Entrepreneurship

-Part-2
By: Prof. Simranjeet Kour
Topic (Assistant Professor)
Dura
ti o n :- BE (Electronics & Instrumentation) &
4 Da MBA-HRM
ys
Syllabus
Entrepreneurship Process
 STEPS
ACTION
GAP ANALYSIS.
1. STRATEGY
2. OPERATING
1. 5 Force Model. PLAN 6
Job Loss, Urge to
earn Money,
2. PESTEL
3. SWOT 5 Managing
having idea etc.
4 Converting
and
Growing
3 Determine
Ideas into
Enterprise
Enterprise
2 Develop
the
Required
1 Identify and
Business
Plan
Resources
Analyze the
Deciding to Opportunity
become an
Entrepreneur
STEP 2 TOOLS
 Cont..
Note:-

For Detail explanation of

process Class please Refer
your Notes uploaded on
Google-Classroom
 Fa c to rs A ff e c ti n g
E nt re p re n e u rs h i p

 Capital  Caste System  Lack of confidence  Political

 Labour  Culture  Lack of Patience  Legal
 Raw material  Family Background  Lack of  Technological
 Infrastructure  Education motivation(Need  Environmental
 Market  Attitude of the Achievement)
society  Inability to dream  
 Withdrawal of status
respect.
 Cont..
Entrepreneurship is a complex phenomenon
influenced by the interplay of a wide variety of
factors. The entrepreneurial activity at any time is
dependent upon a complex and varying combination
of economic, social, political, psychological and other
factors. These factors may have been both positive
and negative effluences on the emergence of
entrepreneurship. Positive influences constitute
facilitative and conductive conclusive for the
emergence of entrepreneurship whereas negative
influences create inhibiting milieu to the emergence
of entrepreneurship.
 Cont..
1. Economic Environment:
One of the most important factor affecting entrepreneurship is economic environment. It comprises
of capital, labor, raw material and market demand.
Capital: is one of the most important factor of production for the establishment of an enterprise.
Increase in capital investment in viable projects results in increase in profits which help in
accelerating the process of capital formation. Entrepreneurship activity too gets a boost with the
easy availability of funds for investment.
Labor: Easy availability of right type of workers also effect entrepreneurship. The quality rather
than quantity of labor influences the emergence and growth of entrepreneurship. The problem of
labor immobility can be solved by providing infrastructural facilities including efficient
transportation.
Infrastructure: Basic infrastructure facilities, like transportation, communication, banks,
insurance, water, electricity, stock exchange, Marketing Services, capital market, organized product
marketing, etc. have not been up to the mark in India. As a result, the progress of industries have
been slow and the new entrepreneurs have to face difficulties in establishing the industries.
Raw Materials: it is one of the basic ingredient required for production. Shortage of raw material
can adversely affect entrepreneurial environment. Without adequate supply of raw materials no
industry can function properly and emergence of entrepreneurship to is adversely affected.
Market: The role and importance of market and marketing is very important for the growth of
entrepreneurship. In modern competitive world no entrepreneur can think of surviving in the
absence of latest knowledge about market and various marketing techniques.
 Cont..
2. Social Environment:
Strongly affect the entrepreneurial behavior, which contribute to entrepreneurial growth. The social
setting in which the people grow, shapes their basic beliefs, values and norms. The social factors can
be
Caste System :- There are certain cultural practices and values in every society which influence the’
actions of individuals. These practices and value have evolved over hundred of years. For instance,
consider the caste system (the varna system) among the Hindus in India. It has divided the population
on the basis of caste into four division. The Brahmana (priest), the Kshatriya (warrior), the Vaishya
(trade) and the Shudra (artisan): It has also defined limits to the social mobility of individuals. By
social mobility’ we mean the freedom to move from one caste to another. The caste system does not
permit an individual who is born a Shridra to move to a higher caste
Family Background –This factor includes size of family, type of family and economic status of
family. In a study by Hadimani, it has been revealed that Zamindar family helped to gain access to
political power and exhibit higher level of entrepreneurship. Background of a family in manufacturing
provided a source of industrial entrepreneurship. Occupational and social status of the family
influenced mobility. There are certain circumstances where very few people would have to be
venturesome. For example in a society where the joint family system is in vogue, those members of
joint family who gain wealth by their hard work denied the opportunity to enjoy the fruits of their
labor because they have to share their wealth with the other members of the family
 Cont..
Education :- Education, entrepreneurship and development are interrelated.
Education helps in the development of capabilities of individuals which
facilitates the emergence and growth of entrepreneurship. Education enables
one to understand the outside world and equips him with the basic knowledge
and skills to deal with day-to-day problems. In any society, the system of
education has a significant role to play in inculcating entrepreneurial values.

