WHO IS AN ENTREPRENEUR ?

Entrepreneur:
Insane Perseverance
In face of Total Rejection

According to George Bernard Shaw, people

fall into three categories:
(1) those who make things happen.
(2) those who watch things happen, and
(3) those who are left to ask what did
happen.

WHO CAN BE AN
ENTREPRENEUR ?

1.
2.
3.
4.
5.

Who feels the need for achievement

Who can take moderate risks
Who possess skills in organizing
Who can capitalize on opportunities
Who has some financial strength On his own
or borrowed
6. Who has ability to work hard
7. Who has desire for responsibility
8. Who has a clear perception of probability of
success
9. Who gets stimulation by feedback
10. Anyone He can be male or female
11. Who does not have previous experience

What is the best age to

become an
entrepreneur ?

Origin of Entrepreneur
Entrepreneur is a person who creates an
enterprise.
The word entrepreneur is derived from
the French verb entreprendre which means
to undertake.
This refers to those who undertook the risk
of new enterprises.

CONCEPT OF
ENTREPRENEURSHIP
Richard
Cantillon
David
McClleland
Kilby

Entrepreneur Non-insurable
Risk Bearer

Person with a high need for

achievement

Imitates Technology Developed by

others

CONCEPT OF
ENTREPRENEURSHIP

Albert
Shapero
Kirzner

Takes initiative, accepts risk and has an

internal locus of control

Alertness to new opportunities

Seizing an opportunity by taking
innovative actions

EVOLVING CONCEPT OF
ENTREPRENEURSHIP

EARLY PERIOD: The earliest definition of the entrepreneur as a go-between is

Marco Polo. He tried to establish trade route to the far East. He used to sign a contract
with a venture capitalist to sell his goods. The capitalist was the risk bearer. The
merchant adventurer took the role of trading. After his successful selling of goods and
completing his trips, the profits were shared by the capitalist and the merchant.
MIDDLE AGES: The term entrepreneur was referred to a person who was
managing large projects. He was not taking any risk but was managing the projects
using the resources provided. An example is the cleric who is in charge of great
architectural works such as castles, public buildings, cathedrals etc.
17th CENTURY: An entrepreneur was a person who entered into a contractual
arrangement with the Govt. to perform a service or to supply some goods. The profit
was taken (or loss was borne) by the entrepreneur.
18th CENTURY: It was Richard Cantillon, French Economist, who applied the
term entrepreneur to business for the first time. He is regarded by some as the founder
of the term. He defined an entrepreneur as a person who buys factor services at certain
prices with a view to sell them at uncertain prices in the future.

EVOLVING CONCEPT OF
ENTREPRENEURSHIP

19th CENTURY: The entrepreneurs were not distinguished from

managers. They were viewed mostly from the economic perspective. He
takes risk, contributes his own initiative and skills. He plans, organizes and
leads his enterprise.
20th CENTURY: During the early 20th century Dewing equated the
entrepreneur with business promoter and viewed the promoter as one who
transformed ideas into a profitable business. It was Joseph Schumpeter who
described an entrepreneur as an innovator. According to him an
entrepreneur is an innovator who develops untried technology.
21th CENTURY: Research Scientists live De Bone pointed out that it is
not always important that an individual comes up with an entirely new idea
to be called an entrepreneur, but if he is adding incremental value to the
current product or service, he can rightly be called an entrepreneur

CONCEPTOF
ENTREPRENEUR

Richard Cantillon (1725): An entrepreneur is a person who pays a

certain price for a product to resell it at an uncertain price, thereby
making decisions about obtaining and using the resources while
consequently admitting the risk of enterprise.

According to Adam Smith, Entrepreneur is an individual who

undertakes the formation of an organization for commercial purposes
by recognizing the potential demand for goods and services and
thereby acts as an economic agent and transforms demand and
supply.

According to J.B.Say (1803), Entrepreneur is the co-ordinator and

organizer of resources to design a business enterprise.

