Chapter – 3

PERSONALITY OF AN ENTREPRENEURE / INTRAPRENEURE

The following qualities are considered to be some of the important ones for a successful entrepreneur on the basis of the research and experience of Behavioral Science Centre, Delhi and various other institutions involved in selection of candidates for entrepreneurial development programmes conducted by them.

High level of motivation Risk-taking ability Self-confidence and positive self concept Leadership qualities Business acumen Managerial competence Problem solving Flexibility Realistic approach to planning Independence of thought and action, and Ability to perceive opportunities and threats.

Personality of an Entrepreneur is more or less same as per various scholars in the area. Their are major points of view are discussed in detail now.

Defination of Intrapreneur

Intrapreneurs are generally defined as a person endoved with corporate success as moving up the hierarchy. In broader terms intrapreneurs are people functioning with the perview of an entreprenurial organization.

Intrapreneurship is the development, within a large corporation, of internal markets and relatively small autonomous or semiautonomous business units, producing products, services, or technologies that employ the firm’s resources in a unique way. It is something new for the corporation and represents, in its fullest manifestation, a complete break with the past. Intrapreneurship gives the managers of a corporation the freedom to take initiative and try new ideas. It is entrepreneurship within an existing business.Then companies recognize that individual could make major contribution without becoming manager –by inventing or making technical breakthroughs. Many innovative companies –IBM, Tektronic, 3M and Texas Instrument among them, thus created a second career path through which inventors could win prestige and salary increase without assuming management role.

Some people, however, have talent that neither of these career paths can develop. For them, intrapreneurship offers a third career path to bridge the gap between manager and inventor. Intrapreneurs, like entrepreneur, are not necessarily in new product or services. Their contribution is in taking new idea and even working prototype and turning them into profitable realities. When the ideas have become solid and functioning businesses, so

that even the least imaginative accountants can clearly see their value, Intrapreneurs tend to grow bored. At this point, they often need prove manager to maintain and develop business while they go back to building business while they go back to building new ventures for others to manage.

Intrapreneurship is corporate -entrepreneurship, whereby an organization seeks to expand by exploring new opportunities through new combinations of its existing resources. It is a tool for stimulating and capitalizing on individuals in an organization who believe that something can be done differently and better.

Hewlett - Packard is a company with a reputation for tolerating independent action. In its citation to Charles H. House who developed the moonlander monitor, it stated, “Medal of Defiance awarded in recognition of extraordinary contempt and defiance beyond the normal call of engineering duty”. This indeed reflects the spirit behind intrapreneurship. Intrapreneurs think about new business ideas while driving to work or taking a shower. They are thus innovators. The notion of an entrepreneur as an innovator was established in the early middle of the 20th century. Joseph Schumpeter in 1934 said, “the function of the entrepreneur pattern of production by exploiting an invention or, more generally an untried technological possibility for producing a new commodity or producing an old one in the new way, opening a new source of supply of materials or anew outlet for products, by reorganizing.”

Frequently entrepreneurship is thought to apply to creating and managing a small business. But Henry Mintzberg in 1973 expounded that the basics of entrepreneurship equally applies to large organizations through which they initiate changes to take advantages of opportunities. Peter Drucker stated that Innovation is the specific function of entrepreneurship. It is the means by which the entrepreneur either creates new wealth - producing resources or endows existing resources with enhanced potential for creating wealth. The term enterprise’s size or age but to certain kind of activity. At heart of that activity is

Innovation:

the effort to create purposeful focused change in enterprise’s economic or so potential. Gifford Pinchot is credited make a distinction between intrapreneur and entrepreneur. Specifically intrapreneur is a person focuses on innovation creativity and who transforms dream or an idea into a profit venture by operating within organizational environment contrast, the entrepreneur person who does the same outside the organization setting. In his book “Intrapreneuring”, he argues that intrapreneuring is not a phenomenon but one that been functioning despite the and present corporate sys He formulates some basic and strategies for executives want to nurture entrepreneurial spirit themselves and others in economic development of any country, intrapreneurship has certain distinct advantages in the corporate culture. To list a few:

Intrapreneurial ideas offer a way to build onto or improve the corporate business. Capital for the idea is easy to come from internal sources within a corporate identity. The established corporate image helps to boost the chances of success of an

intrapreneurial idea.

