CHAPTER 1

Q-1 what is management?

- Ans - defines management as “a process consisting of planning, organizing, actuating and controlling performed to determine and accomplish the objectives by the use of people and resources”.

- Management of an organization is the process of establishing objectives and goals of the organization periodically, designing the work system and the organization structure, and maintaining an environment in which individuals, working together in groups, accomplish their aims and objectives and goals of the organization effectively and efficiently

Q-2 level of management

Ans - People in an organization are arranged in an hierarchy and they all have the relationship of superior-subordinates. Every manager in an organization performs all five management functions. The relative importance of these functions varies along the managerial levels. There may be as many levels in the organization as the number of superiors in a line of command. Some of these levels are merged into one on the basis of nature of functions performed and authority enjoyed. E.F.L. Brech has classified management levels into three categories – Top Management, Middle Management and Supervisory/Lower Level as shown in fig 1.3.

TopBoard of Directors, Chairman, Chief Executive

Middle

Department Heads, Divisional Heads, Section Heads

Lower Senior Supervisor, Front Line Supervisors

Fig. 1.3: Levels of management

Top management of an organization consists board of directors, chairman and chief executive officer. Top level management determines goals and objectives. It performs overall planning, organizing, staffing, directing and controlling. It integrates organization with environment, balances the interest groups and is responsible for overall results. Middle management stands between top management and supervisory management level. Middle level management establishes programs for department and carries out functions for achieving specific goals. The other functions of middle level management are training and development of employees, integrating various parts of the department. Supervisory management is concerned with efficiency in using resources of the organization. A supervisor is an executor of policies and procedures making a series of decisions with

well-defined and specified premises.

Q-3 function of management

Ans - (1) Planning : Planning is the primary function of management. It is looking ahead

and preparing for the future. It determines in advance what should be done. It is conscious determination of future course of action. This involves determining why to take action? What action? How to take action? When to take action? Planning involves

(2) Organizing : Organizing is the distribution of work in group-wise or section-wise for effective performance. Once the managers have established objectives and developed plans to achieve them, they must design and develop a human organization that will be able to carry out those plans successfully. Organizing involves dividing work into convenient tasks or duties, grouping of such duties in the form of positions, grouping of various positions into departments and sections, assigning duties to individual positions and delegating authority to each position so that the work is carried out as planned.

According to Koonz O’Donnel, “Organization consists of conscious coordination of people towards a desired goal”. One has to note that different objectives require different kinds of organization to achieve them. For example, an organization for scientific research will have to be very different from one manufacturing automobiles.

(3) Staffing : Staffing involves managing various positions of the organizational structure. It involves selecting and placing the right person at the right position. Staffing includes identifying the gap between manpower required and available, identifying the sources from where people will be selected, selecting people, training them, fixing the financial compensation and appraising them periodically. The success of the organization depends upon the successful performance of staffing function.

(4) Directing : Planning, organizing and staffing functions are concerned with the preliminary work for the achievement of organizational objectives. The actual performance of the task starts with the function of direction. This function can be called by various names namely “leading”, “directing”, “motivating”, “activating” and so on. Directing involves these sub functions:

(a) Communicating: It is the process of passing information from one person to another.

(b) Leading: It is a process by which a manager guides and influences the work of his subordinates.

(c) Motivating: It is arousing desire in the minds of workers to give their best to the enterprise.

(5) Controlling: Planning, organizing, staffing and directing are required to realize organizational objectives. To ensure that the achieved objectives confirm to the pre-planned objectives control function is necessary. Control is the process of checking to

determine whether or not proper progress is being made towards the objectives and goals and acting if necessary to correct any deviations. Control involves three elements:

(a) Establishing standards of performance. (b) Measuring current performance and comparing it against the established

standard. (c) Taking action to correct any performance that does not meet those standards.

(6) Innovation: Innovation means creating new ideas which may be either results in the development of new products or finding new uses for the old ones. A manager who invents new products is an innovator. A salesman who persuades Eskimos to purchase refrigerator is an innovator. One has to note that innovation is not a separate function but a part of planning.

(7) Representation: A manager has to spend a part of his time in representing his organization before various groups which have some stake in the organization. A manager has to be act as representative of a company. He has dealings with customers, suppliers, government officials, banks, trade unions and the like. It is the duty of every manager to have good relationship with others.

Q-4 roles of ,manager

Roles of Manager

Interpersonal Roles Information Roles Decisional Roles

Figurehead Monitor EntrepreneurLeader Disseminator Disturbance handlerLiaison Spokesperson Resource Allocator

Negotiator

Interpersonal role: This role is concerned with his interacting with people both organizational members and outsiders. There are three types of interpersonal roles:

(1) Figure head role: In this role manager has to perform duties of ceremonial nature such as attending social functions of employees, taking an important customer to lunch and so on.

(2) Leader role: Manager’s leader role involves leading the subordinates motivating and encouraging them.

(3) Liaison: In liaison role manager serves as a connecting link between his

organization and outsiders. Managers must cultivate contacts outside his vertical chain to collect information useful for his organization.

Information roles: It involves communication. There are three types of infor-mational roles:

(1) Monitor: In his monitoring role, manager continuously collects information about all the factors which affects his activities. Such factors may be within or outside organization.

