Managing Resource for Enterpreneurship

A

ldquoTERM PAPERrdquo

ON

ldquoManaging resources for entrepreneurshiprdquo

SUBMITTED IN PARTIAL FULFILLMENT OF

DEGREE OF

MASTER OF BUSINESS ADMINISTRATION

DEPARTMENT OF MANAGEMENT STUDIES

Faculty of Commerce and Management Studies

J N V University Jodhpur

Supervised by Submitted by

Dr (Mrs) Meeta Nihalani Swati Surana

MBA PhD MBA (Semester 4th)

CERTIFICATE

FACULTY OF COMMERCE AND MANAGEMENTJAI NARAIN VYAS UNIVERSITY JODHPUR

This is certifying that Term Paper titled


Has been satisfactorily completed by

MISS SWATI SURANA

As a partial fulfilment of Term Paper work for


During academic year 2007-2009


Dr (Mrs) Meeta Nihalani Swati SuranaMBA PhD MBA (Semester 4th)

ACKNOWLEDGEMENT

It gives me immense pleasure in submitting this term paper ldquoManaging

resources for entrepreneurshiprdquo I am grateful to Dr (Mrs) Meeta Nihalani

Head DMS JNVUniversity Jodhpur under whose guidance I have had privilege of

doing this dissertation work She took an active interest in my work and had an

encouraging influence over me She has been a ladder of inspiration with the concrete

support and strength without whom the term paper would not have been completed

MissSwati Surana

MBA (SEM-4th)

MANAGING RESOURCES FOR ENTREPRENEURSHIP

Table of Content

1) Introduction

2) Concept of Entrepreneurship

3) Resource Managed by Entrepreneur

4) Constraints faced by a Business

5) Land as resource managed by Entrepreneur

6) Innovation and Entrepreneurship

7) Capital management

8) Demand and supply management

9) Managing Labour

10) Knowledge Management

11) Conclusion

12) Bibliography

Anything

Introduction

ldquoYour time is limited so donrsquot waste it living someone elsersquos life Donrsquot be trapped by dogma - which is living with the results of other peoplersquos thinking Donrsquot let the noise of otherrsquos opinions drown out your own inner voice And most important have the courage to follow your heart and intuition They somehow already know what you truly want to become Everything else is secondaryrdquo Steve Jobs co-founder of Apple and Pixar

One question wersquove all been asked is ldquoWhat do you want to be when you grow uprdquo Many times our answer to this question involves positions or careers in which we work for other people Have you ever considered a career in which you are your own boss This kind of career is known as entrepreneurship An entrepreneur organizes and runs a business that is appealing to his or her own interests and abilities Because we live in a free enterprise system or free market system in the India we as individuals can establish our own businesses and compete in the market economy

Entrepreneurship the word has 3 components

ldquoSize does not guarantee survival in business Even large firms can disappear or get eaten up by other firms Millions of small firms close down each year It is the spirit of entrepreneur which keeps the business

Entre EnterPre BeforeNeur Nerve

Center

The Concept of Entrepreneurship

Entrepreneurship is a process undertaken by an entrepreneur to augment his business interests It is an exercise involving innovation and creativity that leads towards establishing hisher enterprise One of the qualities of entrepreneurship is the ability to discover an investment opportunity and to organise an enterprise thereby contributing to real economic growth It involves taking of risks and making the necessary investments under conditions of uncertainty and innovating planning and taking decisions so as to increase production in agriculture business industry etc

Entrepreneurship is a composite skill the resultant of a mix of many qualities and traits ndash these include tangible factors as imagination readiness to take risks ability to bring together and put to use other factors of production capital labour land as also intangible factors such as the ability to mobilise scientific and technological advances

A practical approach is necessary to implement and manage a project by securing the required licences approvals and finance from governmental and financial agencies The personal incentive is to make profits from the successful management of the project A sense of cost consciousness is even more necessary for the long-term success of the enterprise However both are different sides of the same coin

Entrepreneurship lies more in the ability to minimise the use of resources and to put them to_ maximum advantage Without an awareness of quality and desire for excellence consumer acceptance cannot be achieved and sustained Above all entrepreneurship today is the product of teamwork and the ability to create build and work as a team The entrepreneur is the maestro of the business orchestra wielding his baton to which the band is played

Definition of entrepreneurship

Entrepreneur Entrepreneurship Enterprise

Person Process of action Object

ldquoThe entrepreneur shifts economic resources out of an area of lower and into an area of higher productivity and greater yieldrdquo Jean Bapiste Say (19th Century Economist)

ldquoThe function of entrepreneurs is to reform or revolutionize the patterns of production By exploiting an invention or more generally an untried technological possibility for producing a new commodity or producing an old one in a new way by opening up a new source of supply of materials or a new outlet for products by reorganizing an industry and so onrdquo

Joseph Schumpeter (20th Century Economist)

ldquoThe entrepreneur always searches for change responds to it and exploits it as an opportunityrdquo

Peter Drucker (Management Guru

Who is an Entrepreneur

An entrepreneur is a person who organizes and manages a business undertaking and assumes a risk for the sake of profit Operating a business takes certain skills Few people have all the skills needed to run a business but they can compensate for their weaknesses by hiring staff or consultants and by becoming more knowledgeable through education or training

Resource managed by Entrepreneur

You can assess your business skills by evaluating past jobs volunteer work positions in organizations and personal traits Consider your experiences and qualifications under each of the following headings

1 Organization and planning setting and attaining goals managing time commitments and keeping work schedules

2 Handling money determining budgets securing loans raising funds keeping financial records and completing income tax forms

3 Selling ideas and products determining sales quotas and projections presenting projects for committees organizations andor administrative groups direct selling to customers or clientele handling criticism and rejection

4 Management experience in managing all or part of a small business or an agency serving as director or major officer of an organization

5 Working with people mediating or arbitrating between people with opposing views when the situation requires organizing and planning large public events

assuming officer or executive secretary positions in an organization andor handling complaints for an organization or company getting along well with most people

6 Ability to take risks taking moderate calculated risks in varied situations (situations where the chance of winning was not so small as to be a ldquogamblerdquo or so large as to be a ldquosure thingrdquo situations where there was a reasonable and challenging chance of success)

7 Willingness to lead and to work alone being self-disciplined handling situations which were ambiguous and full of uncertainty as to the job requirements working calmly and efficiently in the midst of an emergency or crisis

8 Personality traits taking the initiative in situations requiring it accepting and accomplishing more than your share of the work willingness to work hard even if the financial rewards are slow in coming establishing high standards of performance and raising them once they are met

9 Knowledge of products andor skills in the service offered by your business or in producing your product willingness to do self-study research and planning to improve business operations

New Concept of Entrepreneur

ldquoThe critical ingredient is getting off your butt and doing something Itrsquos as simple as that A lot of people have ideas but there are few who decide to do something about them now Not tomorrow Not next week But today The true entrepreneur is a doer not a dreamerrdquo Nolan Bushnell founder of Atari amp Chuck E Cheesersquos

The term ldquoentrepreneurrdquo has been defined as one who detects and evaluates a new situation in his environment and directs the making of such adjustments in the economic systems as he deems necessary He conceives of an industrial enterprise for the purpose displays considerable initiative grit and determination in bringing his project to fruition and in this process performs one or more of the following

i Perceives opportunities for profitable investments

ii Explores the prospects of starting such a manufacturing enterprise

iii Obtains necessary industrial licenses

iv Arranges initial capital

v Provides personal guarantees to the financial institutions

vi Promises to meet the shortfalls in the capital

vii Supplies technical know-how

Entrepreneurship is the propensity of mind to calculate risks with confidence to achieve a pre-determined business or industrial Objective In substance it is the risk-taking ability of the individual broadly coupled with correct decision--making

Characteristics of Entrepreneurs

1 Mental Ability ndash

It consists of intelligence and creative thinking Entrepreneur must be reasonably intelligent and should have creative thinking and must be able to engage in the analysis of various problems and situations in order to deal with them

2 Clear Objectives ndash

An entrepreneur should have a clear objective as to the exact nature of the business the nature of the goods to be produced and subsidiary activities to be undertaken

3 Business Secrecy ndash An entrepreneur must be able to guard business secrets Leakage of business secrets to trade competitors is a serious matter which should be carefully guarded against by an entrepreneur An entrepreneur should be able to make a proper selection of his assistants

4 Human Relation Ability ndash

The most important personality factors contributing to the success of an entrepreneur are emotional stability personal relations consideration and tactfulness An entrepreneur must maintain good relation with his customers if he is to establish relations that will encourage them to continue to patronize his business He must also maintain good relations with his employees if he is to motivate them to perform their jobs at a high level of efficiency

5 Communication Ability ndash

It is the ability to communicate effectively Good communication also means that both the sender and the receiver understand each other and are being understood An entrepreneur who can effectively communicate with customers employees suppliers and creditors will be more likely to succeed than the entrepreneur who does not

Constraints faced by a Business

Technology constraints

Technology is any method of producing a good or service Technology advances over time Using the available technology the firm can produce more only if it hires more resources which will increase its costs and limit the profit of additional output

Information constraints

A lack of information is called uncertainty It occurs because the collection of information has an important alternative cost Thatrsquos why a firm never possesses complete information about the quality and effort of its work force current and future buying plans of its customers and the plans of its competitors The cost of coping with limited information limits profit