Corporates offer continuing access to the organization’s proprietary technology to stay competitive.

Corporates offer economics of scale in marketing, distribution and service. Corporates offer the unique advantage of multi- disciplinary team work. The intrapreneur retains the job security but as well enjoys the freedom and prosperity.

Vision

Intrapreneurs ride to the discovery of successful ventures on the strength of their vision. They possess y the ability to visualize the steps from idea actualization.

Motivation

Intrapreneurs want freedom. They are self-motivated but respond to corporate rewards and recognition. Money is not the incentive for their efforts, but rather the measure of its success.

Bias to act

Intrapreneurs by nature are action - oriented. Rather than remaining entangled in the cobweb of endless planning, they almost immediately start doing something to realize their dreams. The venture may take a few years, but they look for incremental achievements.

Skills

The Intrapreneurs business intimately. He is general manger to new business that does not yet exist. Intrapreneurs have generally marketing or technology background but once they take on the role of intrapreneur, they belong to neither. They take responsibility of all aspect business.

Locus to control Intrapreneurs generally dislike the system but they learn to live and manipulate it. They possess a doer personality.

Locus to risk

Intrapreneurs are moderate risk takers. They dislike uncontrollable risks and what they can to avoid then. Because of their self-confidence, they are more willing to accept risks that depend directly on their skills. If Intrapreneurs are wild risk takers, Corporates could not afford them.

Locus to status

Intrapreneurs do the mundane work that is part of every new project. Unlike managers, whose job is largely to delegate, Intrapreneurs often do things faster by themselves.

Failure and mistakes

Intrapreneurs are sensitive to need to appear orderly in the organization. They attempt to hide risky projects or ideas from view and ensure to learn from mistakes without political cost of public failure. They quickly adjust and develop a multi-disciplinary team within the organization. But if the situation demands, they over step the organizational boundaries with a bias for result.

Goal-setting

Intrapreneurs are self determined goal setters who often take the initiative to do things no one asked them to do. The inner-directedness extends not only to goal setting but also to setting quality standards.

Innovation

Intrapreneurs become dedicated to an idea. Commitment is the primary force behind successful innovation. Indeed it is this trait which makes an entrepreneur a strong visionary and an insatiable and the venture emerges. The typical corporate culture has a climate and reward system that favors conservative decision - making. Elaborate collection of data, market research, review committees, approvals etc. ensures an innovative idea a place in cold storage. The modern technology is creating a very competitive atmosphere. Innovative Intrapreneurs believe in doing their own things and on their own terms. They possess strong belief in their own talents,, they have a desire to create, they are enthusiastic to take responsibility, they have a strong drive for self-expression, they want freedom but above all they want their idea to take shape. The purpose of innovation is for being “Fustest with the Mostest”. In the internet age, if the size of your market is huge - you have an advantage. But if the size of your organization is huge – you have a liability. An Intrapreneurial climate has a flat organizational structure with net-working, teamwork, sponsors and mentors abounding. An eight point agenda is outlined below to create intrapreneurial environment in the corporates.

1. Research and Development

R & D efforts are key sources for successful new product ideas. It is an investment for sustainability and growth.

2. Funding

Corporates should set up venture funds. If a company can invest in other companies, Which can’t they invest in idea; which are surfacing from their own employees Corporates can be mentor strategic partner, service provider or even customer

3. Creating a climate

Corporates should define what an intrapreneurial culture means in different parts of their organization and as appropriate for their industry.

4. Training Corporates must conduct training for employees at different levels on how they behave in accordance wit intrapreneurial .values an motivational factor; developing their creative and innovative skill through brainstorming sessions and other mean; is a certain way to bring Corporate Policy Most organizationsencourage an idea that has a strategic fit with the company. However creativity has no boundaries. As such, there should be no initial opportunity parameter inhibiting a new idea. A different idea can be the nucleus for diversification.

6. Reward System Corporates should have a well defined and transparent reward system to encourage intrapreneurial ideas. “Stock Option” appears to be the best and most widely accepted approach. While rewarding the success, the failure should not be harshly penalized. This will create wrong and fear psychosis.

7. Multi-disciplinary Team

An idea can be converted into an enterprise only by critical viewing from all aspects. The role of a team comes in the second phase have to allocate people from different functions for an intrapreneurial project and reabsorb after the project is over.