(2) Disseminator: In the disseminator role, manager possesses some of his privileged information to his subordinates who otherwise not be in a position to collect it.

(3) Spokesperson: As a spokesperson manager represents his organization while interacting with outsiders like customers, suppliers, financers, government and other agencies of the society.

Decisional roles: Decisional role involves choosing most appropriate alternative among all so that organizational objectives are achieved in an efficient manner. In his decisional role manager perform four roles:

1. Entrepreneur: As an entrepreneur, a manager assumes certain risks in terms of outcome of an action. A manager constantly looks out for new ideas and seeks to improve his unit by adopting it to dynamic environment.

2. Disturbance handler: In this role manager works like a fire-fighter manager contains forces and events which disturb normal functioning of his organization. The forces and events may be employee complaints and grievances, strikes, shortage of raw materials etc.

3. Negotiator: In his role of negotiator, manager negotiates with various groups in the organization. Such groups are employees, shareholders and other outside agencies.

Readers are advised to note that management functions and roles do not exist opposite to each other but these are two ways of interpreting what managers do. All these roles can be integrated with earlier classification of management which is presented in fig. 1.2.

PlanningInterpersonal Role

Organizing

Informational RoleStaffing

Directing

Decisional Role

Controlling

Fig. 1.2: Functions and roles of manager

In planning a manager performs informational and decisional role as he has to collect information on the basis in which he makes decisions. Similarly in performing other functions some or the other roles are performed by manager.

Q -5 skill of engineer as manager

In addition to fulfilling numerous roles the manager also need a number of specific skills if he wants to be succeed. The most fundamental management skills are technical. Interpersonal, conceptual, communication decision making and time management skills.

Figure: Managerial Skill (For All Level Managers)

Technical Skills:

Technical skills are the skills necessary to accomplish or understand the specific kind of work being done in an organization. Technical skills are especially important for first line managers. These managers spend most of their time training subordinates and answering question about work related problems. They must know how to perform tasks assigned to those they supervise if they are to be effective managers.

Interpersonal Skills:

Managers spend considerable time interacting with people both inside and outside the organization. For obvious reasons then the manager also needs interpersonal skills- the ability to communicate with, understand and motivate both individuals and groups. As a manager climbs the organizational ladder, he or she must be able to get along with subordinates, peers and those at higher level of the organization. Because of the multitude of roles manager must fulfill, a manager must able to work with suppliers, customers, investors, and others outside of the organization. Although some managers have succeeded with poor interpersonal skills, a manager who has good interpersonal skills is likely to be more successful.

Conceptual Skills:

Conceptual skills depend on the manager’s ability to think in the abstract. Managers need the mental capacity to understand the overall working of the organization and its environment, to grasp how all the part of the organization fit together, and view the organization in a holistic manner. This allows them to think strategically, to see the ‘big picture’, and to make broad based decisions that serve the overall organization.

Diagnostic Skills:

Successful managers also possess diagnostic skills, or skills that enable a manager to visualize the most appropriate response to a situation. A physician diagnoses a patient illness by analyzing symptoms and determining their probable cause. Similarly, a manager can diagnose and analyze a problem in the organization by studying its symptoms and then developing a solution.

Communication Skills:

Communication skills refer to the manager’s ability both to effectively convey ideas and information to others and to effectively receive ideas and information from others. This skills enable a manager to transmit ideas to subordinates so that they know what is expected, to coordinate work with peers and colleagues so that they work well together properly, and to keep higher level managers informed about what is going on. In addition, communication skills help the manager listen to what others say and to understand real meaning behind letters, reports, and other written communication.

Decision-Making Skills:

Effective managers also have good decision making skills. Decision making skills refers to the manager’s ability to correctly recognize and define problems and opportunities and to then select an appropriate course of action to solve the problems and capitalize on opportunities. No manager makes the right decision all the time. However, effective managers make good decision most of the time. And when they do make a bad decision, they usually recognize their mistake quickly and then make good decision to recover with as little cost or damage to their organization as possible.

Time-Management Skills:

Finally, effective managers usually good time management skills. Time management skills refer to the manager’s ability to prioritize work, to work effectively, and to delegate appropriately. As already noted, managers face many different pressures and challenges. It is too easy for a manager to get bogged down doing work that can easily be postponed or delegated to others. When this happens, unfortunately, more pressing and higher priority work may get neglected.

Q-6 planning is pervasive

Planning is pervasive and it extends throughout the organization. Planning is the fundamental management function and every manager irrespective of level, has a planning function to perform within his particular area of activities. Top management is responsible for overall objectives and action of the organization. Therefore it must plan what these objectives should be and how to achieve them. Similarly a departmental head has to devise the objectives of his department within the organizational objectives and also the methods to achieve them. Thus planning activity goes in hierarchy as shown in fig 2.2.

Corporate or Organizational Plan

Divisional Plan

Departmental Plan

Sectional Plan

Fig. 2.2: Planning at various levels

CHAPTER 2

Q- 7 What is CSR And dimension of it

Ans:-

Corporate social responsibility (CSR), is the idea that business has a duty to serve society in general as well as the financial interests of stockholders.