Market constraints

What a firm can sell and the price it can obtain are constrained by its customersrsquo willingness to pay and by the prices and marketing efforts of other firms The resources that a firm can buy and the prices it must pay for them are limited by the willingness of people to work for and invest in the firm The expenditures a firm incurs to overcome these market constraints will limit the profit the firm can make

These are of the few constraints which are discussed here But there are many constraints faced by an enterprise in day to day working of an organization and initial set-up of enterprise The production is possible due to the cooperation of the various factors of production popularly known as land labour capital market management and of course entrepreneurship To produce goods and services requires resourcesEconomic resources are scarce relative to the infinite needs and wants of people and businesses operating in the economy It is important to use these resources efficiently in order to maximise the output that can be produced from them

RESOURCE MANAGED BY ENTREPRISE

Land

CAPITAL knowledge

LABOUR technology

Innovation

Land as resource managed by entrepreneur

ldquoLand is one time investment and its cost whether purchased or taken on rent are huge So an entrepreneur should be very alert will making decision about location of enterprise as success of firm largely depends on the landlocationrdquo

Land is the natural resources available for production Some nations are endowed with natural resources and exploit this by specialising in the extraction and production of these resources - for example - the development of the North Sea Oil and Gas Only one major resource is for the most part free - the air we breathe The rest are scarce because there are not enough natural resources in the world to satisfy the demands of consumers and producers Air is classified as a free good since consumption by one person does not reduce the air available for others - a free good does not have an opportunity

The factory or plant is an individual building or premises that produce manufactured goods A company may own several factories probably in different locations The industry comprises many factories or plants and a number of independent companies

Industrial location is primarily concerned with the sitting of a single factory rather than the whole industry although the location of the industry is in itself a locational factor The concepts of site and situation play separate roles although we may use the word site in relation to location when we are really looking at the situation of the factory The site of a factory or group of factories is the actual physical location or block of land These are some basic location information an entrepreneur should look in before setting up of enterprise

plentiful supply of flat land access to transport power and water availability of labour and Capital and finance facilities Fertility of land if enterprise is related to agriculture Nearness to the market for fast consumable products

Need for enterprise location

The need for plant location arises under the following circumstances

1 When a new enterprise is to be established

2 In the case of established enterprise the need for enterprise location arises when expansion decentralization and diversification is undertaken to meet the increased demand for its products

3 Whenever the existing factory is not in a position to obtain renewal of lease

4 When an undesirable location is to be abandoned

5 When the tendency of shifting the market depletion of raw materials changes in transportation facilities new processes requiring a different location are observed in a factory

6 When a new branch or branches are to be opened for increasing the volume of production or distribution or both

Innovation and entrepreneurship

If you can imagine it you can do it ndash Walt Disney

ldquoThe important thing is not being afraid to take a chance Remember the greatest failure is to not tryrdquo

-Debbi Fields founder of Mrs Fields Cookies

All of us have shown the qualities of innovative thinking and entrepreneurship in some sphere of activity or the other be it in our personal life or professional domain mdash whether in handling a medical crisis at home or a major social event in the family These are all small instances of entrepreneurship which lead to value addition in whatever sphere of activity that they have manifested themselves in

Most of the fascinating instances of innovation and entrepreneurship can be viewed from an entirely commonsense point of view

How many of us knew that Scotsman Dunloprsquos first tyre was not only inspired by the flexibility of a garden hose it was a piece of garden hose wrapped around a wheel Two major innovations mdash chain drive mechanism and rubber pneumatic tyre mdash towards the end of the nineteenth century gave us the modern bicycle

Human imagination has no boundaries and indeed human civilization has been driven forward down the ages through human ingenuity mdash through discoveries inventions and innovations

A Swiss engineer Georges de Mestral was trying to discover a better fastener for clothes After walking in the woods one day he noticed burrs sticking to his clothes Using a magnifying glass he found that tiny barbs from plants had hooked onto the threads of the fabric he was wearing After eight years of experimenting he designed two pieces of fabric one with tiny hooks the other with tiny loops which would adhere when touched but could be ripped apart Velcro was patented in 1957

In the real world of the economic political and corporate market place that we live and earn our living in homegrown instances of entrepreneurship are presented with new challenges even as they offer new opportunities with new vistas opening up thanks to technological evolution of the world around us

Innovation Defined

Innovation is a process of taking new ideas through to satisfied customers It is the conversion of new knowledge into new products and services Innovation is about creating value and increasing efficiency and therefore growing your business It is a

spark that keeps organizations and people moving ever onward and upward Without innovation new products new services and new ways of doing business would never emerge and most organizations would be forever stuck doing the same old things the same old way

In the 21st century itrsquos the very nature of innovation that has changed itrsquos happening faster itrsquos more open and collaborative and outdated concepts around tightly controlled intellectual property are giving way to a more enlightened emphasis on sharing intellectual capital

For most of us as technologists engineers and scientists thatrsquos why itrsquos exciting as well as a great challenge to be a part of the current wave of innovation mdash because in todayrsquos world technology is leading human evolution

This brings us to the elemental question mdash can we define innovation

Innovation mdash a multi layered concept

Innovation is not just breakthroughs in space science cloned animal farms or satellite communication It can be more modest incremental mdash just better than the previous alternative mdash a better value proposition

The process of innovation has been around for a long time In fact its part of the evolution processes itself mdash not just the evolution of technology or the evolution of business mdash but the evolution of humanity

In some ways at the dawn of the human civilization the ability to create and control fire was a massive innovation It transformed human beings into social creatures And this probably happened as most innovations do because one individual chose to look at a problem differently than everyone else

If we look around us we would find myriad examples from the mundane safety pins and bicycles on the one end of the spectrum to the very hi-tech nanotubes composites aerospace sciences technology convergence in telecommunication etc

Innovation mdash key drivers

Innovation consists in the purposeful and organised search for changes and essentially means monitoring certain resources for innovative opportunity mdash both within and outside of the enterprise business

A creative idea that can enhance the quality of life can bring to the people hitherto unforeseen benefits and a fulfilment of a need

1 Market need

It is important to understand that the ultimate objective of innovations is not to establish technological superiority The underlying objective of any innovation is

maximisation of returns on a constrained resource by improving products and processes and creating a market for it

In the 1920s Charles Birdseye was puzzled with the problem of keeping frozen meat from becoming damaged by the cells becoming punctured by slow forming ice crystals During a trip to Labrador Birdseye watched how native people froze fish quickly He developed a fast freezing process that reduced crystal formation and started selling small packages of frozen vegetables that still bear his name

Consider what convergence of technology has done An example is the iPod mdash a pocket-sized ultra-light hard-drive-based device that includes technical specifications video clips interactive demo and availability information A wide range of features in an iPod makes it more attractive compared to an MP3 player for example greater memory capacity and extra features Accessories used in the iPod can convert it from a mobile CD player to a video player photo album and much more

Strategic Innovations

Small changes but dramatic impact on competitionRequires different business models

Small cars small cameras

Incremental Innovations

Extend current proposition facing consumersMinor changes Build upon existing competencies amp

assets

Fog Lights

Radical Innovations

Disruptive effect on customers amp producersBased on different set of scientific principles than prevailing set Create new markets demand new consumer behaviours Car

Major Innovations

Fundamental changes in consumer behaviourChampioned by established competitors

Speed cameras Online banking

Types of Innovation and their Effects in the Market

Major

Minor

Effec

t of I

nnov

atio

n on

Con

sum

er H

abits

and

Beh

avio

urs

Enhances Destroys

Effect of Innovation on Established Firmsrsquo Competencies amp Complementary Assets

On a different plane in the field of education the mode of imparting education has undergone a revolutionary change and therersquos a clamour for implementing distance-learning programmes by world-renowned colleges and universities due to three major reasons

The convergence of communication and computing technologies

The need for information age workers to acquire new skills without interrupting their working lives for extended periods of time

The need to reduce the cost of education

More importantly the outreach is enhanced by technology

2 Economic growth

In a number of countries today innovation has become one of the key factors propelling economic growth and enhancing social benefits

According to the Growth theory by Robert Solow technological progress and innovation is the greatest engine of economic growth Recent studies indicate that technological progress is now responsible for up to half of the growth of the US economy

3 Leverage talent ndash human resources and knowledge management

Today we live in an era of such rapid change and evolution that leaders must work constantly to develop the capacity for continuous change and frequent adaptation They must recognise peoplersquos innate capacity to adapt and innovate

Technological innovation has become a major driver of progress Innovation relies on intangibles such as creativity knowledge and experience These intangibles are the most valuable resources of our time much as raw materials were during the early times of industrialisation

What if we can use augmented reality to see the world through someone elsersquos eyes What if we can use robotics and information systems to help an ageing population stay involved and independent There are a lot of possibilities

Forces that make innovation important in todayrsquos world

Need to increase the pace of innovation Research alliances between firms in highly innovative activities such as biotechnology

Need to improve the technological base Globalisation has made it necessary to project the innovative capabilities of nations regions industries and firms Innovation has become a major tool in the race to create jobs and increase incomes

Indicators of innovation may well be on the horizon and come to be used as regularly as those now published regularly to provide information on incomes population or public health

4 Creation of an unforeseen benefit mdash disruptive innovation

One of the important properties of innovation is that of lsquodiscontinuityrsquo and it can have

a deep social and economic impact Disruptive innovation means one needs to often deal with the unexpected like

Unforeseen changes in industry structure market structure etc Changes in demographics changes in perception and meaning New knowledge mdash scientific and non-scientific

