletariat.

Other historical views of leadership have addressed the seeming contrasts

between secular and religious leadership. The doctrines of Caesaro-papism have
recurred and had their detractors over several centuries. Christian thinking on
leadership has often emphasized stewardship of divinely-provided resources -
human and material - and their deployment in accordance with a Divine plan.
Compare servant leadership.

For a more general take on leadership in politics, compare the concept of the
statesman.

Action Oriented Team Leadership Skills

This is a unique approach to team leadership that is aimed at action oriented
environments where effective functional leadership is required to achieve critical
or reactive tasks by small teams deployed into the field. In other words
leadership of small groups often created to respond to a situation or critical
incident.

In most cases these teams are tasked to operate in remote and changeable
environments with limited support or backup (action environments). Leadership
of people in these environments requires a different set of skills to that of front
line management. These leaders must effectively operate remotely and negotiate
both the needs of the individual, team and task within a changeable environment.
This has been termed Action Oriented Leadership. Some example action
oriented leadership is demonstrated in the following ways: extinguishing a rural
fire, locating a missing person, leading a team on an outdoor expedition or
rescuing a person from a potentially hazardous environment.

Titles emphasizing authority

At certain stages in their development, the hierarchies of social ranks implied
different degrees or ranks of leadership in society. Thus a knight led fewer men

30
in general than did a duke; a baronet might in theory control less land than an
earl. See peerage for a systematization of this hierarchy, and order of
precedence for links to various systems.

In the course of the 18th and 20th centuries, several political operators took non-
traditional paths to become dominant in their societies. They or their systems
often expressed a belief in strong individual leadership, but existing titles and
labels ("King", "Emperor", "President" and so on) often seemed inappropriate,
insufficient or downright inaccurate in some circumstances. The formal or
informal titles or descriptions they or their flunkies employ express and foster a
general veneration for leadership of the inspired and autocratic variety. The
definite article when used as part of the title (in languages that use definite
articles) emphasizes the existence of a sole "true" leader.

Critical Thought on the concept of leadership

Noam Chomsky and others have brought critical thinking to the very concept of
leadership and have provided an analysis which asserts that people abrogate
their responsibility to think and will actions for themselves. While the conventional
view of leadership is rather satisfying to people who "want to be told what to do",
these critics say that one should question why they are being subjected to a will
or intellect other than their own if the leader is not a Subject Matter Expert (SME).

The fundamentally anti-democratic nature of the leadership principle is

challenged by the introduction of concepts such as autogestion, employeeship,
common civic virtue, etc., which stress individual responsibility and/or group
authority in the work place and elsewhere by focusing on the skills and attitudes
that a person needs in general rather than separating out leadership as the basis
of a special class of individuals.

Similarly various historical calamities are attributed to a misplaced reliance on the

principle of leadership

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5. Seven Must-Have Skills Every Entrepreneur, Needs
Entrepreneurial Skills
What skills are needed to be an entrepreneur? There are many skills that
entrepreneurs develop over time, but there are a few skills that every
entrepreneur must have before opening their “doors” for business. Read through
this list and if you find any skills that you need to work on, develop them while
you are building your business plan. Successful entrepreneurs have to start with
these seven must-have skills.

#1 Self-Motivation

The most important skill any entrepreneur needs is the ability to wake up in the
morning and begin working. If you have been 10 minutes late to work everyday
for the past five years, most likely that habit will not change if you own your own
business. Not only do you need to be able to wake-up, but you also need to be
able to begin and end work on time. Many first time entrepreneurs find
themselves wasting away their day talking on the phone, filing and developing
binders for clients that do not exist. Schedule your day and stick to your
schedule.

#2 Self-Confidence

Every entrepreneur needs to be confident in themselves, their product and their

business. You need to know that your product can truly help people and that you
are charging prices that are both fair to you and your clients.

#3 Ethics & Morals

Ethics and morals are the foundation of every good entrepreneur. Early on you
must decide what you and your business will stand for and what lines you will
refuse to cross. Many entrepreneurs close their doors because the dollar
outshines their morals. If you stray too far from your morals you will give yourself
and your business a bad name. No one wants to do business with someone who
will not stand up for their own morals.

#4 Time Management

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 As mentioned under Self-Motivation – Schedule your day
and stick to your schedule. This cannot be emphasized
enough. New entrepreneurs need to realize that every
minute is valuable. When first starting out, most likely you
will not have enough “work” to fill an eight hour day. This
does not mean that you have time to take a 3 hour lunch
with friends. Utilize this time to learn more skills related to
your business, find ways to advertise and contact potential clients.

#6 Sales

No matter how much you don’t like the idea of it, every business has to work with
sales. Each industry and business has a unique way of handling their sales. As
an entrepreneur, it is your job to figure out what type of sales you prefer and what
type is best for your services or products. If you have ever worked in retail sales
or advertising you already have an edge on most other hopeful business people.
All entrepreneurs will benefit from sales seminars, books and motivational
programs.

#7 Finance

When in business, knowledge of finance is a must. Knowing how to balance a

checkbook and keep track of numbered invoices is all most small businesses
need to start out. The most important aspect of small business finance is
scheduling time specifically for your finance management and doing it. Granted it
helps to have an accounting degree or extensive QuickBooks knowledge but
these skills are not mandatory.

Possessing or nurturing these skills before going into business will help ensure a
successful outcome. So long as you have an excellent salable idea and these
seven entrepreneurial skills, nothing can stop you from doing your best.

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6. Discover What Makes an Entrepreneur
Successful
Most people have no idea what makes an entrepreneur successful though this
rarely stops them from expressing their opinion. A new entrepreneur greatly
enhances the chances of success by exploiting key qualities unique to
entrepreneurs, learning the right entrepreneur skills and getting good help.

It's that "good help" part that's difficult. I know "good help is hard to find," but if
you're an entrepreneur facing many of the common challenges you'll learn more
about here, you've come to the right place. An experienced and successful
entrepreneur myself, I've worked to help many other entrepreneurs succeed as
well.