8. Commitment Most important aspect is a commitment to intrapreneurship in the organization by top, upper and middle management level. Without top management commitment, the organization will never be able to go through all the cultural climate changes necessary for implementation. A long term horizon should be set to evaluating the success of the overall program. The spirit of intrapreneurship cannot be forced on individuals, it emerges on a volunteer basis provided the management creates the climate.

Intrapreneurship has brought a transformation in the developed countries. Hewlett - Packard, Dupont, AT & T, 3M, Xerox, Apple computers, G.E. and a large number of corporates attribute success to Intrapreneurs. Indian corporates are also emerging e.g. Ranbaxy, Dr.Reddy’s Las, Hindustan Lever, Telco, Mahindra & Mahindra, Apollo Tyres, Arvind Mills, Godrej Group, Titan, and amongst the new comers Infosys, Satya Computers, Tata Consultancy Services etc. Corporates need promote the culture of creating wealth from their employee gene pool and bring a much’ needed change in the way doing business.

Comparison between Entrepreneurial and

Intrapreneurial contexts

Parameters Intrapreneurial Characteristics Entrepreneurial Characteristics

Primary motives Freedom and access to corporate resources. Proactive but does respond

to corporate rewards and recognition.

Wants freedom. Goal oriented, self-reliant and self motivated

Time orientation Depending on venture, 5-10years. Looks for incremental achievements.

Depending on venture 5-10 years. Looks for incremental achievements

Skills and experience

Much like the entrepreneur, but doesn’t get discouraged by hierarchy.

Knows business very well and can put together resources.

Environments Same as entrepreneur plus must deal with corporate environment.

Macro-environment and microenvironment relevance.

Resources Derived primarily from slack within the Organization

Assembled and acquired from the factor markets for resources.

Failure and mistakes

Sensitive to corporate attitudes. May attempt to hide errors. Will learn from mistakes

Learns from mistakes. Pays for own errors. All errors public and visible.

Decisions Needs to get others to share vision. More willing to accept compromise.

Follows own vision and makes own decisions. May not compromise.

Attitude to bureaucracy

Dislikes the system but has learned to live with and manipulate it.

May have one done well in the system, but grew impatient and left to start own venture.

Risk preference Accepts moderate risk. Puts career and job on the line.

Accepts moderate risk. Has money, reputation in jeopardy.

Attitude to status Considers corporate symbols demeaning and worthless.

Willing to accept long period of low status venture is a success.

The Psychologist’s View

Schumpeter’s entrepreneur possesses three qualities. These are:

An institutional capacity to see things in a way which afterwards proves to be true A kind of effort of will and mind to overcome fixed habits of thinking

The capacity to surmount social opposition against doing something new. Such individuals who occur randomly in any ethnically homogeneous population are motivated by the dream and the will to found a private kingdom, the will to conquer, and the joy of creating.

David C. McClelland emphasizes the Achievement Motive, which is inculcated through child-rearing practices that stresses standards of excellence, maternal warmth, self-reliance training, and low father dominance. However, in a later study, he alters his position and ascribes changes in motivation to the ideological arousal of latent need for achievement among adults typically associated with a new sense of superiority. Thus, the achievement-oriented behavior may be possible to stimulate through training programs.

Hagen considers the withdrawal of status respect as the trigger mechanism for changes in personality formation. The status withdrawal occurs when members of some social group perceive that their purposes and values in life are not respected by groups in the society whom they respect and whose esteem they value. Hagen postulates four types of events, which can produce status withdrawal: Displacement of a traditional elite group from its previous status by another

traditional group by physical force; Denigration of value symbols through some change in the attitude of the superior

group; Inconsistency of status symbols with a changing distribution of economic power; and Non-acceptance of expected status on migration to a new society.

Kunkel’s behavioral model is concerned with the overtly expressed activities of individuals and their relations to the previously and presently surrounding social structures and physical conditions. The determinants of an individual activities are to be found largely in the conditioning procedures – both deliberate and accidental – to which he has been subjected in the past, and in the sets of reinforcing and discriminating stimuli which have become part of his behavioral chains and are part of the present social context. The selected elements of societal environment are open to change.

The Sociologist’s View

For Max Weber the driving entrepreneurial energies are generated by the adoption of exogenously supplied religious beliefs. It is these beliefs which produce intensive exertion in occupational pursuits, the systematic ordering of means to ends, and the accumulation of assets. He further suggested that the belief systems of Hinduism, Buddhism and Islam do not encourage entrepreneurship. However, this contention has been challenged and refuted by sociologists like Fox, Nandy and Singer.