Commonplace examples could be

Product Discontinuities

Typewriters Manual to electric to dedicated word processors to personal computers

Lighting Oil lamps to gas to incandescent lamps to fluorescent lamps to light emitting diodes

Imaging Daguerreotype to tin type to wet plate photography to dry plate to roll film to electronic imaging to digital electronic imaging

Technological discontinuities can dramatically change the future of a company often resulting in either loss of market share or in extreme circumstances bankruptcy

In the field of architecture mdash consider the arch till the Romans invented the arch manrsquos creations remained small This is because the materials used like wood or stone had limitations Yet man craved for creating taller buildings needed bridges over rivers and difficult terrains With the creation of the arch man was no longer a slave to the form Now the form was manrsquos domain Longer bridges bigger and taller buildings all came from this wondrous innovation

5 Strategic RampD

A great idea can only get us started In the changing global scenario and propelled market demand for newer and better products to stay at the leading edge and to compete with more dynamic industrial economies as well as the newly emerging economies there is a need for

Strong science and technological links with the best research in the world Incentives for knowledge transfer Business RampD High standards of education mdash imperatives of knowledge driven economy

According to a new global innovation study by Booz Allen Hamilton RampD productivity and not RampD investment is the real challenge for global innovation

Growing market competition not growing RampD spending is what drives innovation A successful innovation policy is a competition policy where companies see innovation as a cost-effective investment to differentiate themselves profitably

RampD spending by companies in developing nations is relatively small but growing rapidly While companies headquartered in North America Europe and Japan account for 968 per cent of the Global Innovation 1000rsquos RampD spending and are likely to remain dominant players for the foreseeable future companies with headquarters in China India and the rest of the world are turning up the volume on RampD investment

How do we acknowledge that everyone is a potential innovator How can we evoke the innate human need to innovate It is possible to create organisations full with people who are capable of adapting as needed to work with the innovative potential that exists in all of us and to engage that potential to solve meaningful problems

Sources of Innovation bull

bull The incongruity

bull Innovation based on process need

bull Changes in industry structure or market structure

bull Demographics

bull Changes in perception mood and meaning

bull New knowledge

bull Knowledge-base innovation

Global companies in pursuit of innovation

Innovation in business and businesses engaged in innovation will be the key Ideas and ideation will drive business and enhance quality of life for future generations

Here are some illustrative examples

MicrosoftThe ongoing innovation in their products helps them gain competitive advantage Things like the Windows Media Audio format for example which when it was introduced made big strides in compression and quality The Tablet PC has taken the older notion of pen computing and through new technologies for inking recognition and annotation has helped to create a new category

The Smart Personal Objects Technology (SPOT) represents a new way to think about bringing connected intelligence to everyday objects such as watches

MITThe Deshpande Center for Technological Innovation at MIT is engaged in

projects like growing human liver cells for drug testing and creating a new material for computer displays Grants are awarded for determining technical feasibility of breakthrough ideas

IBMBelieve in exploring new ways of working with an lsquoecosystem of innovatorsrsquo to solve societal challenges Some examples of innovations over the past fifty years are

1 Carbon nanotube technology 2 Chip technology 3 Magnetic disk storage 4 One-transistor dynamic RAM (DRAM)

SonyConsider the Walkman Akio Morita felt that individuals should enjoy the music of their choice anywhere anytime without disturbing others This innovation in personal audio systems set in to motion an incredible revolution in the entertainment sector mdash this enabled them to tap into a larger market

Innovation in Asia is on the rise technology being a great leveller

An interesting example is that of Vimicro The Chinese chip manufacturer holds some 400 patents and is the worldrsquos leading supplier of PC camera processor chips proof of Chinese innovation making a transition from manufactured in China to designed in China

Innovation involves experimentation and risk taking Risk of failure often justifies potentially high returns from successes that are an incentive to innovate in the first place Hence failures cannot and should not be a deterrent Take the example of the (American) General Electric Company it failed in computers but has been a successful innovator in three totally different fields mdash aircraft engines engineered inorganic plastics and medical electronics

What are the factors common to the success stories in innovation First and foremost we see that personal gain is not the prime driver of innovation What is the engine of innovation What is the prime mover The innovator can see what success can mean and he is passionate about his goal

Innovation and entrepreneurship mdash ideally must coexist

Entrepreneurship is essentially about people and their ability to evaluate new opportunity and to bring about a match between innovation and market needs

The French economist J B Say stated more than 200 hundred years ago that the entrepreneur shifts economic resources out of an area of lower and into an area of higher productivity and greater yield Be that as it may enterprise in todayrsquos competitive world and dynamic times represents something larger in terms the scale of the impact of the enterprise

Enterprise is perhaps what McDonalds have achieved They have taken advantage of the eating out habit used the traditional fare and achieved stupendous value addition mdash creating management tools for value creation for the customer across the country and international borders making the American style outdoor dining habit a global phenomenon This is undoubtedly entrepreneurship

The study lsquoThe Innovation-Entrepreneurship Nexusrsquo written by Advanced Research Technologies United States has demonstrated that mere innovation without entrepreneurship generally doesnrsquot lead to a remarkable economic impact The findings of the research indicated that entrepreneurship tended to be high in regions where innovation was high

Entrepreneurs can lead to a healthy linkage between inventors innovation and economic growth Economists say that besides focusing on economic development through the use of technology there is an urgent need to support entrepreneurs so that innovations can be translated into jobs and economic growth

India ndash imperatives for innovation and entrepreneurship

As Indian companies strive to become globally competitive on cost and quality the need is to recognise and pursue innovation as a tool for sustainable advantage in products processes business models organisations

Innovation in India could be seen in three distinct phases

1 Infrastructure build-up phase (1947 ndash 60s)

2 Re-orientation phase (1960 ndash 80s)

3 Market orientation phase (1990s onwards)

Post liberalisation in 1991 came the reality of intensified competition which meant that innovation had to be integrally woven into a firmrsquos strategy and had to derive and sustain competitiveness through innovation

India continues to spend less in comparison to that of the other developing countries like China Brazil and Korea (they all invest more than 1 per cent) A recent study shows that RampD expenditures by most developing countries is far lower than that of most developed countries

TATArsquoS as pioneers and entrepreneurs ndash an illustration

Creative thinking and foresight were demonstrated way back in the 19th century by the founding father of the Tata Group Jamsetji Tata He envisioned hydroelectric power as a clean source of energy hundred years on the world continues its debate on Kyoto protocol sustainable development and clean development mechanism

His concept of welfare and community development around a steel plant was far ahead of his times we all know how corporate social responsibility has been rapidly integrated in recent times into the corporate balance sheet of companies worldwide Tatas have nurtured innovative ideas and displayed entrepreneurial spirit in venturing into new geographies market segments and product areas

To cite some instances of innovative novel endeavours by the Tata Group

Tata Motors

An exciting project is the lsquopeoplersquos carrsquo which would sell for around $2200 (about Rs 1 lakh) A number of incremental innovations mark the project like the possible use of bolted or glued panels instead of welded bodies

Indigo mdash the first sedan designed and manufactured in India This technology (as is used the world over) allows Tata Motors to meet customer needs in different segments with a single base model

TitanEdge from Titan mdash the ultra slim wristwatch that is only 35mm thick and 30m water-resistant is a path-breaking design concept No other company selling mass produced watch is slimmer than this

Tata Steel

Developed low phosphorus steel from high phosphorus ore

Tata BP Solar

The sun sand and sea (water) are all inexhaustible sources of renewable and clean energy It will play a significant role in the years ahead in terms of innovative harnessing and applications for the benefit of the larger mankind

Conclusion

We are living in an era rife with challenges and complexities It is an era of development and competition the world is advancing towards informationisation gridification globalisation and knowledge driving

Technological innovation will expand fresh development space for humans in aerospace ocean deep earth virtual cyberspace etc Science ethics and science and technology development will bring man into a new stage of circular economy and sustainable development

Nevertheless man is facing new challenges Pressure from population resources ecology and environment is increasingly building while pushing forward the progress of human civilization Science and technology poses a challenge to human ethics as well

Organisations must be imbued with the entrepreneurial spirit wanting innovation actively promoting it considering it both a necessity and opportunity

Innovation is strongest in cultures where tinkering is not just allowed but encouraged In the eighteenth and nineteenth centuries the European countries were master innovators The twentieth century belonged to the innovators of America and Japan The twenty-first century has already been called the Asian century

Countries such as India are poised to become significant knowledge economies and must take on the challenge of looking at making innovations work in the context of developmental imperatives

However technology must be relevant affordable and innovative and necessarily multidisciplinary to grapple successfully with the problems of developing countries

Innovations will be the mainstay for societies to forge ahead and the level of our engagement in research and development activities coupled with appropriate applications in the frontier areas of nanotechnology healthcare and biotechnology material sciences alternative sources of energy will determine a nationrsquos place in the new global order

The world will always need innovators and innovations it is not a destination but an endless journey and the spirit of entrepreneurship will continue to be a great enabler

Capital Management

The term business finance refers to the assets liabilities capital revenue and expenses of the business For you expenses may or may not literally include taxes but however you want to slice it taxes and tax considerations obviously have a big impact on how businesses are organized and run

Financial analysis is defined as the process of discovering economic facts about an enterprise andor a project on the basis of an interpretation of financial data Financial Analysis also seeks to look at the capital cost operations cost and operating revenue The analysis decisively establishers a relationship between the various factors of a

project and helps in maneuvering the projectrsquos activities It also serves as a common measure of value for obtaining a clear-cut understanding about the project from the financial point of view

