1.1 Business Entre

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ENTREPRENEURSHIP

DEEPAK BAJAJ


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ENTREPRENEURSHIP

Chapters

1. Entrepreneur & Entrepreneurial Management

2. Entrepreneurship Development

3. Project Management

4. Product Selection

5. Business Model

6. Project Design & Network Analysis

7. Incentives & Subsidies

8. Statutory Requirements

9. Current Trends

10. Case Studies of Leading Entrepreneurs


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ENTREPRENEUR & ENTREPRENEURIAL

MANAGEMENT

Session I

Business Entrepreneurship, EntrepreneurSession II

Characteristics & Traits of Entrepreneur

Session III

Factors Influencing Entrepreneur

Session IV

Causal Reasoning & Effectual Reasoning


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SESSION I(Business Entrepreneurship, Entrepreneur)


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ENTREPRENEUR

In the process of producing good or providing services, manyfunctionaries are generally involved. Inventorgets the idea of anew product or new service, capitalist provides the fundsneeded, specialist workers provide whatever services orexpertise needed to turn the idea in to a product or service for

sale in the market place.Managers plan the sequence of action,direct the workers to produce things, manage finances &marketing etc., to make these combined efforts successful. Yetthere is one person who initiates the action, binds every thingtogether & makes the entire system function as an enterprise.

He is the Entrepreneur, without whom the enterprise would nothave taken off.


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Entrepreneur is viewed as an initiator of action, stimulator ofsocial economic changes & a harnesser of resources & factorsof production to create wealth. Entrepreneur is one whodistinguishes as a person & must be a visionarycarrying dreams& desires to achieve & lead his enterprise & men to success. Heis not an inventor, but an innovator with outstanding

leadership qualities.Entrepreneur is an important input in economic development ofa region; he is the focal point in fields of economics. He is acritical factor in socio-economic changes; he is the key personwho envisages new opportunities, new techniques, new lines of

production, new products & co-ordinates all other activities.


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Entrepreneurship is neither a science nor an art, it is a practice, ithas a knowledge base. Knowledge in entrepreneurship is a meansto an end. Entrepreneur in essence, is one who can dream,desire, change & succeed in spite of all odd & adversities.

Intense urge to exercise power over things & objects is an intrinsicquality of an entrepreneur. Sociologists consider him as asensitive energizer in modernization of the society he lives in,his motivation & aspirations are conducive to development.

ORGANIZATION

MANAGEMENT

RISK

INNOVATION

ENTERPRISE

URGE

SKILL

VISION

GROWTH


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Definition of an Entrepreneur

Term entrepreneur is defined in a variety of ways, yet no single

expression has been found to define the precise skills &abilities that make a person a successful entrepreneur. Theconcept varies from country to country & period to period. Toarrive at some description of entrepreneur, let us study theviews of some known management gurus: -

J. A. Schumpeter A person who introduces innovations &changes is an entrepreneur.(He treated an entrepreneur as anintegral part of economic growth).

Adam SmithEntrepreneur is a person who provides capital

without taking active part in the leading role in an enterprise.Webster Entrepreneur is one who is endowed with more than

average capacities in risk of organizing & coordinating variousfactors of production.


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Peter Drucker Entrepreneur is one who always searches forchange, responds to it & exploits it as an opportunity.Innovation is a specific tool of entrepreneurs, the means by

which they exploit change as an opportunity for differentbusiness or enterprise.

Dewing The function of an entrepreneur is one that promotesideas in to business.

Frank Young Entrepreneur is a change agent.Francis A Walker True entrepreneur is one who is endowed

with more than average capabilities of organizing &coordinating various factors of production.

New Encyclopedia Britannica Entrepreneur is an individualwho bears the risk of operating a business in the face ofuncertainties about the future conditions.


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Qualities of entrepreneur have been perceived in many differentways, but the four key elements those are always involved in itare (i) Innovation, (ii) Risk taking, (iii) Vision & (iv) Organizingskill. All these four elements are interrelated & form acontinuous process in business. Entrepreneurial visionencompasses relentless pursuit for operational excellence,innovative technology & being responsive to the needs of themarket place

RISK TAKING INNOVATION

VISION ORGANIZING SKILLCHARACTER

ETHICS OPERATIONAL

EXCELLENCE


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Stages of Entrepreneurial Process

Entrepreneurial process is a leadership function which centresround the dynamics of entrepreneurial growth & change. It is a

process comprising several distinct stages. The 1st stage in the entrepreneurial process is some

change in socio-economic environment leading to changesin every aspect of life. Interalia, the change creates needsfor new goods & services.

The 2nd stage is by starting a new venture.

The 3rd process is intrapreneurship. It is the process ofextending the enterprise domain of competence byexploiting new opportunities through new combinations of

its resources. The 4th process is coordinating the varied activities to

achieve the entrepreneurial goal.


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Entrepreneurial Structure

Structure represents the formal, official task relationship ofpeople in entrepreneurial activities.

In entrepreneurial activity, policies, programs, practices &measurement make possible for innovation & growth. Theycreate proper attitude & provide proper tools. Entrepre-

neurial activity confines to the task of planning, directing,controlling, marketing, leading, motivating & channeling theactivities of individuals & the group towards entrepreneurialgoal. Structure & interpersonal relationship should be suchthat they allow people to be entrepreneurs.