Cochran emphasizes cultural values, role expectations and social sanctions. According to him, the entrepreneur represents society’s model personality. His performance is influenced by three factors: his own attitudes toward his occupation, the role expectations held by sanctioning groups, and the operational requirements of the job. Society’s values are the most important determinants of the first two factors.

The importance of culturally marginal groups in promoting economic development has also been underlined by some scholars like Hoselits. He hypothesizes that marginal men, because of their ambiguous position from a cultural or social standpoint, are peculiarly suited to make creative adjustments in situations of change and, in the course of this adjustment process, to develop genuine innovations in social behavior.

Stockes, in an explanation of how economically transitional societies produce industrial entrepreneurs, considers social and cultural values that channel economic action to be important. He sees it as a direct product of the way in which the entrepreneurial role is defined and comes to be defined, by collectivities, which are meaningful to the prospective entrepreneur. Why persons with strong needs to achieve should seek to act out these needs in economic activity is a function of cultural values and not of psychological disposition per se. He, therefore, suggests that personal and societal opportunity and the presence of the requisite psychological dispositions may be seen as conditions for an individual’s movement into industrial entrepreneurship, but it is the group-generated value matrix that channels him away from or toward such activity.

The Economist’s View

The economist’s view is a counter-hypothesis to all the viewpoints of entrepreneurial supply and is evident in empirical studies such as those of G. F. Papanek and J R. Harris. According to this view, the psychological drive for pecuniary gain or the desire to improve real incomes is present in all the societies. What matter is the economic environment. The economic incentives are regarded as sufficient conditions for the emergence of industrial entrepreneurs.

The Managerial Point of View

The fourth school of thought emphasizes the importance of managerial aspects. The emphasis here is on perception of market opportunities as well as operational skills to run an enterprise.

Kilby has recently provided an extensive sketch of the potential scope of the entrepreneurial task in an underdeveloped economy. He envisages that the entrepreneur himself might have to perform the following kinds of activities for the successful operation of his enterprise: Perception of market opportunities (novel or imitative). Gaining command over scarce resources. Purchasing inputs. Marketing of the product and responding to competition. Dealing with the public bureaucracy (concessions, licences, taxes). Management of human relations within the firm. Management of customer and supplier relations. Financial management. Production management records, supervision, coordinating input flows with orders,

maintenance. Acquiring and overseeing assembly of the factory. Industrial engineering (minimising inputs with a given production process). Upgrading processes and product quality. Introduction of new products.

Some of the activities in Kilby’s list are such as can be parceled out to competent subordinates, but that will depend upon;

The scale of production, The degree of development of the high-level manpower market, Social factors governing the amount of responsibility with which hired personnel will

perform and The entrepreneur’s comparative efficiency in utilizing high-cost managerial

employees.

It is a known fact that a vast majority of firms, in underdeveloped countries, are of small – and medium-size and factor input markets are also underdeveloped. Therefore, the demands placed upon the entrepreneurial unit are considerably more extensive in low-income as compared to high-income economies. Thus, the entrepreneurial roles may encompass all activities from the perception of economic opportunity to the external advancement of the firm in all its aspects. Certain tasks demand the entrepreneur’s critical attention, whereas others call for little, and can be safely delegated to subordinates.

Thus, as observed earlier, very theorist has looked at the problem on the basis of his specialty and therefore, can at best provide solution that is only wrong, or more or less useful in context to this theory. As so many explanations have been put forward, they

speak of their inadequacy independently. In fact, the various factors, which cause emergence of entrepreneurs, are integral and not additive. They are inter-looking, mutually dependent and reinforcing.

Some factors, which are sociological or psychological in nature, take a sufficiently long time to change, whereas others (like economic, political and legal factors) can be quickly manipulated to render an environment conducive to emergence of entrepreneurship.

