ENTREPRENEUR

Entrepreneur (Oxford Dictionary)

Person who undertakes an enterprise with chances of profit or loss

Enterprise (Oxford Dictionary)

Bold Undertaking

Entrepreneur – New Encyclopedia Britannia

An individual who bears the risk of operating a business in the face of uncertainty
About the future conditions;

Common meaning
One who starts his own, new and small business

Entrepreneurship
It is a philosophy or process through which an entrepreneur seeks innovation and
Employment. It is behaviour rather than a personality trait.

Entrepreneur – Entrepreneurship – Enterprise

Person - Process or Philosophy – Object
Entre – enter Pre – before Neur – Nerve Center

Entrepreneurship Theories

 1600: French verb-entreprendre – to undertake

 1700: Person bearing risks of Profit in a fixed price contract (Risk)
 1725: Richard Cantillon – Person bearing risks is different from Capital Supplier
(Risk)
 1803: J.B.Say – Shifts economic resources out of an area of lower into an area of
higher productivity & greater yields (Value Addition)
 1934: Joseph Schumpeter – Innovator and develops untried technology
(Productivity & Innovation)
 1901: David McClelland – highly motivated energetic moderate risk taker
(Need Achievement)
 1964: Peter Drucker – Searches for change, responds to it & exploits as
opportunity (Opportunity Focused)
 1980: Karl Vesper – Behaviour Perceptions – Economists, Psychologists,
Businessmen, Politicians (Environment)
 1983: Gifford Pinchot – Entrepreneur
 1985: Robert Hisrich – Creating something different with value, devoting time &
effort,assuming risk (FPS);rewards and satisfaction (Leadership & Vision)
The nature and development of Enterpreneurship

Entrepreneur stems from French:

Means between-taker or go between

New definition involves four aspects:

- The creation process.

- The devotion of time and effort.
- The assumption of risk.
- Rewards of independence, satisfaction, money.

PETER F.DRUCKER
 Searches for change
 Responds to it
 Exploits as opportunities
 Is the process of creating something different with value by devoting the necessary
time and effort, assuming the accompanying financial, psychic, and social risks, and
receiving the resulting rewards of monetary and personal satisfaction and
independence

David Mcclelland
Thematic Apperception Test
Need for Achievement
Need for Power
Need for Affiliation

THE ENTREPRENEURIAL DECISION PROCESS REFERS TO THE DECISION TO

LEAVE A PRESENT CAREER OR LIFESTYLE DUE TO:

 Retirement
 Relocation
 Termination (VRS)
 Completion of education
 Perceived advantages over a secured job
- innovative idea
- unsuitable structured environment
- desire for self-employment
- desire to earn and retain more money
- prolonged career
- resources
Environment

Environment
 Political – System, Stability,Leadership
 Socio-cultural – Culture, Community,values,Ethics, Attitude
 Technological – Education, Absorption, Competition, Innovation
 Legal – Regulatory framework,consumer protection, concern for environment,
labour laws
 Economic – G.D.P, G.N.P, B.O.P,Resources, Fiscal and Non-fiscal policies,
Incentives and Subsidies
Entrepreneurial Behaviour (EB) is a function of individual’s personality
Characteristics (P) and environmental factors (E)

EB= f (P,E)

Characteristics of Enterpreneurship

 Mental ability
 Clear objectives
 Business secrecy
 H.R.Ability
 Communication ability
 Technical knowledge
 Achievement Oriented
 Perseverance
 Motivator
 Self Confident
 Long term involvement
 High energy level
 Problem Solver
 Initiator
 Goal Setter
 Risk Taker
Key elements of entrepreneur
Innovation
- Risk taking - Vision
- Organising skills - Ethics, Values
Need for Achievement
Advantages to self

 Self Employment
 Prolonged career for next generations
 Innovation and creativity
 Unlimited income
 Freedom to use own ideas
 Independence
 Satisfaction
Advantages to the Nation:-
 Provides larger employment
 Wider distribution of wealth
 Mobilizes local resources, skills and savings
 Accelerates the pace of economic development
 Stimulates innovation & efficiency

Factors favouring Entrepreneurship

 Growth of education – science, technical & management
 Developed infrastructure facilities
 Financial assistance
 Training facilities
 Protective and promotional policies

Competencies

Pre-requisite of Superior Performance

The Individual’s competencies
The job’s demands
The Organizational Environment
Better the balance among the three, more the occurrence of effective specific action or behaviour

What is a job competency ?