CONCEPTOF
ENTREPRENEUR

According to Joseph Schumpeter (1934), Entrepreneurs are

innovators who use the process of shattering the status quo of the
existing products and services to set new products, new services. He
describes entrepreneur as innovators.

David McClleland (1961) An entrepreneur is a person with a high

need for achievement [N-Ach]. He is energetic and a moderate risk
taker.

Peter Drucker (1964), Entrepreneur is one who is involved in

gathering and using resources to make use of opportunities to produce
results.

CONCEPT OF
ENTREPRENEURSHIP

John Kaso and Howard Stavenson: Entrepreneurship is the attempt to

create value through recognition of business opportunity, the
management of risk taking appropriate to the opportunity and through
the communicative and management skills to mobilise human, financial
and material resources necessary to bring a project to fruition.

Kilby (1971): Emphasizes the role of an imitator entrepreneur who does

not innovate but imitates technologies innovated by others. Are very
important in developing economies.

Albert Shapero (1975): Entrepreneurs take initiative, accept risk of

failure and have an internal locus of control.

G. Pinchot (1981): Intrapreneur is an entrepreneur within an already

established organization.

ENTREPRENEUR
RISK-TAKER

RESOURCE ASSEMBLER
ORGAINSATION
BUILDER
INNOVATOR

CHARACTERISTICS OF A SUCCESSFUL
ENTREPRENEUR
CREATIVITY
INNOVATION
DYNAMISM
LEADERSHIP
TEAMBUILDING

CHARACTERISTICS OF A SUCCESSFUL
ENTREPRENEUR
ACHIEVEMENT MOTIVATION
PROBLEM SOLVING
GOAL ORIENTATION
RISK TAKING & DECISION MAKING
ABILITY
COMMITMENT

ENTREPRENEURIAL
COMPETENCIES
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.

Initiative
Looking for Opportunity
Persistence
Information Seeker
Quality Consciousness
Commitment to work
Commitment to Efficiency
Proper Planning
Problem Solver
Self-Confident
Assertive
Persuasive
Effective Monitoring & strategists
Employees Welfare

FUNCTIONS OF AN
ENTREPRENEUR
1. Scouting of Entrepreneurial Opportunities

2. Generation of Business Ideas

3.Converting the idea into reality

4. Arranging Resources (human resource,

materials, money, machines etc)

FUNCTIONS OF AN
ENTREPRENEUR
5.Supply of Capital
6. Establishment of Enterprise
7. Managing the Enterprise
8. Growth & Development

KILBYs CLASSIFICATION OF FUNCTIONS

EXCHANGE
RELATIONSHIP

POLITICAL
ADMINISTRATION

1. Perceiving market opportunities

2.Gaining command over scarce
resources
3.Purchasing inputs
4.Marketing of the products & responding
to competition

5.Dealing with the public bureaucracy

6.Managing human relations within the
firm
7.Managing customer & supplier relations

KILBYs CLASSIFICATION OF FUNCTIONS

MANAGEMENT
CONTROL

8.Managing Finance
9.Managing production

Acquiring & overseeing the assembly of

the factory
11.Industrial engineering
12. Upgrading process and product quality
13.Introducing new production techniques
and products
10.

TECHNOLOGY

BASED ON FUNCTIONAL
CHARACTERISTICS
Innovative Entrepreneur
Imitative or Adoptive
Entrepreneur
Fabian Entrepreneur
Drone Entrepreneur

BASED ON FUNCTIONAL
CHARACTERISTICS
Aspiring Entrepreneur
Lifestyle Entrepreneur
Growth Entrepreneur
Opportunist Entrepreneur

BASED ON FUNCTIONAL
CHARACTERISTICS
E-Entrepreneurs
Entrepreneur
Mompreneurs
Opportunist Entrepreneur