An analysis of several financial tools provides an important basis for valuing securities and appraising managerial programmes Financial analysis is vital in the interpretation of financial statements It can provide an insight into two important areas of management-return on investment and soundness of the companyrsquos financial position David Hawkins observes that the analyst evaluates results against the particular characteristics of the company and its industry He seldom expects answers from this process but he hopes that it should provide him with clues as to where he should focus his subsequent analysis

Internal management accounts provide information which is valuable for the purpose of control The information is made available in the form of accounting data which may be manifested as financial is made accounting statement A financial analysis reveals where the company stands with respect to profitability liquidity leverage and an efficient use of its assets

Financial reports provide the framework within which business planning takes placeThey are the key through which an effective control of a business enterprise is exercised It is the process of determining the significant financial characteristics of a firm It may be external or internal The external analysis is performed by creditors stockholders and investment analysis The internal analysis is performed by various departments of a firm

Significance of Financial Analysis

Financial analysis primarily deals with the interpretation of the data incorporated in the Performa financial statements of a project and the presentation of the data in a from in which it can be utilised for a comparative appraisal of the projects It is in effect concerned with the development of the financial profile of the project

Its purpose is to find out whether the project is attractive enough to secure funds needed for its various constituent activities and once having secured the funds whether the project will be able to generate enough economic values to achieve the objective for which it is sough to be implemented It deals not only with the financial aspects of a project but also with its operational aspects

As such it is necessary to undertake such an analysis not only in the case industrial project but also in the case of non-industrial project Analysis of financial statements has become very significant due to the widespread interest of various parties in the financial results of a company In recent years the ownership of capital of most public companies has become broad-based A number of parties and bodies including creditors potential suppliers and debenture-holders credit institutions like banks industrial finance corporations potential investors and employees trade unions important customers economists investment analysis taxation authorities and Government have a stake in the financial results of a company Various people look at the financial statements from various angles

A number of techniques have been developed to undertake analysis of financial statements in order to reach conclusions about the financial health profitability and efficiency of an enterprise and also to compare an enterprise with other similar undertakings The technique of ratio analysis is the most important tool of financial analysis It helps in comparing the performance of various companies and judges their financial soundness

Utility of financial analysis

Utility of Financial and Accounting StatementsFinancial statements play a vital role in the internal financial control of an enterprise These should therefore be properly constructed analysed and interpreted by

executives bankers creditors and investors These financial components are tightly intertwined with each other and with the operational decisions made by the business

Capital purchases and assets

Almost all businesses need to acquire and use fixed assets That acquisition of course can be through purchasing or through renting or leasing Purchase and lease decisions in turn require ROI analysis and financing decisions Then once an asset is acquired it must be recovered or expensed over time to reflect its depreciation and plan for its replacement The financing and cash flow decisions involved in acquiring assets will affect both business operations and owner finances especially in proprietorships partnerships and closely held corporations

Capital structure

Capital structure refers to how much of the business financing is through owner equity and how much is through debt or other liabilities and how it is done that is the mix of financial instruments and ownership vehicles Business capital requirements and owner decisions influence the capital structure which in turn influences the owners personal finances Entrepreneurs must decide how much of their own capital to invest in the business how they will be paid for that capital (in profits wages interest or other ways) and how procuring capital through loans will affect their own financial well-being

Working capital

This is a tough concept for many entrepreneurs to grasp It is capital used to finance the flow-through what goes into the business and what goes out of the business--not the fixed or tangible assets of the business It is used to pay for inventory and to provide cash for other items necessary to the day-to-day running of the business Any business that must pay a supplier or an employee before providing a product or a service to its customers or must provide a product or a service to customers before receiving payment needs working capital to make this happen Working capital is part of the total capital required to run a business--and the most dynamic part Insufficient working capital can choke business operations--insufficient inventory inability to offer satisfactory customer purchase terms inability to pay employees or suppliers It is very common for a business and its entrepreneurs to underestimate its need for working capital The usual result is that the owner must kick in more capital from personal finances--or accumulate more debt Working capital mismanagement is a common cause of personal financial failure for entrepreneurs

Cash flow

This is the bigger picture for working capital Does the business have enough cash to meet its ongoing business needs Does it generate enough cash through operations to replace assets pay its owners and fund its growth Poor cash flow leads to inadequate business resources It can cause an assortment of financial problems from decreases in owner returns to severe shortages of capital that must be met eventually by the owners Cash flow becomes especially critical when the owners must replace key assets or as theyre implementing important growth and competitive strategies Many a business has declined or failed because of inadequate cash flow to replace assets or to execute key competitive strategies--and these problems almost always come back to the doorstep of the entrepreneur

Risk management

Any business faces various financial risks Customers dont always pay interest rates dont always stay the same tax rules change sources of funds dont always come through as expected owners or investors can leave and the list goes on--all with obvious personal financial consequences

Personal Finances managed by Entrepreneur

For now its sufficient to say that personal finances include the income and expenses and the assets and liabilities of the individual entrepreneur and his household Within those parameters individual personal finance includes managing cash and money setting short- and long-term goals and putting plans in place to achieve those goals Here are some important pieces to the personal financial puzzle and how they relate to the operations and especially the finances of the business

Cash and money management

Just as in the business the key to a financially healthy and secure household lies in managing day-to-day money flows--income and expenses Here we talk about

the use of personal budgets and banking and credit to manage family finances and lay bricks in place to achieve longer-term goals

Income from business

Every entrepreneur has to decide when how and how much to be paid from the business This key decision obviously impacts personal finances but it is also important to the financial health of the business The amount and timing of such payments should be right for both the entrepreneur and the business Also it should generally--but not always--be done in a way to minimize tax impact The amount and regularity of income from the business must of course be accounted for in the personal financial budget Payment may be in forms besides cash--benefits retirement savings or use of assets However entrepreneurial compensation is structured it must be thought through carefully

Management and growth of personal wealth

We mentioned income but income most surely doesnt translate directly to wealth Just ask the thousands (millions) of entrepreneurs and other individuals with substantial incomes but little to show for them The slogan is Make it keep it grow it--but many never get past make it Why Poor money management--lack of awareness commitment and control--gets in the way of keeping it and poor or inattentive use of investing and savings vehicles gets in the way of growing it Now we know that most entrepreneurs are too busy to be very active investors but we will offer some investing basics to help savvy entrepreneurs figure out where to stash their cash

Risk management

Just as in business your personal life involves risks including loss of income health problems liability and loss of property Risk management isnt just about insurance although insurance is an important tool used to manage risk Entrepreneurs and their families incur the same risks as other people but business owners may face some additional risks--and may also have some other alternatives to help manage them

Benefits

If youre a corporate or public service employee your fringe benefits--insurance coverage retirement bonuses discounts use of facilities etc--are usually fairly well defined upfront or at least defined as a set of choices When youre an entrepreneur the skys the limit at least within the law The business can provide your benefits if it is large enough it can take advantage of group plans and rates Good entrepreneurial personal finance means choosing the right combination of benefits to get you the most personally while not compromising the business and while minimizing total taxes

Retirement planning

Retirement planning means figuring out how much you need for retirement and how you will achieve that number or goal retirement plans refer to the specific savings vehicles you use to move toward achieving that goal The first is a matter of pure planning and number crunching for the entrepreneur it must include an exit strategy a way out of the business The second is really part of the benefits package--choosing the right retirement savings package to maximize savings and tax advantages for both you and your business There are many choices complex choices that depend on both the finances and the operations (specifically number and type of employees) of the business

Transition and distribution planning

Sooner or later for financial or other personal reasons every entrepreneur needs to figure out an exit strategy from the business Needless to say also sooner or later we all die In personal finance estate planning concerns the preparation to transfer assets and decision-making authority to others When a business is involved the process is first more complex and second should usually start earlier If something happens to you what happens to the business If something happens to one of your partners or key employees what happens to the business And what happens to your personal finances as a result of these events Should you sell your business When and why How do you maximize your personal wealth as you close the doors Again many many choices--all begging for careful planning

Demand and Supply Management

When starting a business it is very important to consider supply and demand as a factor for predicting the success of your entrepreneurial venture You might have a great idea for a business yet if no one is willing to purchase your goods or services then your chances of failure are higher For eg If embroidery business had been the third business of its type in any community it would not have been successful because there would have been an abundance of embroidery businesses However since it is first only embroidery business in the area entrepreneur has been able to meet communityrsquos demand for embroidery work

Supply and Demand

Another important aspect of our economy is scarcity better known as the law of supply and demand You see this law in action (or hear of its effects) every time there is a major sports or entertainment event The tickets are sold out in hours and at substantial prices Why are people willing to pay so much Because there are many who want to attend the event and few seats available In other words the demand is greater than the supply In such circumstances price becomes the mechanism for sorting out consumers In a free enterprise system those who have the money and are willing to spend it will reap the benefits If customers demand a good or service that is not readily available then a scarcity exists

Demand is the quantity of goods or services that consumers are willing to buy For example if every consumer demands a new DVD player during the holiday season but the stores cannot get shipments in then a scarcity will be created The prices will skyrocket because a few people are willing to pay

more money to get the DVD player in time for the holidays In other words the lower the supply and the higher the demand the higher the price The DVD supply provides an example of shortage as it relates to the supply and demand curve