It is knowledge, skills and attitude

Knowledge – collection and retention of information
Skills and ability to master the system and sequence of behaviour (hard and soft skills)
Motives – internal states resulting from need
Traits – characteristics way in, which a person responds.

Work Commitment to contract:

Placing highest priority for getting a job completed
Taking all the effort to complete a job
Accepting responsibilities for failures
Expressing utmost concern for the customers
Readiness to work at any level to get work done.
Constantly looking for ways to do things faster or with fewer resources or at a lesser cost.
Using business tools to increase personal or professional efficiency.
Expressing concern for assessing cost versus reward of some improvements, changes or action
Systematic planning:
Developing and using logical steps to reach goals.
Breaking a large task into several sub tasks.
Developing plans after duty anticipating obstacles.
Evaluating alternatives on merits and demerits
Problem Solving:
Identifying and applying new ideas to reach the goals.
Identifying the root cause of the problem.
Developing strategies in the light of objectives, resources and constraints
Generating new ideas or innovative solutions.

Self Confidence
Having a strong belief in own abilities.
Sticking with own judgment in the face of opposition or early lack of success.
Doing something for which chances of success are not very fair.
Persuasion
Persuading others successfully
Selling someone an idea, product or service.
Making someone agree to provide resources
convincing with confidence, competence and respect.

Use of influence strategies

Using a variety of strategies to influence others successfully
Developing professional and business contacts
Using influential people to get own things done.
Carefully limiting the information to be given to others
Using others authority and resources.

Assertiveness:
Confronting problems and issues with other directly
Speaking politely but firmly
Telling others clearly what they have to do
Reprimanding those who fail to perform as expected however close they may be

Monitoring

Ensuring smooth progress of project or work

Personally supervising all aspects of the work to its completion
Developing a system of supervision and monitoring.
Concern for others welfare:

Having a concern and taking actions to improve others welfare.

Responding positively to employees specific needs
Having a concern for the welfare of employees, their facilities and society at large.
Achievements: Initiative, seeing and acting on opportunities, persistence, information seeking,
concern for high quality of work, commitment to work contract, efficiency, orientation.
Thinking and Problem solving:- Systematic planning, Problem solving.
Personal Maturity:- self confidence
Influence:-Persuasion, use of influence, strategies, assertiveness.
Directing and controlling others:- monitoring concerns for theirs welfare.
Competency gets reflected in the job.
Competency is related to superior performance
Competency enables to perform better than others.

Initiative
Taking actions that go beyond job requirements or demands of the situation. Doing things on own
before being asked for or being forced by the events. Taking actions to expand the business into
new areas, products and services.
Seeing and acting on opportunities
Looking for and taking actions to seize opportunities.
Seeing and acting on opportunities for business development or for personal growth.
Seeing unusual opportunities to obtain and mobilise necessary resources.

Persistence:
Taking repeated actions to overcome obstacles that get in the way of achieving goals
Taking actions in the face of obstacles.
Ensuring all efforts to solve a problem or barrier.

Information Seeking:
Taking actions on own to help reach objectives.
Personally undertaking a research or analysis to find out answers to some problem.
Seeking information to clarify what is needed.
Using networks to obtain information

What makes a successful entrepreneur

 The urge for achievement

 Determination to win
 Willingness to take moderate risks
 Ability to identify & explore opportunities
 Analytical ability to take strategic decisions
 Perseverance
 Flexibility
 Capacity to plan and organize
 Preparedness to undergo physical and emotional stress
  Positive self concept
 Future orientation

Who can be an Entrepreneur ?