Dimenions:

The environmental (sustainability) dimension of CSREnvironmental sustainability (according to the World Bank) means ‘ensuring that the over-all productivity of accumulated human and physical capital resulting from development actions more than compensates for the direct or indirect loss or degradation of the environ-ment’, or (according to the Brundtland Report from the United Nations) it is ‘meeting the needs of the present without compromising the ability of future generations to meet their own needs’. Put more directly, it is generally taken to mean the extent to which business activity negatively impacts on the natural environment. It is clearly an important issue, not only because of the obvious impact on the immediate environment of hazardous waste, air and even noise pollution, but also because of the less obvious, but potentially far more damaging issues around global warming.

The social dimension of CSR

The fundamental idea behind the social dimension of CSR is not simply that there is a con-nection between businesses and the society in which they operate (defined broadly) – that is self-evident. Rather it is that businesses should accept that they bear some responsibility for the impact they have on society and balance the external ‘societal’ consequences of their actions with the more direct internal consequences, such as profit.

The economic dimension of CSR

If business could easily adopt a more CSR-friendly position without any economic conse-quences, there would be no debate. But there are economic consequences to taking

socially responsible decisions. Some of these will be positive, even in the short term. Others will be negative in the sense that managers believe that there is a real cost in the short term (to their companies specifically). Investment in CSR is a short-term issue, whereas payback from the investment may (possibly) be well into the future, although this is no different from other business investment, except for the uncertain payback and timescale.

The stakeholder dimension of CSR

. The groups included shareholders, directors and top manage-ment, staff, staff representative bodies (e.g. trade unions), suppliers (of materials, services, equipment, etc.), regulators (e.g. financial regulators), government (local, national, regional), lobby groups (e.g. environmental lobby groups), and society in general. In Chapter 16 we took this idea further in the context of project management (although the ideas work through-out operations management) and examined how different stakeholders could be managed in different ways. However, two further points should be made here. The first is that a basic tenet of CSR is that a broad range of stakeholders should be considered when making busi-ness decisions. In effect, this means that purely economic criteria are insufficient for a socially acceptable outcome. The second is that such judgements are not straightforward. While the various stakeholder groups will obviously take different perspectives on decisions, their perspective is a function not only of their stakeholder classification, but also of their cultural background.

Q-8 Stakeholder?

Ans :- There are several definitions. The most common ones are:

Those groups without whose support the organization would cease to exist

Any group or individual who can affect or is affected by the achievement of the organization's objectives

We can see from these definitions that a lot of people can be a stakeholder

to an organisation. The most common groups who we consider to be

stakeholders include:

Managers ,Employees ,Customers,Investors ,Shareholders ,Suppliers , The environment

Then there are some more generic groups who are often included:

Government ,Society at large ,The local community

Q -8 (B) social responsibility of business.Ans:- i. Responsibility towards owners: Owners are the persons who own the business. They contribute capital and bear the business risks. The primary responsibilities of business towards its owners are to:b. Proper utilisation of capital and other resources. c. Growth and appreciation of capital. d. Regular and fair return on capital invested. e. Run the business efficiently.

ii. Responsibility towards investors: Investors are those who provide finance by way of investment in debentures, bonds, deposits etc. Banks, financial institutions, and investing public are all included in this category. The responsibilities of business towards its investors are : a. Ensuring safety of their investment, b. Regular payment of interest, c. Timely repayment of principal amount

iii. Responsibility towards employees ;Business needs employees or workers to work for it. These employees put their best effort for the benefit of the business. So it is the prime responsibility of every business to take care of the interest of their employees. If the employees are satisfied and efficient, then the only business can be successful. The responsibilities of business towards its employees include: a. Timely and regular payment of wages and salaries. b. Proper working conditions and welfare amenities. d. Opportunity for better career prospects. e. Job security as well as social security like facilities of provident fund, group insurance, pension, retirement benefits, etc. f. Better living conditions like housing, transport, canteen, crèches etc. g. Timely training and development

iv. Responsibility towards suppliers; Suppliers are businessmen who supply raw materials and other items required by manufacturers and traders. Certain suppliers, called distributors, supply finished products to the consumers. The responsibilities of business towards these suppliers are: a. Giving regular orders for purchase of goods. b. Dealing on fair terms and conditions. c. Availing reasonable credit period. d. Timely payment of dues.

v. Responsibility towards customers: No business can survive without the support of customers. As a part of the responsibility of business towards them the business should provide the following facilities: a. Products and services must be able to take care of the needs of the customers.

b. Products and services must be qualitative c. There must be regularity in supply of goods and services d. Price of the goods and services should be reasonable and affordable. e. All the advantages and disadvantages of the product as well as procedure to use the products must be informed do the customers. f. There must be proper after-sales service. g. Grievances of the consumers, if any, must be settled quickly. h. Unfair means like under weighing the product, adulteration, etc. must be avoided

vi. Responsibility towards competitors: Competitors are the other businessmen or organizations involved in a similar type of business. Existence of competition helps the business in becoming more dynamic and innovative so as to make itself better than its competitors. It also sometimes encourages the business to indulge in negative activities like resorting to unfair trade practices. The responsibilities of business towards its competitors arei. not to offer exceptionally high sales commission to distributers, agents etc. ii. ii. not to offer to customers heavy discounts and /or free products in every

sale. iii. iii. not to defame competitors through false or ambiguous advertisements.