BASED ON TYPES OF ENTREPRENEURIAL

BUSINESS

MANUFACTURING
WHOLESALING
RETAILING
SERVICE

OTHER CATEGORIES OF
ENTREPRENEURS
1. Individual Entrepreneurs
2. Institutional Entrepreneurs
3.Entrepreneurs by inheritance
4. Trading entrepreneurs
5. Industrial entrepreneurs
6.Corporate entrepreneurs
7. Agricultural entreprenurs
8. Technical & Non-technical entrepreneurs
9. Professional Entrepreneurs
10. First Generation Entrepreneurs

FACTORS AFFECTING
ENTREPRENEURIAL GROWTH
PSYCHOLOGICAL FACTOR
CULTURAL FACTORS
SOCIAL FACTORS
ECONOMIC FACTORS
PERSONALITY FACTOR

PSYCHOLOGICAL FACTORS

Inspiration for achievement prepares an entrepreneur to set higher

goals and achieve them.

(A) Need for Achievement: - Need for achievement means the drive to
achieve a goal. People having need for achievement will be so much self
confident that they do not believe in mere luck.
(B) Personal Motives: - These have been found to be one of the crucial
factors responsible for entrepreneurship amongst individuals.
(C) Recognition: - Many people become successful entrepreneurs just for
getting recognition from others.
(D) Need of Authority: - Need of authority will inspire men to work. When
they become entrepreneurs, they can exercise authority over managers,
employees etc.

CULTURAL FACTORS
(A) Culture: - Culture is closely related with accepted values and human
behaviour.
(B) Religious Belief: - According to Max Weber, entrepreneurism is a
function of religious belief and the impact of religion shapes the
entrepreneurial culture.
(C) Minority Groups: - Hoselitz explained that the supply of
entrepreneurship is governed by cultural factors, and culturally
minority groups are the spark plugs of entrepreneurial and economic
development.
(D) Spirit of Capitalism: - It guides the entrepreneur to engage in
activities that can bring more and more profits. The profit motive
character coupled with the attitude towards acquisition of money
urges the individual to start new venture.

SOCIAL FACTORS
(A) Legitimacy of Entrepreneurship: - System of norms and values within a
socio cultural
setting is responsible for the emergence of entrepreneurship.
(B) Social Marginality: - Individuals or groups on the perimeter of a given
social system or between two social systems provide the personnel to
assume the entrepreneurial roles.
(C) Family, Role Models and Association with Similar Type of Individuals: - If
an individual has a supportive family, he or she is more likely to become
an entrepreneur. Similarly, if anindividual has role models who have been
successful in entrepreneurship, certainly, he may be motivated to start
ventures. If a person is in association with entrepreneurs, this may add to
his or her desire of setting up a new venture.
(D) Caste System: - Certain religions and caste encourage the growth of
entrepreneurial talent. Some religious communities like the parsees,
marwaris and sindhees seem to have an affinity for entrepreneurial
activity.

SOCIAL FACTORS
(E) Occupation :- Those born in rich families with silver spoons in
their mouth have not only an advantage of having financial
resources for carrying out business but also learn the business skill
by continuous interaction and contacts with parents, customers,
employees and visitors in family shops, offices and homes.
(F) Education and Technical Qualifications: - Education is the best
means of developing mans resourcefulness which encompasses
different dimensions of entrepreneurship.
(G) Social Status: - Every human being aspires for a high social status
and once he achieves a reasonable level, his aspirations and
desires for its start getting multiplied. People work hard to maintain
their status as it also contributes to their entrepreneurial growth.
(H) Social Responsibility: - It is the obligation to the society in which
the business enterprise operates. An entrepreneur generates
employment for others besides helping himself.