 Who can take moderate risks

 Who has ability to work hard
 Who can capitalize on opportunities
 Who has some financial strength
 Who feels the need for achievement
 Who has desire for responsibility
 Who has perception of probability of success
 Who gets stimulation by feedback
 Who possess skill in organizing
 No restriction of age or sex
 Previous experience not necessary, but deisred.

Why men become entrepreneurs

Socio-Cultural reasons:
 Family traditions – Jewellers, Merchants, feudal land owners etc. Sons expected to keep the
tradition alive.
 Inheritance – paternal as well as from wife’s family.
 Position of power enjoyed by parent – Top Govt/Corporate officials.
 Social ties – school, college, clubs, peer group – Develop contacts.
 No restrictions on area of operation, travel, hours of work etc.

Behavioural Reasons:
 Better risk taking abilities – Boldness, enterprising, resourceful.
 Men enjoy more choices in life.
 Feeling of worth is important for a man
 Can count on family support – security
 Image – The person is regarded as a go-getter.
 Motivated by need for greater independence – owner.
 Fear of failure becomes a driving force to ensure success.
 Impersonal attitude

 Financial & economic reasons

 Greater resourcefulness
 Better credibility of the ability to run a business
 Ability to form partnerships, alliances etc.
 Better analytical ability
Women Entrepreneur
Definition
 By Schumpeter:
Women who innovate, imitate or adopt a business activity are called “Women
Entrepreneurs
 The Government of India:
An enterprise owned and controlled by a women having a minimum financial interest of 51 percent
of the capital and giving at least 51 percent of employment generated in the enterprise to women.

 Push Factor
 Pull Factor

Comparison between Men and Women Entrepreneurs

Motivation

 Male Entrepreneurs:
Job satisfaction arising from the desire to be in control
 Female Entrepreneurs:

Departure Point

 Male Entrepreneurs:
 Dissatisfaction with present job
 sideline in college,
 sideline to present job, or
 outgrowth of present job,
 discharge or layoff,
 opportunity for acquisition

 Female Entrepreneurs:
 Job frustration,
 Interest in and recognition of opportunity in the area.
 Change in personal circumstances

SOURCE O FUNDS

 Male Entrepreneurs:
 Personal assets and savings.
 Bank financing.
 Investors.
 Loans from family and friends
  Female Entrepreneurs:
 Personal assets and savings.
 Personal loans

Occupational Background

 Male Entrepreneurs:
 Experience in line of work.
 Recognized specialist or one who has gained a high level of achievement in the field
 Competent in a variety of business functions

 Female Entrepreneurs:
 Middle management experience in the field
 Administrative level
 Service related occupational background

Personality Characteristics

 Male Entrepreneurs:
 Opinionated and persuasive
 Goal oriented
 Innovative and idealistic
 High level of self confidence
 Independence

 Female Entrepreneurs:
 Flexible and tolerant
 Creative and realistic
 Medium level of self confidence
 Ability to deal with the social and economic environment.

Background

 Male Entrepreneurs:
 25-35
 Bachelors degree
 Female Entrepreneurs:
 35-45
 Masters degree

Support Groups

 Male Entrepreneurs:
 Friends
 Professional acquaintances
 Business associates
  Female Entrepreneurs:
 Close friends
 Spouse
 Family
Types of Business Started

 Male Entrepreneurs:
 Manufacturing
 Female Entrepreneurs:
 Service related

Statistics

 Female Male
 Literacy : 40% 60
 Work Participation : 20% 52
 Urban Population : 10% 18

Women Entrepreneurs is only 5.2% of total self employed in India

Problems of women entrepreneurs

 Problem of finance
 Scarcity of raw material
 Stiff competition
 Limited mobility
 Family ties
 Lack of education
 Male dominated society
 Low risk bearing ability