This section of my Web site is not only for the new entrepreneur, but also for any
entrepreneur looking to increase the chances of success in business and in life.
You'll want to keep coming back to see what exciting new things I've got to teach
you and valuable resources I'll share with you in the coming days, weeks and
months. With all you've got on your plate, it would be a good idea for you to
subscribe to the FAS Forward ezine if you haven't already. That way you won't
miss any tidbit that could maximize your success.

The Entrepreneur's Mind

It takes a unique insight into the entrepreneur's mind to be able to understand

why you do things the way you do, and to show you ways you can improve your
business and your life while still letting you do things your own way.

That sounds contradictory, but you know that the mind of an entrepreneur is a
scary place! ;-) With years of experience working with entrepreneurs, these
contradictions don't scare me, and I'm ready to teach you many ways to make
use of your intricate and often brilliant mind in ways that will dramatically improve

34
your results.

Entrepreneur Skills and Qualities

Entrepreneur skills are essential for success, of course, but you can learn the key
skills of an entrepreneur. However, just as musicians and artists have natural
talents that permit them increased chances of success in creative endeavors,
certain qualities of an entrepreneur provide a natural advantage.

What makes an entrepreneur successful? Tap into those entrepreneur qualities,

personality traits and characteristics and you're off to a running start. You have to
do your part, of course, by completing your entrepreneur education. But that's
where I can help, through the Entrepreneur section of this site and the coaching
and training I offer entrepreneurs.

Entrepreneur Challenges

Entrepreneurs face very special challenges. We'll be exploring those in this

section as well. But of course, you're already very familiar with the challenges.
You're dealing with them daily. I know you'd rather know what makes an
entrepreneur successful, but whether you're a new entrepreneur or a seasoned
veteran, what I like to call a "serial entrepreneur," stick with me and I'll help you
become the successful entrepreneur you've always dreamed you could be and
reach levels of success you've only dreamed of.

It's true that entrepreneurs face many challenges, but what makes an entrepreneur
successful isn't a lack of challenges, it's what you do in the face of them. Learn what you
can do to overcome these top 10 entrepreneur challenges.

Want to learn more about what makes an entrepreneur successful in other areas of his
or her life? You'll enjoy exploring some of the other sections of my Web site as well.
You'll find much to make your

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7. Profiling An Entrepreneur? Use a Mirror
You aren't interested in profiling an entrepreneur, at least not as a theoretical
exercise. You're profiling an entrepreneur because you want to know if you have
what it takes. You're looking for the characteristics of an entrepreneur because
you're looking in the mirror and you're wondering if you fit the profile of an
entrepreneur.

Can you be an entrepreneur? Many people think the question has a "yes or no"
answer. That entrepreneur characteristics are innate like an artist's talent, and
success comes from brilliant "flashes of genius" that lead to new products and
markets.

What Is An Entrepreneur?

Innovation is essential to successful entrepreneurship, but it doesn't come from

flashes of genius. Leonardo Da Vinci was definitely a genius, and "invented" the
submarine, the helicopter and many other machines we use today.

But if we were profiling an entrepreneur, Da Vinci wouldn't fit the mold. None of
his "flashes of genius" could become successful business in the 1500's. The
technology just didn't exist. As an innovator, he was extraordinary. As an
entrepreneur, he was a bust.

Successful entrepreneurship is a discipline, not a talent. You can develop your

entrepreneur skills. You don't need to have been born with them. Peter Drucker,
the first "management guru," called this the "cult of the entrepreneur."

Entrepreneur Characteristics

36
He explains that it's not talent that's needed. When Peter Drucker is profiling an
entrepreneur he says, "What is needed is willingness to learn, willingness to work
hard and persistently, willingness to exercise self-discipline, willingness to adapt
and to apply the right policies and practices."

If you fall for the cult of the entrepreneur, your business is almost as likely to fail
as if you don't start it because you think you don't have what it takes, that magic
"something" you think true entrepreneurs must have.You remember Thomas
Edison as the inventor of the light bulb. But he didn't want to be an inventor, he
wanted to be a successful entrepreneur and the owner of a large company. He
started many businesses and six of them actually grew rapidly but then
floundered. These businesses we're only saved by kicking Thomas Edison out
and replacing him with a professional management team.

Edison fell for the cult of the entrepreneur. He thought that as an entrepreneur,
he had to do everything. Of course, in any successful business, there is no single
person who can make, or break, the enterprise.

Entrepreneur Test

Was Edison successful? You'd think so, but he felt like a failure. He never
systemized his businesses. His "brilliant" plan was to control everything himself;
a plan that worked right up until the business failed or the shareholders threw him
out! Since he did this repeatedly, we can guess he didn't learn from his mistakes
very well either.In profiling an entrepreneur, there may not be a definitive answer.
If there were an entrepreneur test, would Edison or Da Vinci have passed?
Would you? There are entrepreneur personality traits that may make it easier for
someone to start their own business. There are also certain characteristics of an
entrepreneur that make you more likely to become an entrepreneur (though they
rarely determine success), such as having parents who were self-employed.

But the real entrepreneur test that determines if you have the profile of an
entrepreneur comes daily as you work to build your own business. And the real
secret to success comes from your own decision and your own desire. Will you
need help? Of course. Will it be easy? Of course not. But that's never stopped
you before, has it?

So when you're profiling an entrepreneur, can you look in the mirror? Yes, you

37
can. Peter Drucker, and more recently Jim Collins (Good to Great) , Michael
Gerber (The E-Myth), Tom Peters (In Search of Excellence) and the list goes on,
say you can be an entrepreneur if you choose to. Each of these respected and
admired management gurus says you can if you are willing to do two things; you
must work on yourself, and you must work on your business.

8. Entrepreneur Skills and Qualities

Entrepreneur skills are essential for success, of course, but you can learn the key
skills of an entrepreneur. However, just as musicians and artists have natural
talents that permit them increased chances of success in creative endeavors,
certain qualities of an entrepreneur provide a natural advantage.