It may, therefore, be concluded that given a degree of ambition and ability not uncommon to many individuals, certain kinds of experiences and situational conditions are the major determinants of whether or not an individual becomes an entrepreneur. At the beginning when people make the decision to start an entrepreneurial career, they are in most respects very much like many other ambitious, striving individuals. But the entrepreneurial interests for those who select that path are more a function of external differences than internal ones – more the result of practical readiness and cost/income constraints than of individual psychology or personality. This does not mean that starting a successful company is a game that anyone can play. It, however, means that far more people could become entrepreneurs than ever do, and that the inclination of people to move in this direction could be increased by an enhanced awareness and recognition of this as a career alternative. Efforts have been made in the book to examine the process of making of an entrepreneur, and the stages through which an individual normally passes to become an entrepreneur, so that there is a better understanding of the subject. This understanding can be utilized for vocational guidance for augmenting the supply of entrepreneurs so vitally needed for rapid economic development and reduction of unemployment in the country.

Indian Entrepreneurship surveyed in retrospect

The earliest research on Indian entrepreneurship dates back to 1750 when D. R. Gadgil emphasized the role of non-Indian businessmen in the Indian Industry. On the basis of his survey of the Indian political situation, conditions of agriculture, urbanization, trade activities and the business communities then prevalent, he concluded that India possessed a highly developed business community with respect to both national and international trade. Parsis

A.Guha traced the growth of the Parsi business community over a hundred years till 1850 and showed that Parsi mercantile capital was ripe for industrial transformation which was however curtailed by the then ruling power. He attributed the achievement orientation Parsis to their ability to adjust to the prevailing political situation rather than to a religious factor.

Gujrati

D. P. Pandit studied the development of entrepreneurship in the 19th century with particular emphasis to the Gujarati community and discarded caste or religion as having any relation to entrepreneurial activity as people of all communities and

religions were found in Indian industry. However, a regional preference could be seen here.

Marwaris

The Marwaris were another successful commercial and industrial community. In terms of asset accumulation they were better off than the Gujaratis. They were reported to have controlled 60 per cent of the assets in the Indian industry, more widely dispersed geographically and industrially than the Gujaratis.

It would be worthwhile to specially mention some special features of Marwari Entrepreneurship. One of them was a “Communal” credit network that enabled trading operations to move smoothly. Alan R. Cohen has described the “sarafi” system used by Marwari cloth traders in Banaras as follows:

Firms in the system borrowed from each other whenever short of cash, loans were payable on demand, even at midnight and interest was tallied and settled once a year, with total borrowing offset by total lending.

Community banks provided accommodation for goods in transit and remittance facilities. Community customs provided for apprenticeships in which youngsters could learn the technique of business, and profit-sharing scheme by which they could accumulate enough capital to start their own enterprise. Community or sometimes inter-community institutions existed for adjudicating commercial disputes.

This community also ran community hostels popularly known as Basas where members of their community could come, stay and engage in trading activities. This sort of support to encourage entrepreneurship is unique and confined to the Marwari community. The result is that because of community support a large number of Marwaris were developed as entrepreneurs.

Chettiyars:

The Chettiars formed an important part of the propertied class of Indians in Malaya. More than half of their total working funds was employed in Burma. After the change of U. Nu’s Government in Burma and the successor government’s policies of Burmanisation of the trade and industry, most of these Chettiars have returned back to India, where unfortunately they have not been able to establish themselves as successful entrepreneurs.

A.K.Bagehi, in a comparative study of European and Indian capitalist groups between 1900-1930, pointed out the domination of Indian economy by European capital and the discriminative colonial policy against entrepreneurs, particularly non-Parsi Indians. He disagreed with the popular notion that the lack of interest of Indian businessmen in Industry, due to low returns or a preference for liberal professions, was responsible for the late emergence of Indian entrepreneurship.

P.B.Medhora also attributed the cause for this backwardness to the colonial rule and repudiated the charge that religion inhibited entrepreneurship in India. He further established the profit-motive as the basic impetus towards entrepreneurship.

The role of the Managing Agency System was brought out by Andrew F. Brimmer who felt them to be the result of efforts of British and Indian entrepreneurs to overcome the limitations imposed by the shortage of venture capital and business ability. This system was however prey to intense legal discussions, whereby irresponsible agents made it to the limelight and the achievements of those who contributed positively to Indian industry were glossed over.

H.B.Lamb acknowledged the concentration of entrepreneurship within certain communities in the early post-Independence phase and proposed explanations for this phenomenon. She further noted that these business communities are currently becoming less distinct. She anticipated a further communal equality in Industry through geographical relocation with the development of infrastructure and the succumbing of present-day large industrial families to the inevitable pressure of a culture that looks down on entrepreneurship. These findings have not been fully borne out by research, as Gujaratis and Marwaris continue to dominate the industrial scene.