vii. Responsibility towards government :Business activities are governed by the rules and regulations framed by the government. The various responsibilities of business towards government are: a. Setting up units as per guidelines of government b. Payment of fees, duties and taxes regularly as well as honestly. c. Not to indulge in monopolistic and restrictive trade practices. d. Conforming to pollution control norms set up by government. h. Not to indulge in corruption through bribing and other unlawful activities

viii. Responsibility towards society: A society consists of individuals, groups, organizations, families etc. They all are the members of the society. They interact with each other and are also dependent on each other in almost all activities. There exists a relationship among them, which may be direct or indirect. Business, being a part of the society, also maintains its relationship with all other members of the society. Thus, it has certain responsibilities towards society, which may be as follows: a. to help the weaker and backward sections of the society b. to preserve and promote social and cultural values c. to generate employment d. to protect the environment e. to conserve natural resources and wildlife f. to promote sports and culture g. to provide assistance in the field of developmental research on education, medical science, technology etc.

Q-9 what is bussines ethics ?Ans:- Business Ethics can be defined as the critical, structured examination of how people & institutions should behave in the world of commerce. In particular, it involves examining appropriate constraints on the pursuit of self-interest, or (for firms) profits, when the actions of individuals or firms affect others.

.CHAPTER 3

Q-10 types of costs?

Ans :-Cost: The total money, time, and resources associated with a purchase or activity.Fixed cost: Includes all costs that do not vary with activity for an accounting period.Variable cost: All other costs that are some function of activity.Total costs are usually expressed as Fixed + Variable Total Cost

Definition 1: In accounting, the sum of fixed costs, variable costs, and semi-variable costs. Definition 2: In the context of investments, the total amount spent on a particular investment, including the price of the investment itself, plus commissions, fees, other transaction costs, and taxes.

Direct cost: Costs that can be identified directly with a particular process, project, or program.Indirect cost: Costs associated with an enterprise, activity, etc. which are not identified as direct costs, but which may be included in the accounting.Marginal Cost: The cost associated with one additional unit of production or use, also called incremental cost.

CAPITAL BUDGETING

Capital budgeting is the process of analysing potential projects, and one of the most important decisions which managers make. Investment appraisal – the process of appraising the potential investment projects. Assessment of the level of expected returns earned for the level of expenditure made. Estimates of future costs and benefits over the project’s life.Investment Appraisal Techniques

1. net present value method 2. accounting rate of return method

3. payback method 4. internal rate of return method

1 Net Present Value :

It is the primary capital budgeting decision criterion. NPV is used to rank and

evaluate investment options, and estimate how much wealth to the stockholders a

prospective investment will attain. NPV equals the net cash flow's present value in

future, discounted at the cost of capital. (Birgham and Houston, 2013).

Moreover, the NPV is the difference between the market value and the cost of an

investments. (Ross, et al., 2006).

1.1. Advantages

1.1.1. It is the most powerful appraisal technique.

1.1.2. The time value of money is considered.

1.1.3. It helps in maximizing the shareholders wealth.

1.1.4. Its analysis are based on cash flow.

1.1.5. Risk is considered through the discounting process.

1.2. Disadvantages

1.2.1. It is of complex calculations, and difficult to understand.

1.2.2. Difficult to identify the discount rate which is key element in determining

present values.

1.2.3. It does not suit projects of different effective lives.

1.3. Accept/Reject criteria

If NPV is positive (high return), the project is accepted. Furthermore, the project

is accepted, if the present value of cash inflows exceeds that value of cash

outflows, and vice-versa. (Paramasivan and Subramanian, 2009).

2 Payback Period

Payback period method is defined as the number of years required to retrieve the

initial investment, in other words, time needed to recover the cost of a project from

operating cash flows. The calculation begins with the cost, and then add each year

cash inflow till the accumulative cash flow becomes positive. The duration of

payback is the duration before full recapture plus a fraction equals the shortfall at that

duration's end divided by the cash flow throughout the full recapture duration.

(Brigham and Houston, 2007).

3.1. Advantages

3.1.1. Simple to calculate and easy to understand.

3.1.2. It adds some improvements over the accounting rate of return.

3.1.3. Payback reduces the possibility of loss on account of obsolescence

(Paramasivan and Subramanian, 2009).

3.2. Disadvantages

3.2.1. Time value of money is abandoned.

3.2.2. Cash inflows post the payback period are not considered

3.2.3. It is deemed one of the misleading methods of capital budgeting

evaluation (Paramasivan and Subramanian, 2009).

3.3. Accept /Reject criteria

3.3.1. If the actual payback period is longer than the predetermined payback

period, the project is rejected, and vice-versa (Paramasivan and

Subramanian, 2009).

3.3.2. When comparing between several mutually exclusive projects, their rating

is based on the speed of payback where the faster payback the better (Lumby

and Jons, 2001).

3 Internal Rate of Return

IRR is the discount rate at which project NPV equals zero.

