MODULE-1

ENTREPRENEUR
Meaning Of Entrepreneur Entrepreneur is a person who creates an enterprise. The word Entrepreneur is derived from a French word enterpendre which means to undertake. The process of creation is called Entrepreneurship Definition: According to International Labor Organization Entrepreneurs are people who have the ability to see and evaluate business opportunities; together with the necessary resources to take advantage of them; and to intimate appropriate action to ensure success. Evolution of the Concept: Although there is only limited consensus about the defining characteristics of entrepreneurship, the concept is almost as old as the formal discipline of economics itself. The term "entrepreneur" was first introduced by the early 18th century French economist Richard Cantillon. In his writings, he formally defines the entrepreneur as the "agent who buys means of production at certain prices in order to combine them" into a new product (Schumpeter, 1951). Shortly thereafter, the French economist J.B. Say added to Cantillon's definition by including the idea that entrepreneurs had to be leaders. Say claims that an entrepreneur is one who brings other people together in order to build a single productive organism (Schumpeter, 1951). Over the next century, British economists such as Adam Smith, David Ricardo, and John Stuart Mill briefly touched on the concept of entrepreneurship, though they referred to it under the broad English term of "business management." The necessity of entrepreneurship for production was first formally recognized by Alfred Marshall in 1890. Marshall believed that entrepreneurs must have a thorough understanding about their industries, and they must be natural leaders Since the time of Marshall, the concept of entrepreneurship has continued to undergo theoretical evolution. Unfortunately, although many economists agree that entrepreneurship is necessary for economic growth, they continue to debate over the actual role that entrepreneurs play in generating economic growth. One school of thought on entrepreneurship suggests that the role of the entrepreneur is that of a risk-bearer in the face of uncertainty and imperfect information.

FUNCTIONS OF AN ENTREPRENUER: The functions of an entrepreneur can be broadly categorized into: Risk bearing Innovation
1. Risk bearing - Starting a new enterprise always involves risk and trying for

doing something new and different is also risky. The enterprise may earn profits or incur losses because of various factors like increasing competition, changes in customer preferences, shortage of raw materials and so on. An entrepreneur, therefore, needs to be a risk taker, not risk avoider. 2. Innovation: It is doing some thing new or something different is a necessary condition to be called as a person as an entrepreneur. The entrepreneurs are constantly on the look out do something different and unique to meet the changing requirements of the customers .They may or may not be inventors of new products or new methods of production ,but they posses the ability to foresee the possibility of making use of the inventions for their enterprise. An entrepreneur also performs all the functions necessary right from the genesis of an idea up to the establishment of an enterprise.viz: Idea generation and scanning of the best suitable area. Determination of the business objectives. Product analysis and market research. Determination of form of ownership. Completion of promotional formalities. Raising necessary funds. Procuring machine and material. Recruitment

Undertaking the business operations.

TYPES OF ENTREPRENEUR:
According to the type of business 1.business entrepreneur 2.Trading entrepreneur 3.Industrial entrepreneur a.Large b.Medium c.small and Tiny 4.Corporate entrepreneur 5.Agricultural entrepreneur a.Plantation b.Horiculture c.Dairy d.Forestry 6.Retail entrepreneur 7.service entrepreneur According to gender and age 1.Men entrepreneurs 2.Women entrepreneur a.Young entrepreneur b.Old entrepreneur c.Middle-aged entrepreneur According to the sale of operation 1.Small Scale entrepreneur 2.Large scale According to the Growth 1.Growth entrepreneur 2.Super-growth entrepreneur According to the stages of development 1.first generation entrepreneur 2.Modern entrepreneur 3.Classical entrepreneur Others or unclassified 1.Professional 2.Non-professional 3.Modern 4.Traditional 5.Skilled 6.Non-skilled 7.Imitating 8.Inherited 9.Forced 10.National 11.International 12.Bureaucratic 13.Intrapreneur 14.Immigrant According to Area 1.Urban entrepreneur 2.Rural entrepreneur According to the use of technology motivation 1.Technical entrepreneur 2.Non-technical entrepreneur 3.professional entrepreneur 4.High-tech entrepreneur 5.Low-tech entrepreneur According to the 1.Pure entrepreneur 2.Induced entrepreneur 3.Motivated entrepreneur 4.Spontaneous entrepreneur

