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Transcript of Unit I Entrepreneurship Suneel kumar
8/7/2019 Unit I Entrepreneurship Suneel kumar
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ENTREPRENEURSHIPENTREPRENEURSHIP
Suneel KumarSuneel KumarAssociate ProfessorAssociate ProfessorInvertis UniversityInvertis University
BareillyBareilly
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Entrepreneurs
Do things that are not generally done in the
ordinary course of business
Some entrepreneurs become
celebrities...others become ridiculed for
their failed dreams
All contribute to the spirit of free enterprise
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Entrepreneurship
Mainstream Economic
Factors Land
Labor
Capital Entrepreneurship
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Entrepreneurship
Entreprendre...17th century French...the
individual who undertook the risk of a new
enterprise... ³undertakers´.
They were ³contractors´ who bore the risks
of profit or loss
Examples: soldiers of fortune, adventurers,
builders, merchants and funeral directors
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Entrepreneurs...
14th century...Tax contractors...bore the
risks of collecting taxes. If they collected
more than the fee...they kept the rest as
profit.
Called the ³change agents´ of progressive
economies
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Entrepreneurs...
³Essai sur la nature du commerce en
general´...1755 ...describes an entrepreneur
as a person who pays a certain price for a
product to resell it at an uncertain price,
thereby making decisions about obtaining
and using resources while consequentlyassuming the risk of enterprise
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Entrepreneurs...
Adam Smith...The Wealth of Nations:
spoke of the ³enterpriser´ as an individual
who undertook the formation of an
organization for commercial purposes
A. Smith...mentioned ³role of
industrialist...,person with unusual foresightwho could recognize potential demand for
goods and services´
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Entrepreneurs...
³A Treatise on Political
Economy´...describes an entrepreneur as
one who possessed certain arts and skills of
creating new economic enterprises, yet a
person who had exceptional insight into
society¶s needs and was able to fulfill them. Influences society and is influenced by it.
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Entrepreneurs...
John Stuart Mill...describes an entrepreneur as abusiness founder
E
ntrepreneur is an organizer who is paid for hisnon-manual type of work.
Carl Menger ...Principles of Economics:³Economic change does not arise fromcircumstances but from an individual¶s awareness
and understanding of those circumstances Entrepreneur is the change agent who transforms
resources into useful goods and services, oftencreating the circumstances that lead to industrialgrowth.
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Menger¶s Model...Value Added
Priority 8...Grain in Field ...Low value
Priority 7...Bulk grain...Low value Intermediate Steps in Transformation
Priority 2...Bread at Bakery for sale...High
value Priority 1... Delivered baked bread...Highest
value
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Entrepreneurs...
In 19th century entrepreneurs were:
risk takers
decision makers
aspired to wealth
endured commensurate losses
gathered and managed resources to create newenterprises
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Entrepreneurship
Joseph Schumpeter...20th century talks
about ³creative destruction´ whereby
established ways of doing things are
destroyed by the creation of new and better
ways of getting things done
Described it as a process and entrepreneursas innovators who use process to shatter the
status quo through new methods...
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SOME OTHER VIEWS ON
ENTREPRENEUR
David McClelland ± An overwhelming need for
achievement and strong urge to build.
Collins and Moore - Driven by needs of
independence and achievement. They seldom are
willing to submit to authority.
Bird - They are cunning, opportunistic, creative,
and unsentimental.
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«contd
Cole - There are four types of entrepreneur
The innovator,
The calculating inventor The over-optimistic promoter, and
The organization builder.
These types are not related to the personality but to the type
of opportunity the entrepreneur faces.
Zhao & Seibert - meta-analysis between entrepreneur and
manager.
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Entrepreneurs...
Are not equal to inventors...inventor might
only create a new product, whereas an
entrepreneur will gather resources, organize
talent, and provide leadership to make it a
commercial success
Peter Drucker...´Resources, to produceresults, must be allocated to opportunities
rather than to problems...
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Entrepreneurs...
Peter Drucker
Innovation is the basic tool of entrepreneurs, the
means by which they exploit changes as anopportunity for a different business or a
different service.
Entrepreneurs need to search purposefully for
the sources of innovation, the changes and their symptoms that indicate opportunities for
successful innovation.
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ENTREPRENEUR
An entrepreneur searches for change, responds to
it and exploits opportunities. Innovation is a
specific tool of an entrepreneur hence an effectiveentrepreneur converts a source into a resource.
- Peter Drucker
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Entrepreneurs...
Peter Drucker«.
Three conditions have to be fulfilled:
Innovation at work ± requires knowledge and ingenuity
To succeed innovation must build on their strengths.
Innovation has to be close to the market focused
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Entrepreneurs...Traits
Self-confident and optimistic
Able to take calculated risk
Respond positively to changes
Flexible and able to adapt
Knowledgeable of markets Able to get along well with others
Independent minded
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Entrepreneurs...Traits II
Energetic and diligent
Creative, need to achieve
Dynamic Leader
Responsive to suggestions
Take initiatives
Resourceful and persevering
Perceptive with foresight
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Entrepreneurship
Is a dynamic process of creating
incremental wealth. This wealth is created
by individuals who assume the major risks
in terms of equity, time and career
commitment of providing value for some
product or service The entrepreneur must somehow infuse
value to the product or service...