"Managers frequently ask: 'What rate of return am I getting on my investment?' To

calculate the correct return or yield requires us to find the rate that equates the present

value of future benefits to the initial cash outlay."

(Pike and Neale, 2006, p. 125).

4.1. Advantages

4.1.1. IRR is based on percentage rate of return and cash flow to assess an

investment with the consideration of the time value of money over the

project life

4.1.2. It considers the risk of project.

4.1.3. When discount rate is anonymous, it is not true using the IRR in deciding

whether or not to take the project, even though is true for IRR calculation

which is considered merit.

(Damodaran, 2011), (Paramasivan and Subramanian, 2009).

Disadvantages

4.2.1. Difficult to calculate without computer.

4.2.2. The decision process could be muddled, as IRR generates multiple rates.

4.2.3. Its calculation takes long time by changing the discount rate using 'trial

and error'.

4.2.4. Projects can be incorrectly evaluated in case of non-standard cash flows.

(Damodaran, 2011), (Paramasivan and Subramanian, 2009).

Accept /Reject Criteria

4.3.1. Project is acceptable if IRR is equal or more than the cost of capital.

However, if IRR is greater than the cost of the project capital by an

amount, this amount runs to the company shareholders. Vice-versa, if the

cost of capital is greater than IRR, the stock-market price of company's

share would be less, unless the shareholders intervene to make-up this

shortage (Brigham and Houston, 2007).

4.3.2. When choosing between projects of equivalent risk, the project with higher

IRR is better (Damodaran, 2011).

CHAPTER 4

Q-11 define enterprenuar and function and characterisite of it.

Ans:- Entrepreneur:- an entrepreneur can be defined as a person who tries to create something new, organizes production and undertakes risks and handles economic uncertainty involved in enterprise.

Function of Entreprenuer:

An Entrepreneur has to perform a number of functions right from the generation of idea up to the establishment of an enterprise. He also has to perform functions for successful running of his enterprise. Entrepreneur has to perceive business oppor-tunities and mobilize resources like man, money, machines, materials and methods. The following are the main functions of an Entrepreneur.

1. Idea generation: The first and the most important function of an Entre-preneur is idea generation. Idea generation implies product selection and project identification. Idea generation is possible through vision, insight, keen observation, education, experience and exposure. This needs scanning of business environment and market survey.

2. Determination of business objectives: Entrepreneur has to state and lay down the business objectives. Objectives should be spelt out in clear terms. The Entrepreneur must be clear about the nature and type of business, i.e. whether manufacturing concern or service oriented unit or a trading business so that he can very well carry on the venture in accordance with the objectives determined by him.

3. Rising of funds: All the activities of the business depend upon the finance and hence fund rising is an important function of an Entrepreneur. An Entrepreneur can raise the fund from internal source as well as external source. He should be aware of different sources of funds. He should also have complete knowledge of government sponsored schemes such as PMRY, SASY, REAP etc. in which he can get government assistance in the form of seed capital, fixed and working capital for his business.

4. Procurement of machines and materials: Another important function of an Entrepreneur is to procure raw materials and machines. Entrepreneur has to identify cheap and regular sources of raw materials which will help him to

reduce the cost of production and face competition boldly. While procuring machineries he should specify the technical details and the capacity. He should consider the warranty, after sales service facilities etc before procuring machineries.

5. Market research: Market research is the systematic collection of data regarding the product which the Entrepreneur wants to manufacture. Entrepreneur has to undertake market research persistently to know the details of the intending product, i.e. the demand for the product, size of the market/customers, the supply of the product, competition, the price of the product etc.

6. Determining form of enterprise: Entrepreneur has to determine form of enterprise depending upon the nature of the product, volume of investment etc. The forms of ownership are sole proprietorship, partnership, Joint Stock .Company, co-operative society etc. Determination of ownership right is essential on the part of the entrepreneur to acquire legal title to assets.

7. Recruitment of manpower: To carry out this function an Entrepreneur has to perform the following activities. (a) Estimating man power requirement for short term and long term. (b) Laying down the selection procedure. (c) Designing scheme of compensation. (d) Laying down the service rules. (e) Designing mechanism for training and development.

8. Implementation of the project: Entrepreneur has to develop schedule and action plan for the implementation of the project. The project must be implemented in a time bound manner. All the activities from the conception stage to the commissioning stage are to be accomplished by him in accordance with the implementation schedule to avoid cost and time overrun. He has to organize various resources and coordinate various activities. This implementation of the project is an important function of the Entrepreneur.

All the above functions of the Entrepreneur can precisely be put into three categories of innovation, risk bearing, and organizing and managing functions.

CHARACTERISTICS OF ENTREPRENEUR :-

An entrepreneur is a highly achievement oriented, enthusiastic and energetic individual. He is a business leader. He has the following characteristic:

1) An entrepreneur brings about change in the society. He is a catalyst of change.2) Entrepreneur is action-oriented, highly motivated individual who takes risk to

achieve goals.3) Entrepreneur accepts responsibilities with enthusiasm and endurance.

4) Entrepreneur is thinker and doer, planner and worker.5) Entrepreneur can foresee the future, seize market with a salesman’s persuasiveness,

manipulate funds with financial talent and smell error, frauds and deficiencies with an auditor’s precisions.