Entrepreneurs according to the type of business Business Entrepreneur: are individuals who conceive an idea for a new product or service and then create a business to materialize their idea into reality. They tap both production and marketing resources in their search to develop a new business opportunity. Trading Entrepreneur: Is one who undertakes trading activities and is not concerned with the manufacturing work. Industrial Entrepreneur: Is essentially a manufacturer who identifies the potential needs of customers and tailors a product or service to meet the marketing needs. He is a product oriented man who starts in an industrial unit because of the possibility of making some new product. Corporate Entrepreneur: Is a person who demonstrates his innovative skill in organizing and managing corporate undertaking. A corporate undertaking is a form of business organization which is registered under some statute or act which gives it a separate legal entity. Agricultural Entrepreneur: Are those who undertake agricultural activities as raising and marketing of crops, fertilizers and other inputs of agriculture. Entrepreneurs in technology Technical Entrepreneur: Is essentially compared to a Craftsman. He develops improved quality of goods because of his craftsmanship. He concentrates more on production than marketing. Non-technical Entrepreneur: Are those who are not concerned with the technical aspects of the product in which they deal. They are concerned only with developing alternative marketing and distribution strategies to promote their business. Professional Entrepreneur: Is a person who is interested in establishing a business but does not have interest in managing or operating it once it is established. Entrepreneurs and Motivation Pure Entrepreneur; Is an individual who is motivated by rewards. psychological and economic

Induced Entrepreneur: Is one who is induced to take up an entrepreneurial task due to the policy measures of the government that provides assistance, incentives, concessions and necessary overhead facilities to start a venture. Motivated Entrepreneur: New entrepreneur are motivated by the desire for self-fulfilment. They come into being because of the possibility of making and marketing some new product for the use of consumers.

Spontaneous Entrepreneur: These entrepreneurs start their business their y natural talents. Such entrepreneurs have a strong conviction and confidence in their inborn ability. Growth and Entrepreneurs Growth Entrepreneurs: Are those who necessarily take up a high growth industry which has substantial growth prospects. Super-Growth Enterpreneur:Are those who have shown enormous growth of performance in their venture. The growth performance is identified by the liquidity of funds, profitability and gearing. Entrepreneur and Stages of development First-generation entrepreneur: Is one who starts an industrial unit by innovative skill. Modern Entrepreneur: Is one who undertakes those ventures which go well along with the changing demand in the market. Classical Entrepreneur: Is one who is concerned with the customers and marketing needs through the development of a self-supporting venture. INTRAPRENEUR AN EMERGING CLASS An organization desiring to establish an intrapreneurial environment must implement a procedure for its creation. Although this can be done internally, frequently it is easier to use someone outside to facilitate the process. The first step in this process is to secure a commitment to intrapreneurship in the organization by top, upper, and middle management levels. Second, ideas and general areas that top management are interested in supporting should be identified, along with the amount of risk money that is available to develop the concept further. Third, a company needs to use technology to make itself more flexible. Fourth, the organization should be a group of interested managers who will train employees as well as share their experiences. Fifth, the organization needs to develop ways to get closer to its customers. Sixth, an organization that wants to become more intrapreneurial must learn to be more productive with fewer resources. Seventh, the organization needs to establish a strong support structure for intrapreneurship. Eighth, support must also involve tying the rewards to the performance of the intrapreneurial unit.

Finally, the organization needs to implement an evaluation system that allows successful intrapreneurial units to expand and unsuccessful ones eliminated. ENTREPRENEURSHIP THE CONCEPT The concept of entrepreneurship is a complex phenomenon. Broadly, it relates to the entrepreneur, his vision and his implementation. The key player is the entrepreneur. Entrepreneurship refers to a process of action an entrepreneur (person) undertakes to establish his / her enterprise. It is a creative and innovative response to the environment. Entrepreneurship is thus a cycle of actions to further the interest of the entrepreneur. In this chapter, the concept of entrepreneurship and the related issues are analysed, discussed and deliberated. One of the qualities of entrepreneurship is the ability to discover an investment opportunity and to organize an enterprise, thereby contributing to real economic growth. It involves taking of risks and making the necessary investments under conditions of uncertainty and innovating, planning and taking decisions so as to increase production in agriculture, business, industry, etc., Entrepreneurship is a composite skill, the resultant of a mix of many qualities and traits. These include imagination, readiness to take risks, ability to bring together and put to use other factors of production, capital, labour, land as also intangible factors such as the ability to mobilize scientific and technological advances. EVOLUTION OF ENTREPRENEURS IN INDIA Over the last 60 years, India has seen the entrepreneur evolve in different roles. The modern entrepreneurs are ealth creators, communicators, entertainers etc. The third millennium rightly belongs to Indian entrepreneurs. With liberalization setting in, it was bound to be sooner, rather than later, that a new business class would emerge. Never could we have predicted that Azim Premji, who inherited a vegetable oil company, could beat traditional industrialists in becoming the richest Indian. And that a school teacher's son. Narayana Murthy, would own the most valued company in the country, Infosys. Such twists of fate, possible only in today's India, were a far cry two decades ago. The happenings of these changes are largely on account of the fact that there has been a shift in the way of conducing business over the last 60 years. Using Alvin Toffler's terminology. DEVELOPMENT OF ENTREPRENEURSHIP