What makes an entrepreneur successful? Tap into those entrepreneur qualities,

personality traits and characteristics and you're off to a running start. You have to
do your part, of course, by completing your entrepreneur education. But that's
where I can help, through the Entrepreneur section of this site and the coaching
and training I offer entrepreneurs.

Entrepreneur Skills You Must Master

You cannot succeed without key entrepreneur skills. Entrepreneur characteristics
or entrepreneur personality traits make starting a business easier, but as we saw
in, "Profiling An Entrepreneur? Use a Mirror", it's your willingness to work hard,
learn constantly and never give up that make the difference.

What should you be learning? What skills are key to your business' success?
Unfortunately, the most important skills for an entrepreneur are those that the
most common entrepreneur personality traits make difficult to master.

Entrepreneur Skills for Delegation

As an entrepreneur, you strive for excellence. However, few entrepreneurs have

the wisdom of excellence versus perfectionism, that is, the ability to judge when
striving for excellence (a good thing) becomes perfectionism (a roadblock to
success). You've heard (and may even believe) that, "If you want something
done right, you have to do it yourself."

Entrepreneurs must control their own destiny. This need for control drives them
more than money. However, this desire for complete control also wreaks havoc
with their delegation skills.

38
Until you master the necessary skills for effective delegation, you are not a true
entrepreneur. Delegating skills are essential to achieve leverage. For you to
accomplish more than you are physically and mentally capable of alone, you
must multiply your own efforts by the number of people you can lead.

Entrepreneur Skills for Time Management

Another example of this phenomenon is time management skill. Entrepreneurs

focus with amazing intensity. They "hyper-focus," shutting out all distractions to
concentrate on only one goal. They ignore fatigue, hunger, naysayer's and the
difficulty of the task to surmount seemingly impossible obstacles.

However, this ability to hyper-focus that contributes to the success of a start-up

also makes time management extremely difficult. Missing meetings with your
banker is frowned on, even if you're side-tracked by a particularly challenging
problem or exciting opportunity. And as your business grows, meeting the
inevitable increasing demands by working longer and longer hours is a recipe for
disaster.

Entrepreneur Skills for Organizing

Entrepreneurs see the big picture. They make connections others miss because
their brain works differently than most. Able to make connections between
previously unrelated facts, they see opportunities created by converging trends in
the market, or niches left underserved by slow-to-move companies and their
rapidly evolving customer base.

Making connections is a strength. On the other hand, their skills for keeping an
office in order amount to little more than organizing paperwork by pile. Their
ability to spot opportunities that could revolutionize an entire industry makes it
extremely difficult for them to be excited by error proof paperwork.
Entrepreneur Skills for Management Success
The skills of an entrepreneur make him or her ideally suited to spot opportunities
others miss, focus on the opportunity to the exclusion of all else and devote
every ounce of energy to growing a business.

Your skills, however, must include delegating skills, time management skill and
organizational skills. Without these and other management skills, you are
doomed to failure, becoming another entrepreneur ousted from the company you
founded in favor of professional managers.

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9. Entrepreneur Challenges

Entrepreneurs face very special challenges. We'll be exploring those in

this section as well. But of course, you're already very familiar with the
challenges. You're dealing with them daily. I know you'd rather know what makes
an entrepreneur successful, but whether you're a new entrepreneur or a
seasoned veteran, what I like to call a "serial entrepreneur," stick with me and I'll
help you become the successful entrepreneur you've always dreamed you could
be and reach levels of success you've only dreamed of.

Overcome the Top 10 Entrepreneur Challenges

When starting or running your own business, you'll face these entrepreneur
challenges. Real entrepreneurs don't let that stop them. Now they won't even
slow you down!

Entrepreneurs face challenges from many sources... external threats may come
from competitors, from the bank that turns you down for financing or the
government agency that refuses your license application. Internal challenges are
far more deadly to your success.

The difference for entrepreneurs with ADHD, however, is that a slightly different
approach may be necessary to overcome the same challenges other
entrepreneurs face. In this article, we'll look at the top 10 entrepreneur

40
challenges briefly, and then I'll share two essential strategies you must apply if
you hope to overcome any entrepreneur challenge

Top 10 Entrepreneur Challenges

These 10 challenges come up with my clients again and again. They aren't in
order of importance, but ask any entrepreneur to list his or her most vexing
challenges and I'll bet you'll find them on this list.

• Paperwork: You hate doing it. You hate organizing it. You'd love to throw
it out, but you can't decide what you can get rid of and what to keep.
• Delegation: You can't trust anyone to do it as well as you. You haven't
practiced your delegation skills, it's no surprise when it doesn't go well,
justifying your reluctance.
• Perfectionism: Your standards are so high no one can live up to them.
Not even you. But perfectionism is motivated by fear. You can't be judged
if you never finish.
• Forgetfulness: Poor working memory makes you forget what you're
supposed to do. You can remember facts, but appointments?
Commitments? Forget it.
• Impulsive Behavior: A person of action, you'd rather move than take time
to think. But shooting first and asking questions later just leaves a lot of
hole you have to fix.
• Projects: The trouble with projects, planning them, managing them and
finishing them starts early. The business plan stops many would-be
entrepreneurs before they start.
• Procrastination: With so many exciting things to do, boring but necessary
tasks are the bane of every entrepreneur. Why do today what you can put
off until tomorrow? Here's a secret strategy that can stop procrastination in
it's tracks.

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 • Getting Organized: You're often inconsistent. Organized in some areas
and disorganized in others, you can't seem to transfer the same skills from
one area to another.
• Lack of Focus: You have so many brilliant ideas, each one "shinier" than
the next, that your biggest challenge it to pick one and see it through from
brainstorm to business.
• Time Management: You are chronically late, overcommitted and still
overpromising. You underestimate how long things will take and often
scramble to catch up late into the night.

Overcoming Entrepreneur Challenges

Faced with any entrepreneur challenge, your first instinct is probably to

overreact. If you can't find a paper on your desk, your response is, "I have to
reorganize my office!" Of course, because you don't have time to reorganize your
office, nothing changes.

Overcoming any of these entrepreneur challenges is going to require change. As

an entrepreneur, changes you make will affect other people too.

