WHY STUDY ENTREPRENEURSHIP?

/ IMPORTANCE OF ENTREPRENEURSHIP Entrepreneurship can be known as the method of gaining, pulling simultaneously all the resources, and installing them in the quest of apparent chances in the coming future for lengthy gains. Entrepreneurship is increasingly recognized as an important driver of economic growth, productivity, innovation and employment, and it is widely accepted as a key aspect of economic dynamism: the birth and death of firms and their growth and downsizing. As firms enter and exit the market, theory suggests that the new arrivals will be more efficient than those they displace. Existing firms that are not driven out are forced to innovate and become more productive in order to compete. Many studies have given empirical support to this process of creative destruction first described by Joseph Schumpeter. However, while academic studies have long recognized the importance of entrepreneurship, policy makers have only recently explicitly discovered it. Indeed, entrepreneurship was long considered an exogenous factor in government policies, and policy efforts were often directed simply towards the large population of very small firms rather than aimed at stimulating entrepreneurs able to introduce new products, processes or organizational forms in order to exploit new markets and grow. However, many OECD countries have made entrepreneurship an explicit policy priority in recent years, and governments policies now seek to affect the rate and type of entrepreneurship. As globalization reshapes the international economic landscape and technological change creates greater uncertainty in the world economy, the dynamism of entrepreneurship is believed to be able to help to meet the new economic, social and environmental challenges. Governments increasingly consider entrepreneurship and innovation to be the cornerstones of a competitive national economy, and in most countries entrepreneurship policies are in fact closely connected to innovation policies, with which they share many characteristics and challenges. Both are associated with doing something new and, designed correctly, they can be mutually reinforcing. The dynamic process of new firm creation introduces and disperses innovative products, processes and organizational structures throughout the economy. Entrepreneurship objectives and policies nevertheless differ considerably among countries, owing to different policy needs and diverse perspectives on what is meant by entrepreneurship. In some countries, entrepreneurship is linked to regional development programmes and the creation of new firms is stimulated to boost employment and output in depressed regions. In others, entrepreneurship is a key element of strategies designed to facilitate the participation of certain target groups, such as women or minorities, in the economy. Some countries simply seek to increase firm creation as such, while others set out to support high-growth firms. While many countries are making serious efforts to support entrepreneurship, results appear to vary. Countries want to understand the determinants of and obstacles to entrepreneurship, and they need to analyze the effectiveness of different policy approaches. The lack of internationally comparable empirical evidence has however constrained our understanding of entrepreneurship and many questions remain unanswered. Ultimately, policy making must be guided, as far as possible, by evidence and facts. To tackle these issues, the OECD, in association with Eurostat and many others, has undertaken to build a new, and more robust, international knowledge base.

SOCIAL ENTREPRENEURSHIP Social entrepreneurship is the work of social entrepreneurs. A social entrepreneur recognizes a social problem and uses entrepreneurial principles to organize, create and manage a venture to achieve social change (a social venture). While a business entrepreneur typically measures performance in profit and return, a social entrepreneur focuses on creating social returns. Thus, the main aim of social entrepreneurship is to further social and environmental goals. Social entrepreneurs are most commonly associated with the voluntary and not-for-profit sectors, but this need not

preclude making a profit. Social entrepreneurship practiced with a world view or international context is called international social entrepreneurship. Social entrepreneurs are individuals with innovative solutions to societys most pressing social problems. They are ambitious and persistent, tackling major social issues and offering new ideas for wide-scale change. Rather than leaving societal needs to the government or business sectors, social entrepreneurs find what is not working and solve the problem by changing the system, spreading the solution, and persuading entire societies to take new leaps. Social entrepreneurs often seem to be possessed by their ideas, committing their lives to changing the direction of their field. They are both visionaries and ultimate realists, concerned with the practical implementation of their vision above all else. Each social entrepreneur presents ideas that are user-friendly, understandable, ethical, and engage widespread support in order to maximize the number of local people that will stand up, seize their idea, and implement with it. In other words, every leading social entrepreneur is a mass recruiter of local change makersa role model proving that citizens who channel their passion into action can do almost anything A few examples of social entrepreneurs and their systems-changing solutions include: Muhammad Yunus Grameen Bank which spearheaded microfinance globally Carlo Petrinis slow food movement which currently has 100,000 member in 132 countries committed to rescuing cultural traditions and the preserving biodiversity Wendy Kopps Teach for America which transforms educational opportunities for low income groups whilst recruiting top university students to work in Americas worst performing public schools.