Earliest Period An early example of the earliest definition of an entrepreneur as a go-between is Marco Polo, who attempted to establish trade routes to the Far East.

Middle Ages In the Middle Ages, the term entrepreneur was used to describe both an actor and a person who managed large production projects. 17th Century The reemergent connection of risk with entrepreneurship developed in the 17th century, with an entrepreneur being a person who entered into a contractural arrangement with the government to perform a service or to supply stipulated products. 18th Century In the 18th century, the person with capital was differentiated from the one who needed capital. 19th and 20th centuries In the late 19th and early 20th centuries, entrepreneurs were frequently not distinguished from managers and were viewed mostly from an economic perspective. ENTREPRENEUIRAL CULTURE: Introduction: The key growth is to foster entrepreneurial culture and play a pivotal role depending in the enterprise/organization so that, it will contribute to the success of the enterprise. Definition of culture: According to Edward burnett tylor: culture of civilization is that complex whole which includes knowledge, belief, art, moral, law, custom, and other capabilities and habits acquired by man as a member of society Clyde kluckhohn has defined culture very simply as the total life-way of a people Meaning of Entrepreneurial culture:Culture consists of tangible man-made objects, such as automobiles, clothing, furniture, buildings, and tools and intangible concepts such as laws, morals, and knowledge. In addition, culture includes the values, character, qualities, skills, acceptable within the particular society. Culture in a society is learned and is passed on from one generation to the next. Culture is nurtured, fostered and promoted. A culture is usually divided into sub-cultures based upon geography or such human characteristics as age or ethnic background.

Sub-cultures of entrepreneurship:

Culture of business Culture represents the manner in which members of a group regulate their behavior in order to be in harmony with each other and with other groups in that society it manifests itself in their pattern of behavior, forms or art and music, language, customs and practices and in the beliefs that are shared. Business and ethics: Ethics is that branch of philosophy which is concerned with rightness or wrongness, goodness or badness of human conduct. In the case of a business organization, the definition of human would extent to all activities carried out by people in the course of business. Ethics are something which need to be followed by all member of a business society, public exposure to marketing activities is higher than any other business activity. Productivity culture: Productivity improvement is not just doing things better; more importantly, it is doing the right things better. A key to productivity is the attitude of employees who work together. Attitudes reflect the interplay of many long-term and short-term factors including motivation, culture, management, systems, nature of work and personal value system. Total quality culture: TQC is the way of making an integration of all efforts in the organization between hard Ss nd soft Ss in achieving total quality and customer care. The process of TQM helps in improvement of quality of work life and employees satisfaction and customer satisfaction. culture of an organisation is influenced by the culture of the country as well as the nature of its business Organisations culture: Culture and share values: Webster says that culture is the integral pattern of human behavior that includes thought, speech and action and depends on mans capacity for learning and transmitting knowledge to succeeding generations. most elements of a culture take a long time in their evolution and equally as long to change. An organization has a mission when its culture fits with its strategy. Ten steps to changes entrepreneurial culture Changing entrepreneurial culture doesnt require magic. What it needs is down-to-earth action that will set a good example at a top. The following ten steps will help an entrepreneur to create a culture supportive of changes: 1. start at the top. Lead the enterprise. 2. Attune to a culture of innovation. 3. Remove the hidden obstacles.

4. Create an integrated enterprise culture. 5. Create a marketing culture. 6. Create a listening environment. 7. Absorb competing technologies and involve people. 8. Dont let product innovations fool you. 9. Be flexible and open for diversification and new ideas. 10. Always be ready to change cultures.