6) Entrepreneur undertakes venture not for his personal gain alone but for the benefit of consumers, government and the society as well.

7) Entrepreneur builds new enterprises. He possesses intense level of determination and a desire to overcome hurdles and solves the problem and completes the job.

8) Entrepreneur finds the resources required to exploit opportunities.9) Entrepreneur does extraordinary things as a function of vision, hard work, and

passion. He challenges assumptions and breaks rules.10) Although many people come up with great business ideas, most of them never act on

their ideas.

NATURE AND CHARACTERISTICS OF ENTREPRENEURSHIP:

Features of entrepreneurship are summarized as follows:

1) It is a function of innovation.

2) It is a function of leadership.

3) It is an organization building function.

4) It is a function of high achievement.

5) It involves creation and operation of an enterprise.

6) It is concerned with unique combinations of resources that make existing methods or products obsolete.

7) It is concerned with employing, managing, and developing the factors of production.

8) It is a process of creating value for customers by exploiting untapped opportunities.

9) It is a strong and positive orientation towards growth in sales, income, assets, and employment.

RISKS INVOLVED WITH ENTREPRENEURSHIP:

Entrepreneurship involves the following types of risks.

1) FINANCIAL RISK: The entrepreneurship has to invest money in the enterprise on the expectation of getting in return sufficient profits along with the investment. He may get attractive income or he may get only limited income. Sometimes he may incur losses.

2) PERSONAL RISK: Starting a new venture uses much of the entrepreneur’s energy and time .He or she has to sacrifice the pleasures attached to family and social life.

3) CARRIER RISK: This risk may be caused by a number of reasons such as leaving a successful career to start a new business or the potential of failure causing damage to professional reputation.

4) PSYCHOLOGICAL RISK: Psychological risk is the mental agonies an entrepreneur bears while organizing and running a business venturesome entrepreneurs who have suffered financial catastrophes have been unable to bounce back.

QUALITIES OF A SUCCESSFUL ENTREPRENEUR:

In order to organize and run it successfully, the entrepreneur must possess some qualities and traits. They are as following:

1) Willingness to Make Sacrifices and Assume Risks: - A new venture is full of difficulties and unanticipated problems. In such an inhospitable environment entrepreneur has to be prepared to sacrifice his time, energy and resources in order to carry out the venture and make it success.

2) Hard Work: - Willingness to work hard distinguishes a successful entrepreneur from an unsuccessful one. For example, Assim Premji (chairman of Wipro) works in his office fourteen hours every day. He is a successful entrepreneur. He is one of the richest persons in India.

3) Optimism: - Successful entrepreneurs are not worried by the present problems that they

face. They are optimistic about the future. This enhances their confidence and drives them towards success. Some of the world’s greatest entrepreneurs failed before they finally succeeded.

4) Self Confidence: - This is the greatest asset of a successful entrepreneur. He must have the confidence to make choices alone and bounce back when he fails.

5) Leadership: - Successful entrepreneur generally has strong leadership qualities. He should be a good judge of human nature and a good leader. He must be able to select, train and develop persons who can properly manage and control the labour force. McClelland identified two main characteristics in an entrepreneur- (1) Doing things in a new and better manner. (2) Decision making under uncertainty. A successful entrepreneur must be capable and well-informed, a successful leader of men, a keen judge of things, courageous and prudent. Above all he must be gifted with a large measure of practical common sense. There are not many Fords, Tatas, Birlas, Thapars and Ambanis in the world. Entrepreneurship is not limited to any class, community or religion. There is no age bar, for any person who possesses certain behavioural traits and attitudes can work to become an entrepreneur.

Q- 12 Difference bet Entrepreneur and manager

Often the two terms namely entrepreneur and manager are considered as synonym. However the two give different meaning. The major points of distinction between the two are presented in table 5.2.

Table 5.2: Distinction between entrepreneur and manager

Points Entrepreneur Manager

1. Motive The main motive of an entrepreneur is to Main motive of a manager is tostart a venture for his personal gratification. render services in an enterprise

already set by someone else.

2.Status Owner Servant

3.Risk Assumes risk and uncertainty Manager does not bear any riskinvolved in enterprise.

4.Rewards Profits, which are highly uncertain and not Salary which is certain and fixed.fixed.

5.Innovation Entrepreneur himself thinks over what and A manager simply executes planshow to produce goods to meet the changing prepared by the entrepreneur.needs of the customers. Hence he acts asinnovator / change agent.

6.Qualification An entrepreneur needs to possess qualities A manager needs to possess distinctand qualifications like high achievement qualifications in terms of soundmotive, originality in thinking, foresight, risk- knowledge in management theorybearing ability etc. and practice.

Rewards for an Entrepreneur1. Freedom to work. 2. Satisfaction of being own boss. 3. Power to do things as he likes.

4. Rewards of ownership and retirement assurance. 5. Respect of family and friends.

Penalties for an Entrepreneur1. Constraints of financiers, laborers, customers, suppliers, and debtors curtail his

freedom. 2. Frustration due to availability of limited capital and other resources. 3. Social and family life is affected due to hard long hours of working. 4. Frustration due to non-achievement of full objectives. 5. Risk of failure.