Overcoming Procrastination

Let Them See It Coming

Big, dramatic changes always meet with resistance. All people resist change.
Even you. If you want your life and your business to improve, you must overcome
that resistance. Just saying that things might get better is not enough. You know
life would be better if you organized your office. (Anything yet?)

If someone came in and organized your office for you, you'd complain you
couldn't find things anymore. When you make changes, you'll resist. When you
make changes that affect other people, they'll resist.

42
And you'll be surprised what can upset people. If you decide to improve your
work-life balance by leaving the office at a more reasonable hour, you might be
surprised at the reaction at home when you show up early for supper. If you
disrupt people's routines, at work or at home, you'll meet with resistance.

This is not to say you should continue to work late into the night. Just remember,
you must be prepared for that resistance in order to succeed, but you can lessen
that resistance if you warn people. Think through the changes you're planning.
Who will it effect?

Explain to your spouse that you've been spending too much time at work and
you're going to come home a bit earlier so you can spend more time with the
family. Ask how you can best fit it into the family's routine and give them a
chance to adapt to the new situation.

Take Baby Steps

When you overreact to a challenge, take a moment. Ask yourself, "What is the
smallest change I could make that would actually improve the situation?"
Organize your desk? Can you go smaller? Could you clean off the top of your
desk?

Next, ask yourself, "What daily routine would reinforce that change?" Could you
use an inbox and make it a habit to empty it every morning with your first coffee?
Choose an action that you can turn into a ritual.

Solving any entrepreneur challenges takes work. Otherwise, they wouldn't be

challenges. But if you make the necessary changes one small step at a time,
building a series of routines and rituals that maintain the changes you've made,
you'll succeed in the long run, and looking back, it will have seemed almost
effortless.

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10.Characteristic of Successful Entrepreneurs
 · Self-confident and optimistic

 · Able to take calculated risk

 · Respond positively to challenges

 · Flexible and able to adapt

 · Knowledgeable of markets

 · Able to get along well with others

 · Independent minded

 · Versatile knowledge

 · Energetic and diligent

 · Creative, need to achieve

 · Dynamic leader

 · Responsive to suggestions

 · Take initiatives

 · Resourceful and persevering

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  · Perceptive with foresight

 · Responsive to criticism

11. ENTREPRENEURSHIP

CONCEPT AND DEFINITION

Definition:
· The entrepreneur seeks, in Schumpeter’s word, to reform or revolutionized the
pattern of production by exploiting an invention or, more generally, an untried
technological
possibility for producing a new commodity or producing an old one in a new way,
by opening up a new source of supply of materials or a new outlet for products . .
. . Entrepreneurship, as defined, essentially consists in doing things that are not
generally
done in the ordinary course of business routine.· The evolution of the concept
has generated many definitions, but perhaps a recent one by writer Robert
Ronstand captures its essence. we shall use Ronstad’s definition of
entrepreneurship:
Entrepreneurship is the dynamic process of creating incremental wealth. This
wealth created by individuals who assume the major risks in terms of equity,
time, and/or career commitment of providing value for some product or service.
The product or service itself may or may not be new or unique but value must
somehow be infused by the entrepreneur by securing and allocating the
necessary skills and resources.

• A theory of evolution of economic activities.

• A continuous process of economic development.
• An ingredient to economic development.
• Essentially a creative activity or an innovative function.
• A risk taking factor which is responsible for an end result.
• Usually understood with reference to individual business.

45
• The name given to the factor of production, which performs the functions of
enterprise.
• Creates awareness among people about economic activity.
• Generates Self-employment and additional employment

WHY ENTREPRENEURSHIP

• To improve backwardness of the people.

• Economic development of the region.
• To analysis resource utilization.
• 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.

The early history of entrepreneurship in India reflect from the culture, customs
and tradition of the India people. The Baliyatra Festival of Cuttack, Orissa
reminiscence of past glory of International trade. To process of entrepreneurship
therefore passed through the potential roots of the society and all those who
accepted entrepreneurial role had the cultural heritage of trade and business.
Occupational pursuits opted by the individual under the caste system received
different meaning of value attached to entrepreneurship. Which is based on
social sanctions. Vaishyas are considered to venture in to business pursuits. As
society grew and the process of business occupation depended and the value
work tended towards change and the various occupational role interchanged with
non-role group and sub-groups. People from different castes and status also
entered into the entrepreneurial role.
The emergence of entrepreneurship in this part of the country got localized and
spread effect, took its own time. The concept of growth theory seems to be
closely related in explaining the theory of entrepreneurship development as well.
After the Second World War entrepreneurship received new meaning for
attaining economic development within the shortest possible time. But in the
process they were seriously handicapped by the rigid institutional setup, political
instability, marketing imperfection and traditional value system.
Britishers for their own ulterior motive destabilized the then self sufficient Indian
economy. England flourished and India had to pay for that. In the process India
suffered heavy industrial loss.
Development of business eateries is a complex phenomenon influenced by both
the internal and external factors. Internal factor originates in policies and attitude
of the entrepreneur themselves.
In controlling the business itself. External factors are beyond the control of the
business entrepreneur. They alone account for unpredictability of returns and
risks assumed by the entrepreneur. A steady growth can be observed on the
business of long cherished history of entrepreneurial development in the country