Major companies may want to create a shortage during the holiday season by limiting supplies so that they can maintain a higher price For example Microsoft introduced Xbox prior to a holiday season Many young people added this game to their wish list only to discover that the game would not be released until two weeks before Christmas This deadline or short notice created a demand for Xbox yet the supply available from Microsoft was limited creating a shortage The Xbox sold for a higher price because the demand was high and the supply was low In a few years the Xbox will be much cheaper to purchase because the supply will have increased making it readily available

In addition the demand will probably decrease because other games will come onto the market Demand decreases and supply increases causing prices to decrease as well This same concept was used several years ago with Cabbage Patch dolls Mattel advertised these dolls prior to Christmas Many children requested them for Christmas but the supply was limited A shortage was created and the public demanded the items Therefore people were willing to pay higher prices Now Cabbage Patch dolls are no longer available or demanded and many people paid a high price for an item that is nearly worthless today

Supply is the amount of a good or service that producers are willing to provide In our DVD player scenario if every store had plenty of DVD players to sell yet no one was buying them then the stores would probably lower the price in order to reduce inventory In other words the higher the supply and the lower the demand the lower the price This is an example of surplus as it relates to the supply and demand curve For example the Xbox is readily available today therefore the supply has increased and the demand has decreased Prices will be lower as a result As with the Cabbage Patch dolls after Christmas the supply increased but the demand decreased There was now an overabundance so the stores had to lower prices drastically in order to clear inventory

There is a point in supply and demand in which they are equal known as equilibrium Equilibrium is the point in price at which the consumer is willing to buy

There fore it is the entrepreneur who through market analysis analyse the exact demand and supply of particular product so the various resource can be managed and arranged accordingly They turn demand into supply by recognizing consumer wants and acting upon them Because of the growing popularity of embroidered business clothing and school items we were able to address this embroidery demand

Managing labour

Has evolution made managing people difficult or easy todayrsquos workforce becoming increasingly diverse and organizations doing more to maximize the benefits of the differences in employees Human Resource managers are evolving from the ldquoold schoolrdquo sideline players to the front-line fighters and Organizations are relying on managers to get the people who get the job done and of course make the company money Have you all noticed recently that even politicians have started requiring the services of HR managers So as for entrepreneur also it has become necessary to manage the human resource efficiently to make profits

ldquoTrust people treat them like adults enthuse them by lively and imaginative leadership develop and demonstrate an obsession for quality make them feel they own the business and your work force will respond with total commitmentrdquo Tom Peters

A question comes to our minds why this sudden focus on people management

Well people have always been central to organizations but their strategic importance is growing in todayrsquos knowledge-based business world like never before this is largely because an organizationrsquos success increasingly depends on the knowledge skills and abilities of its employees particularly as they help establish a set of core competencies which distinguish one organization from its competitors

As entrepreneurs face the challenge of implementing positive change within company Here are 10 employee-related resolutions which should be considered for managed of human resource

1 Develop and share goals with your employees

Identify where you want your company to go and how you can get there The goals should be specific measurable attainable realistic and timely Next make sure that every employee knows and understands what to do to achieve those goals

2 Clarify roles and job descriptions

Identify specifically what each person does and should be doing Ensure that everyone knows how his or her efforts contribute to the organizational success Unclear roles lead to conflict disappointment hard feelings and decreased morale You can easily avoid these negatives when job descriptions are accurate and clear

3 Develop an employee volunteer program

Gather a group of employees and think of ways your company can give back to the community Employees will see this as a positive step your organization is taking to assist others This is usually a great morale booster too Youve been making an impact on your company now you can do the same for your community

4 Manage by walking around

Get out of your office See what your employees are doing Talk with them so they know youre interested in their work Discover how well people are getting along with each other Identify frustrations that employees have with each other and with their work Get to know them as human beings not just employees Be available to answer questions clarify options and interpret company goals Become a valued resource to them

5 Address potential sources of conflict before they erupt

Talk with your employees and identify what gets in the way of their achievement It could be resources tools budgets processes or even managers Your task is to find these bottlenecks and remove them Apply proven techniques to lower tensions and build a positive work environment

6 Survey the corporate climate

Pinpoint the strengths and limitations of your organization These could be your people your management structure the way employees are treated and managed the clarity of goals roles process and systems and the effectiveness of personal interactions Then take action to improve the situation 7 Involve employees in plans for organizational change

Form a team to address the issues discovered in your survey Before implementing any changes convene groups of employees to discuss the need for changes and how those changes will be implemented Make sure employees feel involved in the process Participation will reduce resistance to the changes

8 Identify your stars and reward them

Everyone likes to know when theyre doing a good job The compliments validate their efforts and document their success Make sure that your top performers know

you appreciate their work and that you reward them with money recognition or advancement

9 Develop a management training program

Build your future managers now dont rely on chance Identify the core competencies that have led to success in your current managers and leaders Then develop those factors in other employees so that you have a continual supply of qualified individuals managing and leading your organization

10 Offer a periodic social hour

This will allow employees to develop collegiality share ideas in an informal atmosphere and get to know one another This can be done inside or outside of the work place This usually leads to increased employee satisfaction and interest in working with others

ldquoPeople are the primary source of competitive advantage At the end of the day we bet on people not strategiesrdquo

Knowledge management

ldquoA former President of the United States said that where knowledge spreads wealth spreads and to diffuse knowledge in the world is to diffuse wealth in the world Those words were spoken by President Rutherford B Hayes on May 15 1878 and they are as true today as they were 124 years ago

Those who acquire knowledge have a better opportunity to acquire wealth and the truly knowledgeable human being also desires to be a better neighbour citizen and student of the worldrdquohelliphellip

How much time do the people in our organizations spend looking for information Knowledge management can change this search time into highly effective work time Knowledge management is one of those ephemeral terms that seem to mean nothing and everything simultaneously During the past couple of years it has been variously identified with document management business intelligence collaborative computing corporate portals and any number of buzzwords But rather than a single product knowledge management encompasses a business strategy aimed at taking advantage of a companys existing base of information experience and expertise

Defining Knowledge Management

Knowledge is a fluid mix of framed experience values contextual information and expert insight that provides a framework for evaluating and incorporating new experiences and information It originates and is applied in the minds of knower In organizations it often becomes embedded not only in documents or repositories but also in organizational routines processes practices and norms

A working definition of knowledge

Sometimes we can solve a problem make a decision or perform some task because we know what is the correct solution alternative or behaviour we have the information we need to act Sometimes we know how to solve that problem make that decision or perform that task we have the knowledge we need to be successful Sometimes we know who can help us with the solution decision or task we can identify the expert and the expertise we need to get the right answers

Knowing what how and who in support of the key processes and strategies of an enterprise is the knowledge of interest to knowledge management

Types of knowledge

This ldquowhat how and whordquo is sometimes fully documented written down communicated or recorded in some explicit format Other times it is just in our heads an understanding that we possess in some tacit way based on our experience or learning In most organizations about 20 of the knowledge required for the successful operation of that organization is explicit the remaining 80 are tacit

Knowledge management deals with these two types of knowledge tacit and explicit It often seeks to make the tacit knowledge of an individual or group explicit so that it can be more readily shared with others As new knowledge is acquired it becomes part of the tacit knowledge base of the learner who subsequently adapts it and applies it as needed to solve new problems make new decisions or perform new tasks With experience and continued learning the tacit knowledge matures and evolves into new knowledge which remains tacit within the individual or group until they document it in some fashion making it explicit

Knowledge Management Framework

The management of knowledge consists of the application of the normal management functions - planning design supervision and reporting - to the processes that identify collect adapt organize apply share and create knowledge

Why we need knowledge management now

Why do we need to manage knowledge Ann Macintosh of the Artificial Intelligence Applications Institute (University of Edinburgh) has written a Position Paper on

Knowledge Processes of firm

Social Capital Knowledge Processes and Entrepreneurial Success

Social CapitalOf firm

Knowledge Creation

Acquisition

Knowledge Assimilation

Knowledge Exploitation

Entrepreneurial Success

Knowledge management framework

Knowledge Asset Management that identifies some of the specific business factors including

o Marketplaces are increasingly competitive and the rate of innovation is rising

o Reductions in staffing create a need to replace informal knowledge with formal methods

o Competitive pressures reduce the size of the work force that holds valuable business knowledge

o The amount of time available to experience and acquire knowledge has diminished

o Early retirements and increasing mobility of the work force lead to loss of knowledge

o There is a need to manage increasing complexity as small operating companies are trans-national sourcing operations

o Changes in strategic direction may result in the loss of knowledge in a specific area

To these paraphrases of Ms Macintoshrsquos observations we would add o Most of our work is information based o Organizations compete on the basis of knowledge o Products and services are increasingly complex endowing them with a

significant information component o The need for life-long learning is an inescapable reality

In brief knowledge and information have become the medium in which business problems occur As a result managing knowledge represents the primary opportunity for achieving substantial savings significant improvements in human performance and competitive advantageItrsquos not just a Fortune 500 business problem Small companies need formal approaches to knowledge management even more because they donrsquot have the market leverage inertia and resources that big companies do They have to be much more flexible more responsive and more right (make better decisions) mdash because even small mistakes can be fatal to them

Significance of Knowledge Management

Knowledge is available and leveraged amongst different parts of the organization

ndash Employees in distant locations are able to collaborate

ndash Activity or process times are positively impacted through the instant availability of knowledge

1048698 Knowledge Management is information put to work

ndash Human Interaction is the focal point surrounding the collection distribution and reuse of information

ndash Decision-making is facilitated by the almost immediate availability of information and the tools to analyze it