TYPES OF ENTREPRENEUR :

Entrepreneurs may be classified in a number of ways.

A. ON THE BASIS OF TYPE OF BUSINESS.Entrepreneurs are classified into different types. They are

1) Business Entrepreneur: He is an individual who discovers an idea to start a business and then builds a business to give birth to his idea.

2).Trading Entrepreneur: He is an entrepreneur who undertakes trading activity i.e; buying and selling manufactured goods.

3) Industrial Entrepreneur: He is an entrepreneur who undertakes manufacturing

activities.

4) Corporate Entrepreneur: He is a person who demonstrates his innovative skill in organizing and managing a corporate undertaking.

5) Agricultural Entrepreneur: They are entrepreneurs who undertake agricultural activities such as raising and marketing of crops, fertilizers and other imputs of agriculture. They are called agripreneurs.

B. ON THE BASIS OF USE OF TECHNOLOGY: Entrepreneurs are of the following types.

1) Technical Entrepreneur: They are extremely task oriented. They are of craftsman type. They develop new and improved quality goods because of their craftmanship. They concentrate more on production than on marketing.

2) Non-Technical Entrepreneur: These entrepreneurs are not concerned with the technical aspects of the product. They develop marketing techniques and distribution strategies to promote their business. Thus they concentrate more on marketing aspects.

3) Professional Entrepreneur: He is an entrepreneur who starts a business unit but does not carry on the business for long period. He sells out the running business and starts another venture.

C. ON THE BASIS OF MOTIVATION:Entrepreneurs are of the following types:

1) Pure Entrepreneur: They believe in their own performance while undertaking business activities. They undertake business ventures for their personal satisfaction, status and ego. They are guided by the motive of profit. For example, Dhirubhai Ambani of Reliance Group.

2) Induced Entrepreneur: He is induced to take up an entrepreneurial activity with a view to avail some benefits from the government. These benefits are in the form of assistance, incentives, subsidies, concessions and infrastructures.

3) Motivated Entrepreneur: These entrepreneurs are motivated by the desire to make use of their technical and professional expertise and skills. They are motivated by the desire for self-fulfillment.

4) Spontaneous Entrepreneur: They are motivated by their desire for self-employment and to achieve or prove their excellence in job performance. They are natural entrepreneurs.

D. ON THE BASIS OF STAGES OF DEVELOPMENT: They may be classified into;

1) First Generation Entrepreneur: He is one who starts an industrial unit by means of his own innovative ideas and skills. He is essentially an innovator. He is also called new entrepreneur.

2) Modern Entrepreneur: He is an entrepreneur who undertakes those ventures which suit the modern marketing needs.

3) Classical Entrepreneur: He is one who develops a self supporting venture for the satisfaction of customers’ needs. He is a stereo type or traditional entrepreneur.

E. CLASSIFICATION ON THE BASIS OF ENTREPRENEURIAL ACTIVITY: They are classified as follows:

1) Novice: A novice is someone who has started his/her first entrepreneurial venture.

2) Serial Entrepreneur: A serial entrepreneur is someone who is devoted to one venture at a time but ultimately starts many. He repeatedly starts businesses and grows them to a sustainable size and then sells them off.

3) Portfolio Entrepreneurs: A portfolio entrepreneur starts and runs a number of businesses at the same time. It may be a strategy of spreading risk or it may be that the entrepreneur is simultaneously excited by a variety of opportunities.

F. CLASSIFICATION BY CLARENCE DANHOF: Clarence Danhof, On the basis of American agriculture, classified entrepreneurs in the following categories:

1) Innovative Entrepreneurs: They are generally aggressive on experimentation and cleverly put attractive possibilities into practice. An innovative entrepreneur, introduces new goods,inaugurates new methods of production, discovers new markets and reorganizes the enterprise. Innovative entrepreneurs bring about a transformation in lifestyle and are always interested in introducing innovations.

2) Adoptive Or Imitative Entrepreneurs: Imitative entrepreneurs do not innovate the changes themselves, they only imitate techniques and technology innovated by others. They copy and learn from the innovating entrepreneurs. While innovating entrepreneurs are creative, imitative entrepreneurs are adoptive.

3) Fabian Entrepreneurs: These entrepreneurs are traditionally bounded. They would be cautious. They neither introduce new changes nor adopt new methods innovated by others entrepreneurs. They are shy and lazy. They try to follow the footsteps of their predecessors. They follow old customs, traditions, sentiments etc. They take up new projects only when it is necessary to do so.

4) Drone Entrepreneurs: Drone entrepreneurs are those who refuse to adopt and use opportunities to make changes in production. They would not change the method of production already introduced. They follow the traditional method of production. They may even suffer losses but they are not ready to make changes in their existing production methods.

Q-13 ROLE OF ENTREPRENEURSHIP IN ECONOMIC DEVELOPMENT

Economic development essentially means a process of upward change whereby the real per capita income of a country increases for a long period of time. The economic history of the presently developed countries, for example, USA and Japan tends to support the facts that the economy is an effect for which the entrepreneurship is the cause. The crucial role played by the entrepreneurs in the western countries has made the people of underdeveloped countries conscious of the significance of entrepreneurship in economic development. After the Independence, India has realized that, for achieving the goal of economic development, it is necessary to increase the entrepreneurship both qualitatively and quantitatively in the country. Parson and Smelter described entrepreneurship as one of the two necessary conditions for economic development, the other being increased output of capital. Y.A. Say high describes entrepreneurship as a necessary dynamic force for economic development. The important role that an entrepreneurship plays in the economic development of an economy can be put in a more systematic manner as follows.