46
is certainly promised or the environment to be created by the state and its
agencies.
The entrepreneurial motivation is one of the most important factors which
accelerates the pace of economic development by bringing the people to
undertake risk bearing activities. In many of the developing countries a lot of
attention is being paid to the development of entrepreneurship because it is not
the proprietary quality of any caste and community.
The entrepreneurship is usually understood with reference to individual business.
Entrepreneurship has rightly been identified with the individual, as success of
enterprise depends upon imagination, vision, innovativeness and risk taking. The
production is possible due to the cooperation of the various factors of production,
popularly known as land, labour, capital, market, management and of course
entrepreneurship. The entrepreneurship is a risk-taking factor, which is
responsible for the end result in the form of profit or loss.
According to A Schumpeter “The entrepreneurship is essentially a creative
activity or it is an innovative function”.
The economic activity with a profit motive can only be generated by promoting an
attitude towards entrepreneurship. The renewed interest in the development of
entrepreneurship to take up new venture should emphasize on the integrated
approach. The developments of entrepreneurship will optimize the use of the
unexploited resources, generate self-employment and a self sufficient economy.
The young entrepreneur should be motivated to come out with determination to
do something of their own and also to contribute to the national income and
wealth in the economy. If the country wants to achieve the growth at the grass
root level, through social justice and the crimination of poverty, it will have to
provide institutional support and structural changes in organization of financial
institutions to promote entrepreneurship development. Industrial development in
any region is the outcome of purposeful human activity and entrepreneurial
thrust.
David Melelland emphasized the importance of achievement motivation as the
basis of entrepreneurial personality and a cause of economic and social
development through entrepreneurship by fulfilling the following needs such as 1)
Need for power 2) Need for affiliation and 3) Need for achievement.
Another school of thought says “entrepreneurship is a function of several factors
i.e. individual socio cultural environment and support system”.
Entrepreneurship is vibrant assertion of the facts that individual can be
developed, then outlook can be changed and their ideas can be converted into
action though on organized and systematic program for entrepreneurs. It was
also felt that systematic training can be given a better output and attracting
people for taking up business venture can change economic scenario.
Basic objective in developing entrepreneurship and multiplying them in the
society has been to enable the society to generate productive human resource,
mobilize and sustain the same in subsequent process of development. The
spontaneity and continuity of the process would depend on the kind of people
that can be prompted and groomed in the entrepreneurial career.

47
Socilogists, Psychologists and economists have all attempted to give a clear
picture of the entrepreneur. Sociologists analyze the characteristic of
entrepreneurs in terms of caste, family, social value and migration.
Psychologists on the other hand attempt to isolate entrepreneurs from general
population on various personality trials such as need for achievement, creativity,
propensity to take risk, independence leadership etc.
Economists, lighted situational characteristics such as occupational backgrounds
access to capital business and technological experience and managerial skills
with economic gains considered as characteristic of entrepreneur.
As entrepreneur by implication is one who ventures out, who prefers change as a
means of growth and it the process is prepared to take a calculated risk while
taking risks he is aware of the possibilities, success as well as the consequence
of failure.

AN ENTREPRENEURIAL CAREER
Entrepreneurship plays an important role in the economic growth and
development of nation. It is a purposeful activity includes in initiation, promotion
and distribution of wealth and service. An entrepreneur is a critical factor in
economic development and an integral part of the socio-economic
transformation. It is a risk taking activity and challenging tasks, needs utmost
devotion, total commitment and greater sincerity with fullest involvement for his
personal growth and personality. The entrepreneurial career is not a one day job
nor it is bed of roses. Prosperity and success never come easily. It takes time
and needs hard work. Systematic planning and business acumen to be
successful entrepreneur.
Therefore, before choosing this path one should be very careful in knowing about
his own self. This introspection process helps him in knowing about himself.
Every person has his own potentiality and resource. How he looks in to this
aspect. If the person cans understand or identify his inner traits then it help him
choosing the right path for which he should look into his beliefs, faith values etc.
For an entrepreneur it is of great importance to know about himself on the basis
of above mentioned individual consideration. These consideration give him
ample scope to face his own self by asking the question “Who I am?” If he can
given meaning answer to this complex question with exemplary courage and
utter personal disregard to being exposed, then it helps him in getting a fair idea
about himself. On the whole it helps him to making the right decision in choosing
the right path for getting involved for deciding the future course of action. This is
nothing but a self-identification process. After having being proper identified his
strength, weakness and ability, he can make a decision of his choice, whether he
will take up entrepreneurship as a career or not. If yes, then in which
entrepreneurial area.

48
Choosing entrepreneurial career is like choosing a life partner. The person has to
be there in the job forever and may have to continue in that chosen line for
generations to generation and grows in this process if it is matching; if it
mismatches it goes the other way round.
Considering this aspect he should always be governed by three basic qualitative
instincts to serve in the world of uncertainty. These are – (1) Will, (2) Zeal, and
(3) Skill.

WHO IS AN ENTREPRENUER
• He is a person who develops and owns his own enterprise
• He is a moderate risk taker and works under uncertainty for achieving the goal.
• He is innovative
• He peruses the deviant pursuits
• Reflects strong urge to be independent.
• Persistently tries to do something better.
• Dissatisfied with routine activities.
• Prepared to withstand the hard life.
• Determined but patient
• Exhibits sense of leadership
• Also exhibits sense of competitiveness
• Takes personals responsibility
• Oriented towards the future.
• Tends to persist in the face to adversity
• Convert a situation into opportunity.

The characteristics of an unique entrepreneur are :

- Need for achievement

- High need for power
- Independence
- Propensity to take risk
- Personal modernity
- Support
- Business enterprise
- Leadership

Entrepreneurship is not the proprietary quality of any caste or community. Many

may possess the qualities, but are baffled with too many questions why, what
and how to get about starting new venture.

Are you prepared to accept it ?

WHY ?
1. Are you prepared to put in hard work for achieving your goal ?

49
2. Are you possess a strong will power to face and overcome the difficulties and
setbacks and make the enterprise successful ?
3. It your family environment congenial to leaving the traditional family occupation
and undertaking a new venture ?
4. Are you prepared to wait if it take time to set the results of your efforts ?

WHAT – Information Needed

- Prospects and scope of a particular industry or business
- Technical details
- Quantum of investment etc.
- Information about different field about the particular trade
- Purpose of being the business
- Responsibilities towards customers, employees, society etc.
- For marketing of your product be aware of strength and weakness of your
product.
- Factors offering market demand
- Cost and model of distribution etc.
- Manufacturing process
- Plant and machinery
- Availability of new materials
- Production costs’
- Manpower
- Fund requirement of working capital
- Assessment of profitability and repayment of term loan.