WOMEN ENTREPRENEURSHIP AND GENDER BIAS Women entrepreneur is a person who accepts challenging role to meet her personal need and become economically independent. There are economical, social, religious, cultural and other factors existing in the society which responsible for the emergency of the entrepreneurs. Women entrepreneur refers equally to someone who has started a one women business to someone who is a principal in family business or partnership or to someone who is shareholder in a public company which she runs. The Government of India has defined a women entrepreneur is an enterprise owned and controlled by a women having a minimum financial interest of 51% of the capital and giving at least 51% of the employment generated in the enterprise to women . Problems of Women Entrepreneurs Women Entrepreneurs encounter two sets of problems i.e. general problems entrepreneurs and problems specific to women entrepreneurs. These are discussed follows. 1. Problem of Finance Finance is regarded as life blood for any enterprise to be in big or small. However women entrepreneurs suffer from shortage of finance on two counts. Firstly women do not generally have property on their names to use them as collateral for obtaining funds from external sources. So that access to the external sources funds is limited. Secondly the banks also consider women less credit-worthy and discourage women barrowers on belief that they can at any time leave their business. 2. Scarcity of Raw Materials Most of the women enterprises are plagued by the scarcity of raw materials and necessary inputs. Added to this are high prices of raw materials, on the one hand and getting raw material at the minimum of discount on the other. The

failure of many co-operatives in 1971 engaged in based making is example how the scarcity of raw material sounds the death knell of enterprises run by women. 3. Male dominated Society. The constitution of India speaks of equality between sexes. But in practice women are looked upon as abla i.e. Weak in all respects. In male dominated Indian society, women are not treated equal to men. This turn serves as a barrier to women entry into business. 4. Lack of Education In India around 60% of women are still illiterate. Illiteracy is the root cause of socio- economic problem. Due to the lack of education women are not aware of business, technology and market knowledge. Also lack of education causes low achievement motivation among women. 5. Market Oriented Risk A number of women have to face the challenges of market because of stiff competition. Many business women find it difficult to capture the market and compete with their product. They are not fully aware of the changing market conditions. 6. Motivational Factors. Successful businessmen can be self motivated through setting up a mind and taking up risk and accepting social responsibilities on shoulder. The other factors such as family support government policies financial assistance etc. are also important to set up business. 7. Lack of Confidence Women lack confidence in their strength and competence. The family members and the society are reluctant to stand beside their entrepreneurial growth. 8. Training Programs Training programs are essential to new rural and young entrepreneurs who wish to set up a small and medium scale unit. The programs enrich the skill and potential of women entrepreneur. 9. Present Position of Women Entrepreneurs Out of the total 940-48 million people in India in the 1990s of the female comprise of 465% of the total population. There are 126.48 million women work force (representing 28.9% of the female population) but as per the 1991 census only 185900 women accounting for only 4.5% of total self employed persons in the country were recorded. Majority of them are engaged in the unorganized in the unorganized sectors like agriculture, agro based industries, handicrafts, and handloom and cottage based industries. As per the 2001census report, there are of women workers of the total working population including formal as well as informal sector. In the era of L.P.G (Liberalization, Privatization, Globalization) the Indian women entrepreneurs are very fast entering the non traditional sectors. This indeed is in response to their greater awareness.

SUSTAINABLE BUSINESS/ TRIPLE BOTTOM LINE Sustainable business, or green business, is an enterprise that has no negative impact on the global or local environment, community, society, or economya business that strives to meet the triple bottom line. Often, sustainable businesses have progressive environmental and human rights policies. In general, business is described as green if it matches the following four criteria:

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It incorporates principles of sustainability into each of its business decisions.] It supplies environmentally friendly products or services that replaces demand for nongreen products and/or services. It is greener than traditional competition. It has made an enduring commitment to environmental principles in its business operations.