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STRUCTURE

PEOPLE TECHNOLOGY

EXTERNAL

ENVIRONMENT

ENTREPRENEURIAL - STRUCTURE

RELATIONSHIP


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CLASSIFICATION OF ENTREPRENEURS

The most common classification rests on the business type.Under this classification we have: -

Business Entrepreneur-He is an individual who conceives an idea for a new product or

service & then creates a business to materialize their idea intoreality. He taps both production & marketing resources to

develop a new business opportunity.Trading Entrepreneur-

He undertakes trading activities as his enterprise & does notconcern himself with manufacturing work. He identifies

potential market, stimulates demand for his product line &creates a desire & interest among buyers to go in for hisproducts.


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Agricultural Entrepreneur -

He undertakes agricultural activities which may includeharvesting & marketing crops, fertilizers & other agricultural

inputsService Entrepreneur -

He has interest in providing one or many types of connected

services to the customers. He searches for potential avenueswhere customers are seeking convenience in their day-to-dayactivities & promptly attends to their needs. He creates &expands his customer base & maintains regular contact with hiscustomers.


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Industrial Entrepreneur

He is essentially a manufacturer who identifies the potentialneeds of customers & tailors a product or service to meet

marketing needs. He is a product oriented man who starts anindustrial unit because of the possibility of making some newproduct.

Corporate Entrepreneur

He is a person who demonstrates his innovative skills inorganizing & managing corporate undertaking a form ofbusiness organization in which he plans, develops & manages acorporate body.


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ENTREPRENEURSHIP

Entrepreneurship is the process undertaken by an entrepreneur

to augment his business interests. It is an exercise involvinginnovation & creativity that will go towards establishing theenterprise. Entrepreneurship in effect is the creation of newenterprise.

Entrepreneurship is a composite skill, the resultant of a mix ofmany qualities & traits imagination, readiness to take risks,ability to bring together & out to use various factors ofproduction, capital, labour, land, government approvals as alsoability to mobilize scientific & technological advances.


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When an enterprise is in the process of being created by anentrepreneur, it is often referred to as a new venture. Newventures typically fall in the category of small businesses &

is generally called small business owner.Small Businesses are considered to be independently owned

company that employs fewer than 500 persons.

ENTREPRENEUR ENTREPRENEURSHIP ENTERPRISE

OBJECTPROCESS OF ACTIONPERSON


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Concept of Entrepreneurship

Entrepreneurship is the propensity of mind to take calculatedrisks with confidence to achieve a pre-determined business or

industrial objective. In substance it is the risk taking capacityof an individual broadly coupled with capability to makecorrect decisions.

An enterprise finds manifestation in different ways.

Capacity to take risk independently & individually with aview to making profit,

Seizing opportunity by way of producing & or marketinggoods & commodities to meet the expanding &

diversifying actual & potential needs & demands of thecustomers is what constitute the entrepreneurialmaterial.


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Promoting Innovation: Assessing EntrepreneurialOpportunities

In his book Innovation & Entrepreneurship, noted management

consultant & writer Peter Drucker observes, Innovation is thespecific tool of entrepreneurs, the means by which they exploitchange as an opportunity for a different business or differentservices.

Understandably it is difficult to be an entrepreneur withoutengaging in at least some innovation, since merely duplicatingwhat is already being done will usually attract insufficientcustomers.


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OPPORTUNITY

CONDITIONS

NEW

INVENTIONS

HIGHLY

INNOVATIVE

MODERATELY

INNOVATIVE

SLIGHTLY

INNOVATIVE

COPYCAT

Risks Very high High Moderate Moderateto Low

Very high

Evaluation Verydifficult

Difficult Somewhatdifficult

Easy Easy

Profitpotential

Very high High High toModerate

Moderateto low

Low to nil

LEVELS OF INNOVATION

OPPORTUNITY CONDITIONS ASSOCIATED WITH

NEW VENTURE INNOVATION


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Economic & Social Contributions of Entrepreneurship

Substantial economic & social contribution by entrepreneurs &

the small businesses it generates has always been wellrecognized & has been receiving due attention from scholars &the popular media. Contributions associated withentrepreneurship in the areas of economic growth, innovation,employment opportunities, career alternatives for women &

minorities & home based business can be listed as follows: -

Economic Growth

Innovation

Employment opportunities

Opportunities for Women & Minorities Home-based Business

Growth of Entrepreneurship in India


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Growth of Entrepreneurship in India

India has a proud record of entrepreneurship in IT & related sectors.We have to now endeavour in other segments of science &technology. SSI (Small Scale Industries) platform is an ideal nursery

for testing out new sciences & technologies.However, in spite of favourable policies, govt. support, change inattitude of the society, the growth of entrepreneurship in Indiasuffers due to certain factors inherent in our social system.

Discouraging social factors unfavourable family background,family burdens, low literacy, dual role of women, disparities due tosex, caste, custom, lack of attitude, spirit, urge etc.

Discouraging economic factors inadequate infrastructuralfacilities, shortage of capital, shortage of technical labour, lack of

transportation & communication facilities, absence of regular &cheap power supply & raw material etc.

Discouraging environmental factors lack of security, absenceof ideal market conditions, red tapism in administration,complicated procedures, lack of stability in state & central

governments.


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Documents

1.1 Business Entre