HOW - Implementation Plan

- Final selection of product
- Prepare project report
- Registration :
- Apply to Financial Institutions
- Provisional Registration
- Obtain Licenses
- Apply for shed, Land and Power etc.
- Arrange your capital
- Plant Layout
- Construct shed
- Obtain utilities
- Order for NOC
- Order for raw materials supply etc.
- Recruitment and training of manpower
- Arrangements of sales network
- Trail run/sales promotion technique
- Introduction of product
- Commercials production return.

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12 .Entrepreneurship vs. Small Business

Many people use the terms "entrepreneur" and "small business

owner"synonymously. While they may have much in common, there are
significant differences between the entrepreneurial venture and the small
business. Entrepreneurial ventures differ from small businesses in these ways:

1. Amount of wealth creation - rather than simply generating an income stream

that replaces traditional employment, a successful entrepreneurial venture
creates substantial wealth, typically in excess of several million dollars of profit.

2. Speed of wealth creation - while a successful small business can generate

several million dollars of profit over a lifetime, entrepreneurial wealth creation
often is rapid; for example, within 5 years.

3. Risk - the risk of an entrepreneurial venture must be high; otherwise, with the
incentive of sure profits many entrepreneurs would be pursuing the idea and the
opportunity no longer would exist.

4. Innovation - entrepreneurship often involves substantial innovation

beyond what a small business might exhibit. This innovation gives the
venture the competitive advantage that results in wealth creation. The
innovation may be in the product or service itself, or in the business
processes used to deliver it.

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Characteristic of Successful Entrepreneurship
 S elf-confident and optimistic Responsive to criticism
Able to take calculated risk Respond positively to challenges
Flexible and able to adapt Knowledgeable of markets
Able to get along well with others Independent minded
Versatile knowledge  Energetic and diligent
 C reative, need to achieve Dynamic leader
Responsive to suggestions Take initiatives
Resourceful and persevering Perceptive with foresight

The 4 C’s- confidence, competence, communication, and

conceptualization:
Successful entrepreneurs are strong-minded, self-assured individuals who take
pride in their company and inventions. They have proficiency in their field of
industry and possess strong communication skills (verbal and writing),
especially when it comes to selling their product or service. They also freely
exchange their ideas and opinions with investors, management team, board
members, etc. Furthermore, they have an impeccable skill for envisioning
unique novel ideas, can identify complex situations, and offer quick solutions to
existing problems.
The 3 P’s- passion, persistence, and pragmatism: Successful business
owners
often demonstrate a profound passion and a robust enthusiasm for their
profession, qualities that are highly regarded by many angel investors. In
addition, they are quite persistent individuals, especially when it comes to
bringing forth viable ideas and concepts. They are also pragmatic persons who
have a realistic approach in life, especially when it comes to their company.
The 2 F’s- focused and flexible: Another striking attribute that successful
entrepreneurs share is their focused mindset. They are aware of their company’s
mission and they meticulously address what needs to be done in order to
succeed. They also have the capability to adapt to different modifications
throughout their company’s cycle, especially when it comes to strategy, and are
able to properly readjust in order to meet those changes.

Entrepreneurship and Innovation

Creative as a prerequisite to innovation

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· The terms creativity and innovation are often used to mean the thing, but
each has a unique connotation.

1. Creativity - is “the ability to bring something new into existence. This definition
emphasizes the “ability”, not the “activity”, of bringing something new into
existence.

2. Innovation - is the process of doing new thing. Innovation, therefore, is the

transformation of creative ideas into useful applications, but creativity is a
prerequisite to innovation.
· It is important to recognize that innovation implies action, not just conceiving
new ideas. When people have passed through the illumination and verification
stages of creativity, they may have become inventors, but they are not yet
innovators.

· The difference between invention and innovation is:

1. Invention - is the creation of new products, processes, and technologies not

previously known to exist.

2. Innovation - is the transformation of creative ideas into useful applications by

combining resources in new or unusual ways to provide value to society for or
improved products, technology, or services.

· Elements in the Innovation Process:

1. Analytical Planning - to identify: product design, market strategy, financial

need.

2. Organizing Resources - to obtain: materials, technology, human resources,

capital.

3. Implementation - to accomplish: organization, product design, manufacturing,

services.

4. Commercial Application - to provide: value to customers, reward of employees,

revenues for investors, satisfaction for founders

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13. How Is Entrepreneurship Good for Economic
Growth?
How is entrepreneurship good for economic growth? This question would seem
to have a simple answer: Entrepreneurs create new businesses, and new
businesses in turn create jobs, intensify competition, and may even increase
productivity through technological change. High measured levels of
entrepreneurship will thus translate directly into high levels of economic
growth. However, the reality is more complicated.

It is important to distinguish between “necessity entrepreneurship” and

“opportunity entrepreneurship.”Necessity entrepreneurship is having to become
an entrepreneur because you have no better option, whereas opportunity
entrepreneurship is an active choice to start a new enterprise based on the
perception that an unexploited or underexploited business opportunity exists.
Necessity entrepreneurship has no effect on economic development while
opportunity entrepreneurship has a positive and significant effect.

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14. Entrepreneurship in India:

India is second among all nations in Total Entrepreneurship Activity as per the
Global Entrepreneurship Monitor Report 2002.
India is the fifth largest economy in the world (ranking above France, Italy, the
United Kingdom, and Russia) and has the third largest GDP in the entire
continent of Asia. It is also the second largest among emerging nations. The
liberalization of the economy in the 1990s has paved the way for a huge number
of people to become entrepreneurs.
Over the years India and China have followed opposing strategies for
development. While China’s growth has been fuelled by the heavy dose of
foreign direct investment, India has followed a much more organic method and
has concentrated more on the development of the institutions that support private
enterprise by building a stronger infrastructure to support it.
Its corporate and legal systems operate with greater efficiency and transparency
than do China’s. The Government has encouraged entrepreneurship by providing
training and also the facilities to succeed, particularly in the rural areas. One style
of innovation that really works in a country as large and diverse as India, is
grassroots innovation: this includes inventions for a milieu that is quintessentially
Indian.
Moreover, in India, the post-liberalization and globalization era has brought with it
a growing middle class - roughly estimated to be 250 million - and rising
disposable incomes. This presents a huge potential, which if tapped can be a

55
veritable gold mine. Entrepreneurs can make the best of this by catering to
various demands of this segment. India, with its abundant supply of talent in IT,
management, and R&D, has become the hot bed of outsourcing of services from
all parts of the globe where companies can reduce their costs, but not their
quality [If the foreign company chooses the right Indian partner].
In terms of improvement, there needs to be an increase in the quality and
quantity of VC / Angel Investors in India. Also, the Governments need to still
continue reducing the administrative burden on entrepreneurs, and coordinate
among their agencies to ensure that the necessary resources are directed where
they are needed. The physical infrastructure needs to be improved. Socially, the
Indian society is adapting to a more risk friendly environment and also looking for
jobs in the private sector.