ECONOMIC FACTORS
(A) Infrastructural Facilities: - Entrepreneurship development requires certain
basic infrastructure like power, transportation, communication, technical
information etc. These provide external economies and improve the
efficiency of investments by entrepreneurs.
(B) Financial Resources: - Finance is the life blood of business activity. Capital
is required to obtain materials, machinery, equipment, etc. and to undertake
innovation.
(C) Availability of Material and Know How: Entrepreneurship is encouraged
only if there is an adequate supply of materials and know-how. Easy
availability of materials attracts more individuals towards entrepreneurship.
(D) Labour Conditions: - The quality rather than quantity of labour is another
factor which influences the emergence and growth of entrepreneurship.

ECONOMIC FACTORS
(E) Market: - The size and composition of market influence
entrepreneurship in their own ways.
(F) Support System: - Ability, initiative and support systems
include financial and commercial institutions, research,
training, consultancy services, ancillary industry etc.
(G) Government Policy: - The socio- political and economic
policies of the government inhibit or foster entrepreneurial
growth. Land and factory sheds at concessional rates,
adequate sources of power, supply of materials and other
physical facilities should be provided by the government to
facilitate the setting up of new enterprises.

PERSONALITY FACTORS
(A)Personality: - The entrepreneurial personality comprises of the
person, his skills, styles and motives. Impressive personality and
individual skill help to develop entrepreneurship.
(B)Independence:-Another personality factors which influences
entrepreneurship is independence. An entrepreneur works out
plans on his own, searches and explores resources and
experiences and uses inner urge to make the enterprise a success
instead of waiting for suggestions or directions from others.
(C)Compulsion: - Certain compelling reasons also force the people to
become entrepreneurs. These include: (a) unemployment or
dissatisfaction with existing job or occupation, (b) to use technical
or professional knowledge and skills, (c) to put the idle funds to
use

ENTREPRENEURSHIP DEVELOPMENT CYCLE

Identification of potential entrepreneurs, motivational training, availability of technoeconomic information, evolving locally suitable new products & processes

STIMULATING Creating entrepreneurial forums, help & guidance in selecting products & preparing
project reports

ACTIVITIES

SUPPORT
ACTIVITIES

Arranging finance, registration of units, supply of scarce raw materials, providing land,
shed, power water etc
Getting licenses, granting tax relief, help marketing the product, consultancy & training

Help modernization, diversification/expansion etc

SUSTAINING Additional financing, deferring repayment, production units legislation/policy change

ACTIVITIES

PROBLEMS FACED BY ENTREPRENEURS

INTERNAL

EXTERNAL

SPECIFIC
MANAGEMENT
PROBLEMS

INTERNAL PROBLEM FACED BY

ENTREPRENEURS

Internal
Problems
Planning(Technical
Feasibility & Economic
Viability)

Implementation

Production(Production,
Labour, Marketing,
Financial &Administrative
Management)

EXTERNAL PROBLEMS OF
ENTREPRENEURS

INFRASTRUCTURAL

FINANCIAL

Location, power, water,

communication irregular supply
of critical raw material etc

Capital, working capital, long

term funds, recovery,
marketing, taxation,
administrative hurdles,
technology etc.

SPECIFIC MANAGEMENT
PROBLEMS
Management Deficiency

Financial Inadequacy

Manufacturing/Technical Problems, Technical

know-how
Human resource development & preparation of
project report

ENTREPRENEURSHIP & ECONOMIC

DEVELOPMENT
Capital Formation
Improvement in per capita income
Generation of employment
Balanced Regional Development
Economic Independence
Backward & Forward Linkages

How is a manager different

from entrepreneur ?

Similarities Between Managers &

Entrepreneurs
Areas of Similarity

Managers

Entrepreneurs

To produce results

Results of today, this

month, year

Results of tomorrow, next

year and long term

To produce results
through people

Men of details

Strategists

To take decisions

Operational &
Administrative Decisions

Strategic

To co-operate under
constraints

Usually organizational
constraints

Environmental
Constraints

To follow sound principles

of management

Oriented towards internal Principles are oriented

administration and
towards macro-social
control
aspects like social
responsibility, equal
opportunity, ethical
advertisement etc.