1048698 Helps maintain an organizationrsquos intellectual capital

ndash An employeersquos knowledge about a customer solution or process is available to the entire organization

ndash Attrition has less of an impact on the organization since an individualrsquos knowledge is already captured

Knowledge management a cross-disciplinary domainKnowledge management draws from a wide range of disciplines and technologies

o Cognitive science Insights from how we learn and know will certainly improve tools and techniques for gathering and transferring knowledge

o Expert systems artificial intelligence and knowledge base management systems (KBMS) AI and related technologies have acquired an undeserved reputation of having failed to meet their own mdash and the marketplaces mdash high expectations In fact these technologies continue to be applied widely and the lessons practitioners have learned are directly applicable to knowledge management

o Computer-supported collaborative work (groupware) In Europe knowledge management is almost synonymous with groupware hellip and therefore with Lotus Notes Sharing and collaboration are clearly vital to organizational knowledge management mdash with or without supporting technology

o Library and information science We take it for granted that card catalogs in libraries will help us find the right book when we need it The body of research and practice in classification and knowledge organization that makes libraries work will be even more vital as we are inundated by information in business Tools for thesaurus construction and controlled vocabularies are already helping us manage knowledge

o Technical writing Also under-appreciated mdash even sneered at mdash as a professional activity technical writing (often referred to by its practitioners as technical communication) forms a body of theory and practice that is directly relevant to effective representation and transfer of knowledge

o Document management Originally concerned primarily with managing the accessibility of images document management has moved on to making content accessible and re-usable at the component level Early recognition of the need to associate metainformation with each document object prefigures document management technologyrsquos growing role in knowledge management activities

o Decision support systems According to Daniel J Power Researchers working on Decision Support Systems have brought together insights from the fields of cognitive sciences management sciences computer sciences operations research and systems engineering in order to produce both computerised artifacts for helping knowledge workers in their performance of cognitive tasks and to integrate such artifacts within the decision-making processes of modern organisations [See Powersrsquo DSS Research Resources Home page] That already sounds a lot like knowledge management but in practice the emphasis has been

on quantitative analysis rather than qualitative analysis and on tools for managers rather than everyone in the organization

o Semantic networks Semantic networks are formed from ideas and typed relationships among them mdash sort of hypertext without the content but with far more systematic structure according to meaning Often applied in such arcane tasks as textual analysis semantic nets are now in use in mainstream professional applications including medicine to represent domain knowledge in an explicit way that can be shared

o Relational and object databases Although relational databases are currently used primarily as tools for managing structured data mdash and object-oriented databases are considered more appropriate for unstructured content mdash we have only begun to apply the models on which they are founded to representing and managing knowledge resources

o Simulation Knowledge Management expert Karl-Erik Sveiby suggests simulation as a component technology of knowledge management referring to computer simulations manual simulations as well as role plays and micro arenas for testing out skills (Source Email from Karl-Erik Sveiby July 29 1996 )

o Organizational science The science of managing organizations increasingly deals with the need to manage knowledge mdash often explicitly Itrsquos not a surprise that the American Management Associationrsquos APQC has sponsored major knowledge management event

Entrepreneurs contribute to the economic cycle of success As entrepreneurs they do the following

They provide venture capital by gathering resources to initiate their business We were able to attain state grants to assist in the purchase of equipment totalling more than $10000 The initial start-up costs would have been too high without this outside assistance Many times individuals have to borrow money or seek bank loans in order to obtain their venture capital If a young entrepreneur were to establish a restaurant or catering business he or she would need to seek a physical location (a building) and purchase kitchen equipment as venture capital

They provide jobs not only for themselves but also for other individuals who help in the business endeavours As the business expands and grows the entrepreneur realizes that he or she canrsquot work and manage the business 24 hours a day 7 days a week So the entrepreneur will seek additional employees to lighten the workload

They change society by incorporating creative ideas to answer consumer needs and wants We were able to introduce personalized embroidery designs to businesses in our community The businesses responded positively to this creative idea thus contributing to the success of our embroidery business On a more general basis when McDonaldrsquos introduced the drive-through concept to fast-food restaurants they changed societyrsquos idea of ldquoeating outrdquo to include ldquoin-home fast-food conveniencerdquo Many other fast-food establishments such as Hardeersquos Burger King and Wendyrsquos accepted this concept and changed societyrsquos idea of eating out forever

Creating Indian Entrepreneurs A recent Mckinsey amp Company-Nasscom report estimates that India needs at least 8000 new businesses to achieve its target of building a US$87 billion IT sector by 2008 Similarly in the next 10 years 110-130 million Indian citizens will be searching for jobs including 80-100 million looking for their first jobs This does not include disguised unemployment of over 50 among the 230 million employed in rural India Since traditional large employers- including the government and the old economy player-may find it difficult to sustain this level of employment in future it is entrepreneurs who will create these new jobs and opportunities

Todayrsquos knowledge based economy is fertile ground for entrepreneurs in India It is rightly believed that India has an extraordinary talent pool with virtually limitless potential to become entrepreneurs Therefore it is important to get committed to creating the right environment to develop successful entrepreneurs To achieve this India must focus on four areas

1 Create the Right Environment for Success Entrepreneurs should find it easy to start a business To do so most Indians would start slow with capital borrowed from family and friends the CEO playing the role of salesman and strategist a professional team assembled months or perhaps years after the business was created and few if any external partners Compare this with a start-up in Silicon Valley a Venire Capitalist (VC) or angel investor would be brought in early on a professional management team would drive the business a multifunctional team would be assembled quickly and partnerships would be explored early on to scale up the business A major challenge for India is to create a handful of areas of excellence- the breeding ground where ideas grow into businesses For example Gurgaon and Hyderabad for remote services or Bangalore for IT One way of strengthening these areas is to consider the role of universities and educational institutions-places where excellence typically thrives

2 Ensure that Entrepreneurs have access to the Right Skill A survey conducted by McKinsey amp Company last year revealed that most Indian start-up businesses face two skill gaps entrepreneurial (how to manage business risks build a team identify an get funding) and functional (product development know-how marketing skills etc) India can move toward ensuring that the curriculum at universities is modified to address todayrsquos changing business landscape particularly in emerging markets and to build lsquocentres of entrepreneurial excellencersquo in institutes that will actively assist entrepreneurs

3 Ensure that Entrepreneurs have access to lsquoSmart Capitalrsquo For a long time Indian entrepreneurs have had little access to capital It is true that in the last few years several Venture Funds have entered the Indian Market And while the sector is still in infancy in India (with estimated total disbursement of less than US$05 billion in the year 2003) VCs are providing capital as well as critical knowledge and access to potential partners suppliers and clients across the globe However India has only a few angel investors who support the idea in the early stages before VCs become involved While associations such as TIE are seeking to bridge the gap by working at

creating a TIE India Angel Forum this is Indiarsquos third challenge creating a global support network of lsquoangelsrsquowilling to support young business

4 Enable Networking and Exchange Entrepreneurs learn from experience-theirs and that of others The rapid pace of globalization and fast growth of Asian economies present tremendous opportunities and challenges for India Through planning and focus India can aspire to create a pool of entrepreneurs who will be the regions ndashand the worldrsquos-leaders of tomorrow

The Future of Entrepreneurship Both the Central Government and various State Governments are taking increased interest in promoting the growth of entrepreneurship Individuals are being encouraged to form new businesses and are being provided such government support as tax incentives buildings roads and a communication system to facilitate this creation process The encouragement by the central and state governments should continue in future as more lawmakers are realizing that new enterprises create jobs and increase the economic output of the region Every state government should develop its own innovative industrial strategies for fostering entrepreneurial activity and timely development of the technology of the area The states should have their own state-sponsored venture funds where a percentage of the funds have to be invested in the ventures in the states

Societyrsquos support of entrepreneurship should also continue This support is critical in providing both motivation and public support A major factor in the development of this societal approval is the media The media should play a powerful and constructive role by reporting on the general entrepreneurial spirit in the country highlighting specific success cases of this spirit in operation Finally large companies should show an interest in their special form of entrepreneurship-intrapreneurship-in the future These companies will be increasingly interested in capitalizing on their Research amp Development in the hyper competitive business environment today

Present scenario

Melt down in financial markets has plunged the economies around the world into recessions At these times other features start appearing in the economy such as Investors stepping backward customers draw the line to their expenditure and finally revenue falls But it is a fact that during the Great depression of 1929 one of the well known companies lsquoMOTOROLArsquo had a fortune time amp expanded worldwide

What has India done so far

ldquoIndiarsquos vibrant entrepreneurial culture was stifled by restrictive economic policies that seriously undermined development Recent reforms have injected a new sense of life into Indiarsquos sluggish economyrdquo-GORDON CORERA ReportsThis report states the problems faced by firms between 1950 and 1991 Despite the effort of former PM Rajiv Gandhi to bring forth the concept of liberalisation in Indian economy in 1986 India had to wait for five years for the LPG (Liberalisation

Privatisation and Globalisation) reforms which was adopted becauseof a serious macro-economic crisis in both fiscal and foreign exchange sectors of the economyBy this the well established companies like TATA which had a tight hold in the Indian economy gained a lot and became multi national corporations but in fact it gave the foreign entrepreneurs to establish their business in India by way of joint ventures etc And thus the fresh entrepreneurs had a less opportunity and had to face new challenges and so these reforms of Government did not really help the entrepreneurs