Attitude of the society:- A related aspect to these is the attitude of the

society towards entrepreneurship. Certain societies encourage innovations and
novelties, and thus approve entrepreneurs’ actions and rewards like profits.
Certain others do not tolerate changes and in such circumstances,
entrepreneurship cannot take root and grow. Similarly, some societies have an
inherent dislike for any money-making activity. It is said, that in Russia, in the
nineteenth century, the upper classes did not like entrepreneurs. For them,
cultivating the land meant a good life. They believed that rand belongs to God
and the produce of the land was nothing but god’s blessing. Russian folk-tales,
proverbs and songs during this period carried the message that making wealth
through business was not right.
 Cont..
3. Psychological:

Need Achievement: (Source of Motivation)

According to David Mcclelland’s psychological theory of need achievement, a
constellation of personality characteristics which are indicative of high need
achievement is the major determinant of entrepreneurship development. If the
average level of need achievement is a society is relatively high, one would expect
a relatively high amount of entrepreneurship development in the society
Lack of Self- Confidence.
Lack of patience.
Inability to Dream.
Withdrawal of Social Respect: Hagan believes that the initial condition
leading to eventual entrepreneurial behavior is the loss of statues by a group. He
postulates that four types of events can produce status withdrawal: It may drift
into situation of status inconsistency; and It may not be accepted into expected
status on migration in a new society, The group may be displaced by force, It may
have its valued symbols denigrated
 Cont..
4. Others:
Environmental factors:- These factors relate to the conditions in which an entrepreneur has to work.
If the environment that a individual is working in is unsatisfactory, that is, not conducive to his growth
needs, it is likely that the individual will quit his job and start his own business as an entrepreneur.
Unsatisfied personal needs for growth and achievement in employment conditions results in successful
entrepreneurship.
Political:-  Some researchers felt that the growth of entrepreneurship cannot be explained fully unless
the political set-up of a country is taken into consideration. Political stability in a country is absolutely
essential for smooth economic activity. Frequent political protests, strikes, etc. hinder economic activity
and entrepreneurship. Unfair trade practices, irrational monetary and fiscal policies, etc. are a roadblock
to the growth of entrepreneurship
Legal factors include – health and safety, equal opportunities, advertising standards, consumer rights
and laws, product labelling and product safety. It is clear that companies need to know what is and what
is not legal in order to trade successfully.
Technological:- We all know how fast the technological landscape changes and how this impacts the
way we market our products. Technological factors affect marketing and the management thereof in
three distinct ways:
New ways of producing goods and services
New ways of distributing goods and services
New ways of communicating with target market.
 Role of Entrepreneurship in
Economic Development
Developing
Creation of Job Nurturing the
Infrastructure
Opportunities untapped talent
facilities

Achieving plan
Reduction in the
Increase in the targets and
Social & Economic
National Revenue implementing
Evils
state policies

Increase in the
Increase in Export
Standard of Living Economic
Development
Optimum
Utilization of
Increase in GDP
Human & Physical
Revenue
Difference Between Manager and Entrepreneur Done in Tutorial-2
Session
Barriers to Entrepreneurship are Similar to Factors Affecting
Entrepreneurship
Refer notes