A sustainable business is any organization that participates in environmentally friendly or green activities to ensure that all processes, products, and manufacturing activities adequately address current environmental concerns while maintaining a profit. In other words, it is a business that meets the needs of the present world without compromising the ability of the future generations to meet their own needs. It is the process of assessing how to design products that will take advantage of the current environmental situation and how well a companys products perform with renewable resources. The Brundtland Report emphasized that sustainability is a three-legged stool of people, planet, and profit. Sustainable businesses with the supply chain try to balance all three through the triple-bottom-line conceptusing sustainable development and sustainable distribution to impact the environment, business growth, and the society. Sustainable development within a business can create value for customers, investors, and the environment. A sustainable business must meet customer needs while, at the same time, treating the environment well. One of the most common examples of sustainable business initiatives is the act of going paperless. On a higher level, sustainable business practices can include reviewing processes in order to eliminate or recycle waste, making all products recyclable, and eliminating the use of nonrenewable resources via alternatives energies. Sustainable businesses also look at inputs to determine what products are harmful to the environment and try to find green alternatives that can function at the same or a better level and, preferably, at a lower cost. Company leaders also take into account the life cycle costs for inputs of items purchased. Inputs costs must be considered in regards to regulations, energy use, storage, and disposal. A businesss green initiatives can include conserving materials through remanufacturing, converting harmful gases into clean energy, generating greener power, and improving fuel economy

TECHNOPRENEURSHIP Technopreneurship is not a product but a process of synthesis in engineering the future of a person, an organization, a nation and the world. In a digital, knowledge based society, strategic directions or decision-making processes will be demanding and complex. This requires tertiary level and professional development programs and training to produce strategic thinkers who will have the skills to succeed in a dynamically changing global environment. Traditional educational programs, however, lack the methodology to transform today's students into creative, innovative, visionary global leaders who understand the importance of technopreneurship. A technoprenuer is an entrepreneur who is technology savvy, creative, innovative, dynamic, dares to be different and take the unexplored path, and very passionate about their work. They take challenges and strive to lead their life with greater success. They don't fear to fail. They take failure as a learning experience, a stimulator to look things differently and stride for next challenge. Technoprenuers continuously go through an organic process of continual improvement and always try to redefine the dynamic digital economy. Components: Integration of Business Technology in a sector context IT Architecture, Design and Development Skills Project Management Skills Collaboration (or Team) Skills Communication Skills Companies and Technoprenuers: Microsoft (Bill Gates), Google (Sergey Brin and Larry Page), Apple (Steve Jobs)

STATE-OWNED ENTERPRISE - SOE It is a legal entity that is created by the government in order to partake in commercial activities on the government's behalf. A state-owned enterprise (SOE) can be either wholly or partially owned by a government and is typically earmarked to participate in commercial activities. Also known as government-owned corporations (GOC), state-owned entities should not be confused with companies with stocks that are owned in part by a government body, since these companies are truly public corporations which happen to have a government entity as one of their shareholders. A government-owned corporation, state-owned company is a legal entity created by a government to undertake commercial activities on behalf of an owner government. Their legal status varies from being a part of government into stock companies with a state as a regular stockholder. There is no standard definition of a government-owned corporation (GOC) or state-owned enterprise (SOE), although the two terms can be used interchangeably. The defining characteristics are that they have a distinct legal form and they are established to operate in commercial affairs. While they may also have public policy objectives, GOCs should be differentiated from other forms of government agencies or state entities established to pursue purely non-financial objectives. SOEs are common across the globe, including in the U.S where mortgage companies Freddie Mac and Fannie Mae are considered government-sponsored enterprises (GSEs). It is difficult to determine categorically what level of state ownership would qualify an entity to be considered as "state-owned", since governments can also own regular stock, without implying any special interference. As an example, the Chinese Investment Corporation agreed in 2007 to acquire a 9.9% interest in the global investment bank Morgan Stanley, but it is unlikely that this would qualify the latter as a government-owned corporation. Governmentowned or state-run enterprises are often the result of corporatization, a process in which government agencies and departments are re-organized as semi-autonomous corporate entities, sometimes with partial shares listed on stock exchanges. Government-owned corporations often operate in sectors where there is a natural monopoly, or where the government has strategic interest. However, government ownership of industry corporations is common. Nationalization also forcibly converts a private corporation into a government-owned corporation.