Who is an intrapreneur ?

CONCEPT OF
INTRAPRENEUR

Gifford and Elizabeth Pinchot coined the term intracorporate entrepreneur in 1973 which later was recoined as intrapreneur.

Intrapreneurship implies that entrepreneurial activities

are explicitly supported within the established
organisations, provided with orgainsational resources,
and accomplished by company employees.

An intrapreneur violates policy, ignores the chain of

command, defies established procedures and comes
up with a new product for the company in which he is
employed.

DIFFERENCE BETWEEN ENTREPRENEUR & INTRAPRENEUR

BASIS
1. Status
2. Capital
3. Freedom
4. Risk-taking
5. Guarantee
6. Norms and rules

ENTREPRENEUR
1. Owner of the business
2. Provides the requisite
capital himself
3. Works independently
4.Bears full risk
5.Guarantees payment to
suppliers of inputs
6.Frames rules &
regulations himself

INTRAPRENEUR
1. Works as employee
2. Does not raise any
capital
3.semi-independent
4.Does not bear any risk
5.No such guarantee is
required
6. Bound to follow the
rules and regulations of
the organisation

ENTREPRENEURS V/S. INTRAPRENEURS &

TRADITIONAL MANAGERS
BASIS OF
DIFFERENCE

TRADITIONAL
MANAGERS

ENTREPRENEURS

INTRAPRENEURS

Primary Motives

Promotion & traditional

corporate awards

Independence,
opportunity to create
and money

Independence & ability

to advance in the
corporate rewards

Time Orientation

Short-term and annual

planning horizon

Survival and achieving

5-10 years growth of
business

Depends on urgency
to meet self-imposed
and corporate time
table

Activity

Delegate and
supervises more than
direct involvement

Direct Involvement

Direct involvement
more than delegation

Minimal risk

Moderate - High risk

Moderate risk

In consonance with top

management

Follows dreams with

decisions

Able to get others to

agree to help achieve
dream

Relationship with
others

Hierarchy as basic
relationship

Transactions and deal

making as basic
relationship

Transactions with
hierarchy

Failures & Mistakes

Avoids committing
mistakes

Deals with failures and

mistakes

Attempts to hide risky

project from
management until
complete

Risk
Decisions

Concept of Values

Values are the inner most layer of the self

which provides the goal and direction to an
individual.

Values are also responsible for the

selectively organised perception and
interaction which an individual has with his
outside world or the environment.

4 KEY VALUES (By Akhori & Mishra,

1988)

Innovativenes
s

Independence

Outstanding
Performance

Respect for
Work

Concept of Attitude

Attitude is defined as an enduring

organization of motivational,
emotional, perceptual and cognitive
process with respect to some aspect of
individuals work.

What kind of attitude is required to

become a successful entrepreneur ?

ENTREPRENEURIAL ATTITUDE
(Akhori & Mishra)
1.

Tendency to take moderate risk

2.

An eye for economic opportunity

3.

Imaginative

4.

Initiative

5.

Believe that they can change the environment

6.

Enjoy freedom of expression

7.

Analyzing situation and planning action

8.

Satisfaction from successful completion of task

CHARACTERISTICS AND ROLE DEMANDS OF

ENTREPRENEURS
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.

Need to Achieve (Desire to be a winner)

Perseverance (Quality to stick to it)
Moderate Risk Taker (Prefer middle of the road)
Use of feedback (knowing how they perform)
Facing Uncertainty (Tolerance for ambiguity & unfamiliar situations)
Stress Takers (Possess drive & energy)
Self-confidence (Faith in their abilities)
Initiative (Seeking responsibilities)
Positive Self-Concept(Aware of oneself and internal locus of control)
Motivators (Possess interpersonal skills)
Flexibility (Flexible in Decisions)
Analytical Ability (unaffected by personal likes & dislikes)
Independence (Dislike working for others)
Ability to find and explore opportunity