Where does India stand now

India has been left behind by many Asian economies including countries that were poor as India few decades ago After the reforms Indiarsquos growth rate now looks set to stabilise at a healthier 6 to 7 a year One of the interesting fact is that even in closing businesses entrepreneurs in India have to go through a complicated procedure and by which India is ranked 133rd in closing businesses

What India has to consider

lsquoRisk is the reward for businessrsquo but then the middle class Indians who are the majority in the Indian population step backwards in investing in a new business even if they have sufficient knowledge of some business source of finance and new ideas this is mainly due to the lack of ldquosafetyrdquo which is non ndashexistent

a Purely indigenous opportunities are not being developed in India

b The need of incubator funds in India as there is a need of capital to invest in business

c Source of finance-unclear and complicated India is ranked 65th in getting credit

d Lack of managerial skills among the fresh entrepreneurs They often fail to channelize funds

e Lack of basic practical knowledge even among few business students where the learning process cannot withstand the international standards

f Political factors-corruption bribery and other crimes evils

What has to be done

a If India continues on the free market path stress education which leads to greater public awareness and accountability develops its physical and economic infrastructure to facilitate enterprise the license raj of India will someday be equal that of the US in its effectiveness

b Policies of financial institutions to support entrepreneurs and set up new firmsBanks and financial institutions should appreciate the specific nature of entrepreneurrsquos needs and should provide financial help in which the government should take

initiative to make the procedure simple States like Andhra Pradesh thought about this and thus Hyderabad holds a distinguished status of industrial development

c Setting up of innovation councils and other councils

d Fresh young and Women entrepreneurs should be encouraged

e There should be conducive political conditions in the country

f Support to entrepreneurs and local communities should be primarily provided in matching grant forms to facilitate the mobilization of local resources and ownershipFor instance rural people of Ludhiana in Punjab produce footballs which are exported to countries known for football matches and such communities should be given support growth will hang about

WHAT IS TO BE DONE

a Provide the necessary package of support-technical financial commercial legal and so on-with flexible autonomous agencies adapting their support and operations to the concerned enterprises

b Intellectual property rights (IPR) play an important role in encouraging innovation It gives a unique recognition for their contribution to the innovation chart and protection of their work For eg copyrights to softwarersquos and literary works and patents to inventions

c Incentives are motivation for the workers to work hard and it often leads to innovative ideas and actions leading to innovation

d The expansion plans must be realistic and provide a reasonable remuneration of the capital invested

e Role of small and medium enterprises (SMEs) In the new environment the competitiveness of large firms greatly depends on the efficiency of small firms It should be up-to-date but at the same time it must be able to meet the needs of both traditional and new product lines Eg Silicon Valley in the United States is a very shining example of the contribution of techno-entrepreneurship to the whole world

f The physical infrastructure in the country should be made adequate as in the supply of professional and commercial services

g The education system in India should incorporate skill-based learning and the principles of market economy early in the education stage as in the foreign countries

h Industry investment in RampD should be increasedGovernment agencies amp educational institutions should conduct quality research and development In India only few institutions like the IITrsquoS accomplish this

i Making the entrepreneurship environment favourable for RampD and innovation

j Maintaining stable legal conditions

k Assess the appropriateness effectiveness efficiency of the Cooperative Research Centres (CRC) and Research and Development (RampD)

l Techno-economic Surveys and comprehensive surveys regarding the progress in RampD should be conducted

m Encumbrance of the employees with work beyond their capacity would neither permit the smooth functioning of the firm nor leads to innovationn IT revolution through out the country as in the Malappuram (Kerala) which is regarded as the first computer literate district in India groomed by the Akshaya (e-literacy campaign)

Conclusion

ldquoIndia will be a technologically advanced country In evidence thereof it will import and not export talented peoplerdquo It will minimize income disparities and economic inequalities maximize employment by matching employment skills to technology innovation The entrepreneurship innovation capacity of India and its global competency has been well explained with apt examples of present scenario Now its well understood that the support of government the initiative of private agencies the active participation of public sector entrepreneurs politicians and the effort of all citizens can raise the tricolour flag of India to the top position in the ranking of entrepreneurship and innovation development Moreover India will realize its entrepreneurship and innovation potential The definition of entrepreneurship has evolved over time as the worldrsquos economic structure has changed and become more complex Risk taking innovation and creation of wealth are the criteria that have been developed as the study of new business creations has evolved

The decision to start an entrepreneurial venture consists of several sequential steps (1) the decision to leave a present career or lifestyle (2) The decision that an entrepreneurial venture is desirable and (3) the decision that both external and internal factors make new venture creation possible

There are both pushing and pulling influences active in the decision to leave a present career the ldquopushrdquo of job dissatisfaction or even layoff and the ldquopullrdquo toward entrepreneurship of seeing an unfilled need in the market place The desirability of starting onersquos own company is strongly influenced by culture sub-culture family teachers and peers Any of these influences can function as a source of encouragement for entrepreneurship with support ranging from government support that favour business to strong personal role models of family or friends Beyond the stage of seeing entrepreneurship as a ldquoa good ideardquo the potential entrepreneur must possess or acquire the necessary education management skills and financial resources for launching the venture

The study of entrepreneurship has relevance today not only because it helps entrepreneurs better fulfill their personal needs but because of the economic

contribution of the new ventures More than increasing national income by creating new jobs entrepreneurship acts as a positive force in economic growth by serving as the bridge between innovation and market place Although government gives great support to basic and applied research it has to have great success in translating the technological innovations to products or services Although intrapreneurship offers a promise of marriage of those research capabilities and business skills that one expects from a large corporation the results have not been spectacular This leaves the entrepreneur who frequently lacks both technical and business skills to serve as the major link in the process of innovation development and economic growth and revitalization The study of entrepreneurship and education of potential entrepreneurs are essential parts of any attempt to strengthen this link so essential to a countryrsquos economic well-being

Bibilography

1 Entrepreneur Development-New Venture Creation By Satish Taneja amp SLGupta

2 Lectures on Entrepreneurship Development By DrBM Kacholia of Narsee Monjee Insitute of Management Studies Mumbai

3 Entrepreneurship-ICFAI Publication

4) Fundamental of entrepreneur By GSSudha

5) wwwentrepreneurcom

6) wwwwikipediacom

7) wwwknoweledgeentrepreneurcom

8) Entrepreneurship and supporting institutions an analytical approach (httpwwwfaoorgDOCREP)

ON




CERTIFICATE

FACULTY OF COMMERCE AND MANAGEMENTJAI NARAIN VYAS UNIVERSITY JODHPUR

This is certifying that Term Paper titled


Has been satisfactorily completed by

MISS SWATI SURANA

As a partial fulfilment of Term Paper work for


During academic year 2007-2009


Dr (Mrs) Meeta Nihalani Swati SuranaMBA PhD MBA (Semester 4th)

ACKNOWLEDGEMENT







MissSwati Surana

MBA (SEM-4th)


Table of Content

1) Introduction








9) Managing Labour


11) Conclusion

12) Bibliography

Anything

Introduction






Center






















































Market constraints




Land

CAPITAL knowledge

LABOUR technology

Innovation

























Innovation Defined














1 Market need










assets

Fog Lights

Radical Innovations


Major Innovations




Major

Minor

Effec

t of I

nnov

atio

n on

Con

sum

er H

abits

and

Beh

avio

urs

Enhances Destroys







2 Economic growth






















5 Strategic RampD











bull Demographics


bull New knowledge


































Tata Motors




Tata Steel


Tata BP Solar


Conclusion










Capital Management

















Capital structure


Working capital


Cash flow


Risk management











Risk management


Benefits


Retirement planning






Supply and Demand









Managing labour




































Types of knowledge










Knowledge Creation

Acquisition




















































Present scenario















What has to be done








WHAT IS TO BE DONE














Conclusion






Bibilography






6) wwwwikipediacom



ON




ACKNOWLEDGEMENT







MissSwati Surana

MBA (SEM-4th)