No matter what culture your firm has settled into profitably and comfortably change will eventually come along and jerk your business into a new environment. THE ENTREPRENEURIAL PROCESS The process of starting a new venture is embodied in the entrepreneurial process, which involves more than just problem solving in a typical management position. An entrepreneur must find, evaluate, and develop an opportunity by overcoming the forces that resist the creation of something new. The process has four distinct phases: identification and evaluation of the opportunity, development of the business plan, determination of the required resources, management of the resulting enterprise. Identify and Evaluate the Opportunity Opportunity identification and evaluation is a very difficult task. Most good business opportunities do not suddenly appear, but rather result from an entrepreneurs alertness to possibilities, or in some case, the establishment of mechanisms that identify potential opportunities. For example, one entrepreneur asks at every cocktail party whether anyone is using a product that does not adequately fulfill its intended purpose. This person is constantly looking for a need and an opportunity to create a better product. Another entrepreneur always monitors the play habits and toys of her nieces and nephews. This is her way of looking for any unique toy product niche for a new venture. Often, consumers are the best source of ideas for a new venture. How many times have you heard someone comment, If only there was a product that would This comment can result in the creation of new business. Whether the opportunity is identified by using input from consumers, business associates, channel members, or technical people, each opportunity must be carefully screened and evaluated. This evaluation of the opportunity is perhaps the most critical element of the entrepreneurial process, as it allows the entrepreneur to assess whether the specific product or service has the returns needed compared to the resources required. This evaluation process involves looking at the length of the opportunity, its real and perceived value, its risks and returns, its fit with the personal skills and goals of the entrepreneur, and its uniqueness or differential advantage in its competitive environment.

The market size and the length of the window of opportunity are the primary basis for determining the risks and rewards. This risks reflect the market, competition, technology, and amount of capital involved. The amount of capital needed provides the basis for the return and rewards. The methodology for evaluating risks and rewards frequently indicates that an opportunity offers neither a financial nor a personal reward commensurate with the risks involved. Follow-on products are important for a company expanding or diversifying in a particular channel. A distribution channel member such as Kmart, Service Merchandise, or Target prefers to do business with multi-product, rather than single-product, firms. Finally, the opportunity must fit the personal skills and goals of the entrepreneur. It is particularly important that the entrepreneur be able to put forth the necessary time and effort required to make the venture succeed. An entrepreneur must believe in the opportunity so much that he or she will make the necessary sacrifices to develop the opportunity and manage the resulting organization. Opportunity analysis, or what is frequently called an opportunity assessment plan, is one method for evaluating an opportunity. The assessment of the opportunity requires answering the following questions: What market need does it fill? What personal observations have you experienced or recorded with regard to that market need? What social condition underlies this market need? What market research data can be marshaled to describe this market need? What patents might be available to fulfill this need? What competition exists in this market? How would you describe the behavior of this competition? What does the international market look like? What does the international competition look like? Where is the money to be made in this activity? Developing a Business Plan A good business plan must be developed in order to exploit the defined opportunity. This is a very time-consuming phase of the entrepreneurial process. An entrepreneur usually has not prepared a business plan before and does not have the resources available to do a good job. A good business plan is essential to developing the opportunity and determining the resources required, obtaining those resources, and successfully managing the resulting venture. Determine the Resources Required The resources needed for addressing the opportunity must also be determined. This process starts with an appraisal of the entrepreneurs present resources. Any resources that are critical need to be differentiated from those that are just helpful. Care must be taken not to underestimate the amount of variety of resources needed. The downside risks associated with insufficient or inappropriate resources should also be assessed. Acquiring the needed resources in a timely manner while giving up as little control as possible is the next step in the entrepreneurial process. An entrepreneur should strive to maintain as large an ownership position as possible, particularly in the start-up stage. As the business develops, more funds will probably be needed to finance the growth of the venture, requiring more ownership to be relinquished. Alternative suppliers of these resources, along with their needs and desires, need to be identified. By understanding resource supplier needs, the entrepreneur can structure a deal that enables the recourses to be acquired at the lowest possible cost and the least loss of control.

Manage the Enterprise After resources are acquired, the entrepreneur must use them to implement the business plan. The operational problems of the growing enterprise must also be examined. This involves implementing a management style and structure, as well as determining the key variables for success. A control system must be established, so that any problem areas can be quickly identified and resolved. Some entrepreneurs have difficulty managing and growing the venture they created.