15. Entrepreneurship: No Experience Necessary

6 tips for starting a business with little industry experience or business

know-how
Timothy Ericson can quickly sum up what he and his business partner knew
about the bike-sharing industry before launching a business in the field two years
ago.
"We started from nothing," says Ericson, CEO and co-founder of CityRyde, a
bike-sharing consulting firm. "We basically spent our first two years becoming
experts in an industry that was totally new to us."

Today, the business is expanding with services such as software that tracks
everything from usage to cyclists' carbon offsets.

Ericson, who had experience in business and information technology before

founding CityRyde, is one of many entrepreneurs to start a business either with
no "domain" experience--experience in the industry in which they're looking to
start a business--or with strong domain experience but little entrepreneurial
know-how.

Experts say entrepreneurs in both scenarios can find success by heeding the tips
below.

1. Commit yourself to a market solution, not a pet idea.

56
Derek Pedersen says the impetus to create Goal Tracker, which sells record-
keeping software for special-education needs, came when his business partner's
mom, a speech pathologist, asked her son to create software that would help do
her job. Pedersen says focusing on a specific problem, not a pet solution, helped
the company find success.
Mark Loschiavo, executive director of Drexel University's Baiada Center for
Entrepreneurship, says this can be a stumbling block for entrepreneurs with
strong domain experience but no business experience.
"Domain experts often fall so much in love with a product they've created, they
become blind to criticism or correction, and they're not flexible in terms of
modifying their product in order to meet the needs of the marketplace," Loschiavo
says. "They need a passionate belief that there's a problem out there that needs
to be solved, and need to be flexible about the solution to it."

2. Choose your industry wisely.

Loschiavo says entrepreneurs should consider entry barriers beyond just startup
costs.
For example, those with little business experience may want to steer clear of
industries with regulatory hurdles, requirements to hire a sales force or other
staff, or a need to navigate vendor relationships. He says Web 2.0 companies
may be well-suited for those with scant business experience: viral marketing
using social networks like Twitter eliminates the need for direct-marketing
prowess,
and the online format eliminates the need for a large staff or a brick-and-mortar
location.

3. Build street cred.

According to Loschiavo, even though he was a pro at software and technology
solutions when he left IBM to start a business offering tech solutions for
contractors who install audiovisual systems, "I didn't have any street credibility,"
"I wasn't embedded in the industry, and I really needed to be," he says. "If no one
in the industry knew who I was, the fact that I'd been with IBM and had co-
founded another tech business in a different industry didn't carry a lot of weight."
So he started by launching a retail business in the field, learning the industry's
nuances and developing relationships with vendors, contractors and retailers
before launching his big idea. Similarly, Ericson spent two years meeting with
and learning from bike-sharing companies around the world to determine the
best industry practices, gather information for industry reports and otherwise
prepare to open a bike-sharing consulting firm.
"Before we started CityRyde, there was very little general knowledge available
about the industry," Ericson says. "So we went out and obtained that knowledge
directly from the vendors to find out what they needed to be successful in this
growing industry."

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4. Rely on free resources.
Pedersen says he spent "hundreds" of hours reading all the available literature
on his industry and hundreds more networking with other entrepreneurs.
"There were so many free networking tools in the Greenville, S.C. area, we were
able to meet people who had been in the industry for many years and get great
advice from them at no cost to us," Pedersen says. Ericson says a similar
networking group in Philadelphia has provided CityRyde invaluable feedback.
"These are people, who are not afraid to pick your idea apart, “he says, " which is
exactly what you need."
Loschiavo says universities can also be an affordable resource for new
entrepreneurs, offering free or low-cost coursework, books or seminars.

5. Know when to seek outside help.

When Evan Solida founded Cerevellum in early 2009 to sell the digital rearview
bicycle mirrors he'd designed, he tried to save money by using internet resources
to create business plans and draft legal documents.
Solida says he ended up paying for professionals to help with both tasks, making
the little money he spent online "a complete waste." Cerevellum recently
received its first round of grant funding and investment dollars.
"I know this isn't what entrepreneurs starting on a shoestring budget want to
hear, but a lot of stuff I was doing in the beginning trying to save money cost me
both money and time in the end," Solida says.

6. Put your strengths to work.

Loschiavo says entrepreneurs' most important tool when branching out to an
unfamiliar industry is knowledge of their strengths and how to apply them.
For example, he says, Vernon Hill started Commerce Bank based on the
business principles he learned in quick-service retail. "He didn't understand why
banks were only open during business hours, so he made sure his banks were
open earlier and later, when people are available," Loschiavo says. "He
understood retail and customer behavior, and translated that to the banking
world. Most business skills transcend multiple industries."
Ericson says he and his business partner kept their strengths in mind when they
expanded CityRyde to include two software programs for bike-sharing
companies.
"In the early days, to be honest, it didn't seem like our experience translated
much at all,"
Ericson says. "But by really entrenching ourselves in the industry, we found a
gap that seemed to call for exactly our skills and experience to fill."