Table of Content

1) Introduction








9) Managing Labour


11) Conclusion

12) Bibliography

Anything

Introduction






Center






















































Market constraints




Land

CAPITAL knowledge

LABOUR technology

Innovation

























Innovation Defined














1 Market need










assets

Fog Lights

Radical Innovations


Major Innovations




Major

Minor

Effec

t of I

nnov

atio

n on

Con

sum

er H

abits

and

Beh

avio

urs

Enhances Destroys







2 Economic growth






















5 Strategic RampD











bull Demographics


bull New knowledge


































Tata Motors




Tata Steel


Tata BP Solar


Conclusion










Capital Management

















Capital structure


Working capital


Cash flow


Risk management











Risk management


Benefits


Retirement planning






Supply and Demand









Managing labour




































Types of knowledge










Knowledge Creation

Acquisition




















































Present scenario















What has to be done








WHAT IS TO BE DONE














Conclusion






Bibilography






6) wwwwikipediacom



ON





Table of Content

1) Introduction








9) Managing Labour


11) Conclusion

12) Bibliography

Anything

Introduction






Center






















































Market constraints




Land

CAPITAL knowledge

LABOUR technology

Innovation

























Innovation Defined














1 Market need










assets

Fog Lights

Radical Innovations


Major Innovations




Major

Minor

Effec

t of I

nnov

atio

n on

Con

sum

er H

abits

and

Beh

avio

urs

Enhances Destroys







2 Economic growth






















5 Strategic RampD











bull Demographics


bull New knowledge


































Tata Motors




Tata Steel


Tata BP Solar


Conclusion










Capital Management

















Capital structure


Working capital


Cash flow


Risk management











Risk management


Benefits


Retirement planning






Supply and Demand









Managing labour




































Types of knowledge










Knowledge Creation

Acquisition




















































Present scenario















What has to be done








WHAT IS TO BE DONE














Conclusion






Bibilography






6) wwwwikipediacom



ON




Introduction






Center






















































Market constraints




Land

CAPITAL knowledge

LABOUR technology

Innovation

























Innovation Defined














1 Market need










assets

Fog Lights

Radical Innovations


Major Innovations




Major

Minor

Effec

t of I

nnov

atio

n on

Con

sum

er H

abits

and

Beh

avio

urs

Enhances Destroys







2 Economic growth






















5 Strategic RampD











bull Demographics


bull New knowledge


































Tata Motors




Tata Steel


Tata BP Solar


Conclusion










Capital Management

















Capital structure


Working capital


Cash flow


Risk management











Risk management


Benefits


Retirement planning






Supply and Demand









Managing labour




































Types of knowledge










Knowledge Creation

Acquisition




















































Present scenario















What has to be done








WHAT IS TO BE DONE














Conclusion






Bibilography






6) wwwwikipediacom



ON

























































Market constraints




Land

CAPITAL knowledge

LABOUR technology

Innovation

























Innovation Defined














1 Market need










assets

Fog Lights

Radical Innovations


Major Innovations




Major

Minor

Effec

t of I

nnov

atio

n on

Con

sum

er H

abits

and

Beh

avio

urs

Enhances Destroys







2 Economic growth






















5 Strategic RampD











bull Demographics


bull New knowledge


































Tata Motors




Tata Steel


Tata BP Solar


Conclusion










Capital Management

















Capital structure


Working capital


Cash flow


Risk management











Risk management


Benefits


Retirement planning






Supply and Demand









Managing labour




































Types of knowledge










Knowledge Creation

Acquisition




















































Present scenario















What has to be done








WHAT IS TO BE DONE














Conclusion






Bibilography






6) wwwwikipediacom



ON




LABOUR technology

Innovation

























Innovation Defined














1 Market need










assets

Fog Lights

Radical Innovations


Major Innovations




Major

Minor

Effec

t of I

nnov

atio

n on

Con

sum

er H

abits

and

Beh

avio

urs

Enhances Destroys







2 Economic growth






















5 Strategic RampD











bull Demographics


bull New knowledge


































Tata Motors




Tata Steel


Tata BP Solar


Conclusion










Capital Management

















Capital structure


Working capital


Cash flow


Risk management











Risk management


Benefits


Retirement planning






Supply and Demand









Managing labour




































Types of knowledge










Knowledge Creation

Acquisition




















































Present scenario















What has to be done








WHAT IS TO BE DONE














Conclusion






Bibilography






6) wwwwikipediacom



ON


























Innovation Defined














1 Market need










assets

Fog Lights

Radical Innovations


Major Innovations




Major

Minor

Effec

t of I

nnov

atio

n on

Con

sum

er H

abits

and

Beh

avio

urs

Enhances Destroys







2 Economic growth






















5 Strategic RampD











bull Demographics


bull New knowledge


































Tata Motors




Tata Steel


Tata BP Solar


Conclusion










Capital Management

















Capital structure


Working capital


Cash flow


Risk management











Risk management


Benefits


Retirement planning






Supply and Demand









Managing labour




































Types of knowledge










Knowledge Creation

Acquisition




















































Present scenario















What has to be done








WHAT IS TO BE DONE














Conclusion






Bibilography






6) wwwwikipediacom



ON
















1 Market need










assets

Fog Lights

Radical Innovations


Major Innovations




Major

Minor

Effec

t of I

nnov

atio

n on

Con

sum

er H

abits

and

Beh

avio

urs

Enhances Destroys







2 Economic growth






















5 Strategic RampD











bull Demographics


bull New knowledge


































Tata Motors




Tata Steel


Tata BP Solar


Conclusion










Capital Management

















Capital structure


Working capital


Cash flow


Risk management











Risk management


Benefits


Retirement planning






Supply and Demand









Managing labour




































Types of knowledge










Knowledge Creation

Acquisition




















































Present scenario















What has to be done








WHAT IS TO BE DONE














Conclusion






Bibilography






6) wwwwikipediacom



ON












assets

Fog Lights

Radical Innovations


Major Innovations




Major

Minor

Effec

t of I

nnov

atio

n on

Con

sum

er H

abits

and

Beh

avio

urs

Enhances Destroys







2 Economic growth






















5 Strategic RampD











bull Demographics


bull New knowledge


































Tata Motors




Tata Steel


Tata BP Solar


Conclusion










Capital Management

















Capital structure


Working capital


Cash flow


Risk management











Risk management


Benefits


Retirement planning






Supply and Demand









Managing labour




































Types of knowledge










Knowledge Creation

Acquisition




















































Present scenario















What has to be done








WHAT IS TO BE DONE














Conclusion






Bibilography






6) wwwwikipediacom



ON







2 Economic growth






















5 Strategic RampD











bull Demographics


bull New knowledge


































Tata Motors




Tata Steel


Tata BP Solar


Conclusion










Capital Management

















Capital structure


Working capital


Cash flow


Risk management











Risk management


Benefits


Retirement planning






Supply and Demand









Managing labour




































Types of knowledge










Knowledge Creation

Acquisition




















































Present scenario















What has to be done








WHAT IS TO BE DONE














Conclusion






Bibilography






6) wwwwikipediacom



ON













5 Strategic RampD











bull Demographics


bull New knowledge


































Tata Motors




Tata Steel


Tata BP Solar


Conclusion










Capital Management

















Capital structure


Working capital


Cash flow


Risk management











Risk management


Benefits


Retirement planning






Supply and Demand









Managing labour




































Types of knowledge










Knowledge Creation

Acquisition




















































Present scenario















What has to be done








WHAT IS TO BE DONE














Conclusion






Bibilography






6) wwwwikipediacom



ON










bull Demographics


bull New knowledge


































Tata Motors




Tata Steel


Tata BP Solar


Conclusion










Capital Management

















Capital structure


Working capital


Cash flow


Risk management











Risk management


Benefits


Retirement planning






Supply and Demand









Managing labour




































Types of knowledge










Knowledge Creation

Acquisition




















































Present scenario















What has to be done








WHAT IS TO BE DONE














Conclusion






Bibilography






6) wwwwikipediacom



ON






























Tata Motors




Tata Steel


Tata BP Solar


Conclusion










Capital Management

















Capital structure


Working capital


Cash flow


Risk management











Risk management


Benefits


Retirement planning






Supply and Demand









Managing labour




































Types of knowledge










Knowledge Creation

Acquisition




















































Present scenario















What has to be done








WHAT IS TO BE DONE














Conclusion






Bibilography






6) wwwwikipediacom



ON













Capital Management

















Capital structure


Working capital


Cash flow


Risk management











Risk management


Benefits


Retirement planning






Supply and Demand









Managing labour




































Types of knowledge










Knowledge Creation

Acquisition




















































Present scenario















What has to be done








WHAT IS TO BE DONE














Conclusion






Bibilography






6) wwwwikipediacom



ON


















Capital structure


Working capital


Cash flow


Risk management











Risk management


Benefits


Retirement planning






Supply and Demand









Managing labour




































Types of knowledge










Knowledge Creation

Acquisition




















































Present scenario















What has to be done








WHAT IS TO BE DONE














Conclusion






Bibilography






6) wwwwikipediacom



ON





Cash flow


Risk management











Risk management


Benefits


Retirement planning






Supply and Demand









Managing labour




































Types of knowledge










Knowledge Creation

Acquisition




















































Present scenario















What has to be done








WHAT IS TO BE DONE














Conclusion






Bibilography






6) wwwwikipediacom



ON









Risk management


Benefits


Retirement planning






Supply and Demand









Managing labour




































Types of knowledge










Knowledge Creation

Acquisition




















































Present scenario















What has to be done








WHAT IS TO BE DONE














Conclusion






Bibilography






6) wwwwikipediacom



ON









Supply and Demand









Managing labour




































Types of knowledge










Knowledge Creation

Acquisition




















































Present scenario















What has to be done








WHAT IS TO BE DONE














Conclusion






Bibilography






6) wwwwikipediacom



ON










Managing labour




































Types of knowledge










Knowledge Creation

Acquisition




















































Present scenario















What has to be done








WHAT IS TO BE DONE














Conclusion






Bibilography






6) wwwwikipediacom



ON
































Types of knowledge










Knowledge Creation

Acquisition




















































Present scenario















What has to be done








WHAT IS TO BE DONE














Conclusion






Bibilography






6) wwwwikipediacom



ON











Knowledge Creation

Acquisition




















































Present scenario















What has to be done








WHAT IS TO BE DONE














Conclusion






Bibilography






6) wwwwikipediacom



ON



















































Present scenario















What has to be done








WHAT IS TO BE DONE














Conclusion






Bibilography






6) wwwwikipediacom



ON















What has to be done








WHAT IS TO BE DONE














Conclusion






Bibilography






6) wwwwikipediacom



ON









WHAT IS TO BE DONE














Conclusion






Bibilography






6) wwwwikipediacom



ON








Conclusion






Bibilography






6) wwwwikipediacom



ON





Bibilography






6) wwwwikipediacom



ON




Managing Resource for Enterpreneurship

Documents

Transcript of Managing Resource for Enterpreneurship