SIMILARITIES AND DIFFERENCES BETWEEN MANAGERS AND ENTERPRENURERS The terms Entrepreneur and Manager are considered one and the same. But the two terms have different meanings. The following are some of the similarities between a manager and an entrepreneur. 1)Entrepreneur and manager have common goal 2)Both have decision making authority 3)both have enough knowledge of their business 4)both have knowledge of business environment 5)both have business managing ability 6)both have forecasting ability The following are some of the differences between a manager and an entrepreneur. 1. The main reason for an entrepreneur to start a business enterprise is because he comprehends the venture for his individual satisfaction and has personal stake in it where as a manager provides his services in an enterprise established by someone.

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An entrepreneur and a manager differ in their standing, an entrepreneur is the owner of the organization and he bears all the risk and uncertainties involved in running an organization where as a manager is an employee and does not accept any risk.

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An entrepreneur and a manager differ in their objectives. Entrepreneurs objective is to innovate and create and he acts as a change agent where as a managers objective is to supervise and create routines. He implements the entrepreneurs plans and ideas.

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An entrepreneur is faced with more income uncertainties as his income is contingent on the performance of the firm where as a managers compensation is less dependent on the performance of the organization. An entrepreneur is not induced to involve in fraudulent behavior where as a manger does. A manager may cheat by not working hard because his income is not tied up to the performance of the organization. Entrepreneur is required to have certain qualifications and qualities like high accomplishment motive, innovative thinking, forethought, risk-bearing ability etc. Conversely its mandatory for a manager to be educated in the fields of management theories and practices.

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An entrepreneur deals with faults and failures as a part of learning experience where as a manager make every effort to avoid mistakes and he postpones failure. An entrepreneur could be a manager but a manager cannot be an entrepreneur. An entrepreneur is intensely dedicated to develop business through constant innovation. He may employ a manager in order to perform some of his functions such as setting objectives, policies, rules etc. A manager cannot replace an entrepreneur in spite of performing the allotted duties because a manager has to work as per the guidelines laid down by the entrepreneur.

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On the downside, typical manager brings professionalism into working of an organization. They bring fresh perspectives, ideas and approach to trouble shooting which can be invaluable.

INTRAPRENEURS Intrapreneurship is the act of behaving like an entrepreneur, except within a large organization rather than a market as a whole. Intraprenuers are usually highly self-motivated, proactive and action-oriented people who are comfortable with taking the initiative, even within the boundaries of an organization, in pursuit of an innovative product or service. Behavioral characteristics of intrapreneurship include initiative, an ability to "think outside the box", risk-taking and leadership - all traits that are also possessed by successful entrepreneurs. The major difference between entrepreneurs and intrapreneurs is that the fruits of success default to the organization rather than to the intrapreneur. On the other hand, the intrapreneur also has the comfort of knowing that failure will not have a personal cost - as it would for an entrepreneur - since the organization would absorb losses arising from failure. Hence, the intrapreneur focuses on innovation and creativity, and transforms an idea into a profitable venture, while operating within the organizational environment. Thus, intrapreneurs are Inside entrepreneurs who follow the goal of the organization. Intrapreneurship is an example of motivation through job design, either formally or informally. Employees, such as marketing executives or perhaps those engaged in a special project within a larger firm, are encouraged to behave as entrepreneurs, even though they have the resources, capabilities and security of the larger firm to draw upon. Capturing a little of the dynamic nature of entrepreneurial management (trying things until successful, learning from failures, attempting to conserve resources, etc.) adds to the potential of an otherwise static organization, without exposing those employees to the risks or accountability normally associated with entrepreneurial failure. An increasing number of U.S. companies now encourage intrapreneurship, especially in certain sectors such as technology and biotechnology.