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16. Skills Associated With Entrepreneurship

1. Technical Skills

2. Management Skills

3. Entrepreneurial Skills

1. Technical Skills

• Specific Operation Technology

• Communication

• Interpersonal relations

• Organizational ability
• Coordinating Team members

• Environmental Observation

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2. Management Skills

• Planning

• Formulating Goals

• Decision-making

• Motivating

• Marketing

• Accounting

• Negotiation

3. Entrepreneurial Skills

• Inner Discipline

• Risk-seeking

• Innovation

• Change-orientation

• Persistency

• Visionary

17. Entrepreneurial Personality

1. Psychological Characteristics

• Highly confident

• Risk Taker

• Motivated reasoning

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 • Thirsting for the right answer

• Thinking logically

• Being practical

2. Sociological Characteristics

•Inconsistency in Planning

• Blend with the environment

• Cognitive dissonance - Ability to comprehend chaos

• Lateral thinking - Thinking may not be supported

rationally

18. Male Vs. Female Entrepreneurs

• The characteristics of male and female entrepreneurs seem to be very
similar
• The backgrounds of male and female entrepreneurs also have been found
to be similar
• However, certain subtle differences in motivation, types of ventures started
etc., have been identified.

Men & Women Entrepreneurs – Motivation

• Achievement –Strive to make things happen

• Personal independence- self-image as it relates to status through their

role in the corporation is unimportant
• Job satisfaction arising from the desire to be in control

• Achievement-accomplishment Independence of a goal Independence –

to do it alone

Men & Women Entrepreneurs- Reasons For Entering Into

Entrepreneurship

• Dissatisfaction with present job

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 • Sideline in college, sideline to present job, or outgrowth of
present job

• Discharge or layoff Opportunity for acquisition

*• Job frustration

• Interest in and recognition of opportunity in the area

• Change in personal circumstances

Men & Women Entrepreneurs-Sources Of Funds

• Personal asset and savings

• Bank financing

• Investors Loans from friends and family

*• Personal assets and savings

• Personal loans

Men & Women Entrepreneurs – Occupational Background

• Experience in line of work

• Recognized specialist or one who has gained a high level of

achievement in the field

• Competent in a variety business functions

*• Experience in area of business

• Middle-management or administrative-level experience in the field
• Service-related occupational background

Men & Women Entrepreneurs – Personality

• Optionalated and persuasive

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 • Goal oriented

• Innovative and idealistic

• High Level of self-confidence

• Enthusiastic and energetic

• Must be own boss

• Flexible and tolerant

*• Goal oriented

• Creative and realistic

• Medium level of self-confidence Enthusiastic and energetic

• Ability to deal with the social and economic environment
Men vs Women Entrepreneurs - Background

• Age when starting venture 25-35

•Father was self-employed

•College-education-degree i

• Technical area

• First born child

*• Age when starting venture-:35-45

• Father was self-employed

• College educated-degree in liber

• First-born child

Men & Women Entrepreneurs – Support Groups

• Close friends

• Friends, professional acquaintances (lawyers, accountants)

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 • Business associates

Spouse

* • Spouse

• Family Women's professional

groups

• Trade associations

Men & Women Entrepreneurs – Types Of Business ventures

Started

• Manufacturing or Constructor

**• Service – related - Educational

services,

• Consulting or public relation

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19. Conclusion (Defining and Measuring Entrepreneurship)
Foundations and Trends in Entrepreneurship

"Entrepreneurship" is frequently advocated in the public debate as the solution to

all (or at least most of) our trouble. However, often we do not know precisely
what is meant with it, nor is it clear, what the different empirical measures of
entrepreneurship are capturing. In this paper, we have tried to compare the
theoretical ideas with what people are actually measuring.
First, we found that the different theoretical definitions of entrepreneurship reflect
a diverse set of ideas about the role of entrepreneurship in the economy,
involving aspects such as innovation, uncertainty-bearing, opportunity-seeking,
and management. While the different perceptions of entrepreneurship may all be
important for the economy--we should expect them to have rather different
consequences. Thus, while both the uncertainty-bearer and the innovator are
needed for the functioning of the economy, they perform different roles. This also
implies that the appropriate set of policy instruments depend on which aspect of
entrepreneurship that should be promoted.
Second, these different aspects are to varying degrees reflected in the various
empirical measures. While some of these are good indicators of what we have
termed "Knightian entrepreneurship," others may better capture (some) aspects
of Schumpeterian or Kirznerian entrepreneurship. In general, stock measures
seem better suited at measuring Knight's ideas, while flow measures to a large
extent capture those of Schumpeter and Kirzner.

65
This distinction needs only be of academic interest if all empirical measures show
the same picture. Thus, if the measures reflecting Knightian entrepreneurship are
highly correlated with Schumpeterian indicators, measuring one or the other
would not matter much. And it could be conjectured that policies promoting one
would also promote the other.
However, we found considerable differences when comparing the levels of
entrepreneurship across countries using the different measures. Thus, the
different empirical measures not only reflect different theoretical aspects, they
also provide very different pictures of the entrepreneurial activity level across
countries. Hence, we cannot in general identify countries which are less
entrepreneurial. Instead, some countries are entrepreneurial in a Knightian sense
while less so in a Schumpeterian sense.
Many policies aimed at increasing entrepreneurial activities, rely on measures of
entrepreneurial activity to document weak spots--or less entrepreneurial areas.
Given that the empirical measures reflect rather different aspects of
entrepreneurship--policy-makers should always be aware of the appropriateness
of the empirical measure used as a measure of their perception of
entrepreneurship in the given situation. The growth prospects and ability to
create new jobs from Schumpeterian entrepreneurship is most likely to differ from
that of Knightian entrepreneurship.
Furthermore, the substantial differences across measures highlight the problems
involved in constructing composite indicators based on two or more of the
specialized measures. Such composite indicators are likely to be very sensitive
to the weights attached to the included indicators.
More research is definitely needed in this area to provide both better measures of
the different aspects of entrepreneurship and to further clarify the relationships
between the different measures and our understanding of entrepreneurship.

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BIBLIOGRAPHY

Reference Books
Entrepreneur Ship And Skills

Search Engines
• www.google.com

• www.angencyfaqs.com

• www.scribd.com

• www.wikipidia.com

Web
www.entrepreneurship.com

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