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ENTREPRENEUR Vs
ENTREPRENEURSHIP
Entrepreneurs
People who create and grow enterprises
Entrepreneurship
Process through which entrepreneurs create
and grow businesses.
Opportunity idea translation creativity.
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ENTREPRENEURSHIP
Entrepreneurship - Onuoha (2007)
³the practice of starting new organizations or
revitalizing mature organizations, particularlynew businesses
generally in response to identified opportunities´.
Entrepreneurship ± Peter Drucker
³a systematic innovation, which consists in thepurposeful and organized search for changes,
and it is the systematic analysis of theopportunities such changes might offer for
economic and social innovation.´
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TYPES OF ENTREPRENEURSHIP
Social entrepreneurship.
Political entrepreneurship.
Knowledge entrepreneurship
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SEQUENTIAL STEPS
Types of ownership.
Name of the business.
Evaluation of the financial options.
Industry overview.
Market analysis.
Management plan.
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PILLLARS FOR
ENTREPRENEURSHIP
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FORMS OF ENTREPRENEURSHIP
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WHY ENTREPRENEURSHIP
To improve backwardness of the people.
Economic development of the region.
Proper utilization of human potentiality.
Special attention to take up new activities.
To create self-employment and generation of
employment opportunity.Eradication of regional imbalances.
Better economic gain.
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TYPES OF ENTREPRENUERS
Innovative Entrepreneurs.
Imitative Entrepreneurs,.
Fabian Entrepreneurs.Drone Entrepreneurs.
Solo Operators.
Active Partners.
Simply Partners.
Inventors.
Buyers.
Life timers.
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INNOVATIVE ENTREPRENEURS
Launches new products, discovers new markets,
establishes new methods of production and
restructures the enterprise.Can work only when definite level of progress has
been previously accomplished.
They focus on revolutionalisation and
development.
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IMITATIVE ENTREPRENEURS
Adopt victorious innovations launched by
the innovative entrepreneurs.
Duplicate the technology and techniques
innovated by others.
Suitable for underdeveloped countries.
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FABIAN ENTREPRENEURS
Exemplified by great caution and skepticism in
experimenting any change in the organization.
They imitate only in situations where it becomesnecessary to do so.
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DRONE ENTREPRENEURS
Drone Entrepreneurs suffer losses, as they refuse
to make any modifications in the existing
production methods.
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SOLO OPERATORS
These entrepreneurs basically work alone and if
required may recruit few people.
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ACTIVE PARTNERS
These entrepreneurs set up an enterprise as a joint
venture and they actively take part in the activities
of the organization.
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SIMPLY PARTNERS
These entrepreneurs contribute funds, but are not
involved in the operations of the enterprise.
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INVENTORS
These entrepreneurs are involved in the research
and development and innovative activities.
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BUYERS
These entrepreneurs in order to reduce risk buy an
already established and ongoing enterprise.
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LIFE TIMERS
These entrepreneurs take business as primary part
of their life.
Family enterprise falls into this group of entrepreneurs.
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FUNCTIONS OF AN
ENTREPRENEUR
Planning of the project
Managerial Functions
Assumption of Risks
Uncertainty and changes in all the aspects of business environmentBusiness Decisions
Nature of Goods
Type of Industry
Size of Business/ Location/ Techniques of Production etc
Functions of InnovationDistribution of Rewards
Sale of Products
Scale of Production
Joint stock Organization
Earn Profit
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PRODUCTION
SALES/MARKETING
FINANCETECHNOLOGY/ SYSTEM
HUMAN RESOURCES
ENTREPRENUER
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FUNCTIONS OF AN
ENTREPRENEUR
ENTREPRENEURINNOVATION EARNING PROFITS
RISK - TAKINGMANAGING ENTERPRISE
DECIDING THE PROJECT PLANNING PRODUCTIONRAISING FINANCE
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FUNCTIONS PERFORMED
Identifying entrepreneurial opportunity
Turning ideas into action
Feasibility study
Resourcing
Setting up of the Enterprise
Managing the enterpriseGrowth and Development
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Entrepreneurial Process
Entrepreneurial process is a leadership function which centers round thedynamics of entrepreneurial growth and change.
Stages of Entrepreneurial Process
First ± Change in the socio-economic environment
Second ± Starting a new venture
Third ± Intrapreneurship
Fourth ± Coordinating varied activities to achieve theentrepreneurial goal
Intrapreneurship is the process of extending the enterprises¶ domain of competence byexploiting new opportunities through new combination of its available resources.
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Discussion...
Suggest areas for new possible enterprises...
Compare concepts of entrepreneurship
discussed so far...
Explain entrepreneurship as a process and
the importance of innovation to that
process...
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Creative as a prerequisite to
innovation Creativity - is ³the ability to bring
something new into ex
istence Innovation - is the process of doing
new thing.
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The Creative Process
Idea Germination
Preparation
Incubation
Illumination
Verification
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The difference between invention
and innovation is:
Invention - is the creation of new products,
processes, and technologies not previously
known to exist.
Innovation - is the transformation of
creative ideas into useful applications by
combining resources in new or unusualways to provide value to society for or
improved products, technology, or services.
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Elements in the Innovation
Process Analitical Planning
Organizing Resources Implementation
Commercial Application