Many companies are famous for setting up internal organizations whose purpose is to promote innovation within their ranks. One of the most well-known is the "Skunk Works" group at Lockheed Martin. Another example could be 3M, who encourage many projects within the company. They give certain freedom to employees to create their own projects, and they even give them funds to use for these projects. Besides 3M, Intel also has a tradition of implementing intrapreneurship. Google is also known to be intrapreneur friendly, allowing their employees to spend up to 20% of their time to pursue projects of their choice. Promotion of intrapreneurs Give users of internal services a choice of more than one internal vendor. Give employees the security of something akin to ownership rights in internal intraprises they create, as well as the larger corporation. Demand and engender truth and honesty, marketplace feedback and marketplace discipline, to support widespread decision-making. Give intrapreneurial teams responsibility for their own bottom line even if they are subsidized as a profit centre rather than a cost centre. Allow many options and diversity in personnel, in jobs, in innovation efforts, alliances, and exchanges. Provide extensive training and education, and safety nets, so employees can develop and take risks as their organisation develops. Create an internal bank account for every internal enterprise. Streamline systems for registering internal enterprises so that they have standing in the corporation. Establish a system for registering agreements and contracts between internal enterprises, so that people can give their word and trust the system. Establish a justice system for adjudicating disputes between internal enterprises and between employees and enterprises.

QUICK START ROUTE A QSR is a way of setting up a business so as to earn a comfortable income in a relatively shorter span of time without too many hassles. E.g. Franchising, Ancillarization, Outsourcing Franchising Franchising is a business model in which many different owners share a single brand name. A parent company allows entrepreneurs to use the company's strategies and trademarks; in exchange, the franchisee pays an initial fee and royalties based on revenues. The parent company also provides the franchisee with support, including advertising and training, as part of the franchising agreement. Franchising is a faster, cheaper form of expansion than adding company-owned stores, because it costs the parent company much less when new stores are owned and operated by a third party. On the flip side, potential for revenue growth is more limited because the parent company will only earn a percentage of the earnings from each new store. 70 different industries use the franchising business model, and according to the International Franchising Association the sector earns more than $1.5 trillion in revenues each year. E.g. Subway (sandwiches and salads), McDonald's Outsourcing Outsourcing is contracting with another company or person to do a particular function. Almost every organization outsources in some way. Typically, the function being outsourced is considered non-core to the business. The outside firms that are providing the outsourcing services are third-party providers, or as they are more commonly called, service providers.

Companies began employing the outsourcing model to carry out narrow functions, such as payroll, billing and data entry. Those processes could be done more efficiently and therefore more cost-effectively, by other companies with specialized tools and facilities and specially trained personnel. Currently, outsourcing takes many forms. Organizations still hire service providers to handle distinct business processes, such as benefits management. But some organizations outsource whole operations. The most common forms are information technology outsourcing (ITO) and business process outsourcing (BPO). Business process outsourcing encompasses call center outsourcing, human resources outsourcing (HRO), finance and accounting outsourcing, and claims processing outsourcing. These outsourcing deals involve multi-year contracts that can run into hundreds of millions of dollars. Frequently, the people performing the work internally for the client firm are transferred and become employees for the service provider. Dominant outsourcing service providers in the information technology outsourcing and business process outsourcing fields include IBM, EDS, CSC, HP, ACS, Accenture and Capgemini. Ancillarization