1. Entrepreneurship promotes capital formation by mobilizing the idle saving of the public.

2. It provides immediate large-scale employment. Thus it helps to reduce unemployment in the country.

3. It provides balanced regional development. 4. It helps reduce the concentration of economic power. 5. It stimulates the equitable redistribution of wealth, income and even political

power in the interest of the country. 6. It encourages effective resources mobilization of capital and skill which might

otherwise remain unutilized and idle.7. It also induces backward and forward linkages which stimulated the process of

economic development in the country. 8. It promotes country’s export trade i.e. an important ingredient for economic

development.

BARRIERS TO ENTREPRENEURSHIP:

A large number of entrepreneurs particularly in the small enterprises fail due to several problems and barriers. The greatest barrier to entrepreneurship is the failure of success. Karl. H. Vesper has identified the following entrepreneurship barriers:

1. Lack of a viable concept 2. Lack of market knowledge 3. Lack of technical skills 4. Lack of seed capital 5. Lack of business know how 6. Complacency—lack of motivation 7. Social stigma 8. Time presence and distractions 9. Legal constraints and regulations

10. Monopoly and protectionism 11. Inhibitions due to patents

Q-15 Rural entrepreneurship and the problems to it development.

Ans:- Rural Entrepreneurship can be defined as entrepreneurship emerging at village level which can take place in a variety of fields of Endeavour such as business, industry, agriculture and acts as a potent factor for economic development”.

Classification of Rural Industries :-

All rural industries have been classified intothe following six categories:-1. Mineral-based industries.2. Forest-based industries.3. Agro-based industries.4. Engineering and non-conventional industries.5. Textile industry (including Khadi), and6. Service industry.

Problems faced by it:-

Developing rural entrepreneurship is important but notso easy. The general bottlenecks in the development of village industries are :

Financial constraints. Lack of technical know-how .Lack of training and extension services Management problems Lack of quality control. High cost of production due to high input cost. Lack of communication and market information. Poor quality of raw materials .Lack of storage and warehouses. Obsolete and primitive technology .Lack of promotional strategy.

Woman entrepreneurship :- Women Entrepreneur It may be defined as a woman or group of women who initiate,

organise and run a business enterprise.

Women who innovate initiate or adopt business actively are called women entrepreneurs.”

J. Schumpeter “Women entrepreneurship is based on women participation in equity and

employment of a business enterprise.” Ruhani j. alice

QUALITIES OF WOMEN ENTREPRENEURS :- Accept challenges Ambitious Hard work Patience

Motivator Adventurous Conscious Educated Intelligent

FUNCTIONS OF WOMEN ENTREPRENEUR :-

PROBLEMS OF WOMEN ENTREPRENEURS :-

planning organization

Decision making Risk bearing

innovation

REMEDIES TO SOLVE THE PROBLEMS:-

General problems

Problem of raw material

Problem of finance

Infrastructure problem

Marketing problem

Stiff competition

Problem specific to women

entrepreneur

Male dominated society

Low risk taking ability

Lack of education

Lack of business information

Family problems

MOTIVATIONAL NEEDS:-

Economic necessity Independence Education and qualification Family occupation Success stories of friends & relatives

.

Q-16 Essential of corporate report writing?

Defination:-

Corporate financial reporting is a series of activities that allows companies to record operating data and report accurate accounting statements at the end of each month and quarter.

Importance:-

Corporate financial reporting is an important function because it enables organizations to present accurate accounting statements

Finance cells

Markiting co-opratives

Supply of raw material

Education and awareness

Training facility

It helps firms conform to international financial reporting standards and U.S. generally accepted accounting principles.

Report types:-

Balance Sheet  A corporate balance sheet is also known as a statement of financial condition or statement of financial position. It provides information about a company's assets, liabilities and equity capital.

Income Statement  An organization's income statement is an important report on which investors, financial analysts and corporate business partners rely to measure a company's economic health.

Cash Flow Statement  A cash flow statement indicates liquidity movements within a company's operations. In other words, the report tells the tale of the company's cash payments and receipts over a period of time.

Equity Statement Also known as a statement of retained earnings, a corporate equity statement provides insight into the ownership of a company. In short, the report helps identify who owns the company.

How to Write a Corporate Report :- 1. Identify the audience for your report and its purpose. 2. Find out if your organization has a required format for corporate reports and use

it.3. Collect the data needed to write all sections of the report.4. Create a list of key points for each report section. 5. Draft each section of the report. 6. Write a summary or abstract and a conclusion. 7. Read the entire report for clarity and consistency

1. Ask someone to review the report for grammar and readability.2. Edit the corporate report using feedback from reviewers.

Users of corporate reports::-

Corporate report is relevant to the company's shareholders, whose concern is with profit figures

Also its important for auditors External users like banks