Business Creativity and Innovation: How to Build an Innovative Culture More and more, todays competitive climate requires organizations to institutionalize the process of innovation - to plant the seeds of creativity that could utterly transform a business. Creativity necessarily involves the destruction of old - and sometimes comfortable and perfectly good - ways of doing business. But for companies willing to take the risk - and for leaders committed to building innovative cultures - the first requirement is to understand the creative process, and the second is to commit to policies that support the creative process. The Four Stages of the Creative Process: In order to build an innovative culture, leaders first have to understand the four keys stages of the creative process, based on the work of Teresa Amabile, Ph. D. - a psychologist at the Harvard Business School: The four stages are: 1. Preparation: this is the stage where the creative person or team becomes immersed in the problem. Its an information gathering stage, and when the effort is a collective one, it involves the forming of roles, areas of special individual interest and the (sometimes loose!) coordination of tasks. The creative process can sometimes stall - or temporarily appear to stall - at this stage, especially when lots of possibilities yield no immediate, transformative insights. 2. Incubation: in this stage, the original problem may appear to be on the back burner, even forgotten or neglected, but the mind is still at work. Not the logical, linear mind - the part we use most when awake - but the part that dreams, synthesizes, and makes new, weird, original connections. For a team effort, this can mean that the group may not meet for a while, appearing to let the project fall by the wayside. But people will still be thinking, or have ideas occur to them in the shower, or write down thoughts on cocktail napkins, etc. Illumination: Without warning, ideas or innovations can come any time - the aha! or eureka! experience. More commonly, there is no immediate killer insight, but some new angle that may occur, or some sudden, burning, unexplainable need to return to work on the problem - often a sign of creative labor pains. When the creative project has been a team effort, sometimes the only thing needed is to get the original group members together again after a period of time, and then pow! - the spontaneous exchange among them can bring forth an idea that no one member could articulate alone. Execution: This is the stage that separates mere creativity from successful innovation. New ideas require action, stubborn determination, and ability to build change coalitions while marketing the idea to critical skeptics. Perhaps more than anything else, it takes courage and persistence. Since the execution stage is more about social skill than it is about the technical skill that produces the innovative idea, this is the stage where organizational management can be most actively helpful in promoting business creativity.

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10 Qualities of a Successful Entrepreneur Successful businesspeople have many traits in common with one another. They are confident and optimistic. They are disciplined self starters. They are open to any new ideas which cross their path. Here are ten traits of the successful entrepreneur. 1. Disciplined These individuals are focused on making their businesses work, and eliminate any hindrances or distractions to their goals. They have overarching strategies and outline the tactics to accomplish them. Successful entrepreneurs are disciplined enough to take steps every day toward the achievement of their objectives. 2. Confidence The entrepreneur does not ask questions about whether they can succeed or whether they are worthy of success. They are confident with the knowledge that they will make their businesses succeed. They exude that confidence in everything they do. 3. Open Minded Entrepreneurs realize that every event and situation is a business opportunity. Ideas are constantly being generated about workflows and efficiency, people skills and potential new businesses. They have the ability to look at everything around them and focus it toward their goals. 4. Self Starter

Entrepreneurs know that if something needs to be done, they should start it themselves. They set the parameters and make sure that projects follow that path. They are proactive, not waiting for someone to give them permission. 5. Competitive Many companies are formed because an entrepreneur knows that they can do a job better than another. They need to win at the sports they play and need to win at the businesses that they create. An entrepreneur will highlight their own companys track record of success. 6. Creativity One facet of creativity is being able to make connections between seemingly unrelated events or situations. Entrepreneurs often come up with solutions which are the synthesis of other items. They will repurpose products to market them to new industries. 7. Determination Entrepreneurs are not thwarted by their defeats. They look at defeat as an opportunity for success. They are determined to make all of their endeavors succeed, so will try and try again until it does. Successful entrepreneurs do not believe that something cannot be done. 8. Strong people skills The entrepreneur has strong communication skills to sell the product and motivate employees. Most successful entrepreneurs know how to motivate their employees so the business grows overall. They are very good at highlighting the benefits of any situation and coaching others to their success. 9. Strong work ethic The successful entrepreneur will often be the first person to arrive at the office and the last one to leave. They will come in on their days off to make sure that an outcome meets their expectations. Their mind is constantly on their work, whether they are in or out of the workplace. 10. Passion Passion is the most important trait of the successful entrepreneur. They genuinely love their work. They are willing to put in those extra hours to make the business succeed because there is a joy their business gives which goes beyond the money. The successful entrepreneur will always be reading and researching ways to make the business better. Successful entrepreneurs want to see what the view is like at the top of the business mountain. Once they see it, they want to go further. They know how to talk to their employees, and their businesses soar as a result.