In the opinion of Hemlata Acharya, regional analysis does not offer a complete explanation for the rise of the business class in Gujarat as the indication of a definite correlation between castes of business tradition and their involvement with industry.

V.I. Pavlov studied the process of formation of the Gujarati and Marwari business communities and analyzed their rise to the upper strata of Indian intelligentsia.

Howard Spodex describes the evolution of entrepreneurship in the textile industry at Ahmedabad and the movement of ‘old money’ into industry, which was demonstrated successful by a Brahmin or Patel. Gradually these communities were joined by Jains, Banias and Parsis in industry and the profits of one undertaking were applied to the further development of industry. Spodek highlights the paradox of conservative Ahmedabad industry sprouting pioneers like Sarabhai who are renowned for their innovativeness.

M.D. Morris again demolished the popularly held belief that Indian values and social structure were obstacles to the growth of Entrepreneurship. He commented on the inter-jati cooperation in Ahmedabad and Bombay enterprises and further felt that the high degree of dynamism displayed by Indian society did not warrant any definite predictions on the influences of caste on economic change.

D. Tripathy believed that neither sociological factors nor the policies of the British Government were responsible for the economic backwardness in India. He lays emphasis on factors like

Political unity, Effective communication system, Property protection, and

Customs barriers, varied currency systems and the like.

He observes the change in the Hindu class structure because of the entry of non-business classes into industry. He was of the opinion that if entrepreneurship is a response to the perceived dis-equilibrium between opportunities available and the extent of their exploitation, it is the forces leading to the perception of new opportunities that requires to be studied.

ConclusionFrom the above researches, it is immediately apparent that while there is no consensus whatsoever regarding the role of religion and caste system in the determination of development of Entrepreneurship. Most researchers agree on the profit-motive as an incentive and the existence of colonial rule as an impediment to entrepreneurship in India.

Social Values Related to Entrepreneurship

The spirit of entrepreneurship and its effectiveness is to a large degree affected by the prevailing climate of religion, social values and culture.

While on the one hand Hinduism has been tradition bound, on the other it is equally true that it has never been static. In accordance with the exigencies of time and circumstances, it has displayed a power of adaptation, which is highly remarkable. This has led to the emergence of new sub-sects and philosophies without creating a conflict.

At the level of social values, the basic social structure of the Indian society is the one defined by the caste system. The leaders of the society were the Brahmins whose main objective was pursuit and dissemination of knowledge. The Hindu culture is basically opposed to acquisition of wealth. The Brahmins though they acquired considerable knowledge used it only for advising the ruling class.

The vaishys used financial instrument like Khojas and Kacchi Memons in conducting the affairs trading. They participated both in internal as well as in international trade with the Persian Gulf, Arabia, Africa, and Malaya, Indonesia, etc. Certain communities did well as far as entrepreneurial activities were concerned. The Marwaris were successful commercial and industrial community. For example, the 147 large enterprises owned by Marwari groups on the monopolies Inquiry Commission’s list included 23 jute mills, 34 cotton textile mills, 11 sugar mills, 8 cement factories and interests of one sort or another in almost every line of endeavor, thereby reflecting diversification.

Parsis who migrated to Gujarat from Persia in the 8th century had vocations like artisans, carpenters, weavers, etc., in the 11th century. Their overseas trade was in yarn and opium. By 18th century they had established merchant houses in Bombay, Burma, China and England. They also acted as brokers for European traders. Because of their style of living, which was more in line with Europeans, they were preferred for representing the European businessmen. While most of the Parsis engaged themselves in trading, this

community produced such industrial entrepreneurs as Jamshedji Nasarvanji Tata, who established a steel mill in far-away Jamshedpur in Bihar. He laid the foundation of the famous Tata House or the Tata group of companies. This group had occupied the top position asset-wise amongst the private sector groups for a long time. However, the Parsi community now seems to be stagnating and shrinking showing very little entrepreneurship. Most of the members of this community now prefer stable jobs as professionals, to being entrepreneurs.

In South India Chettiars form the trading caste. One of the sub-castes Nattukottai Chettiars were the chief bankers and financiers of South India. These trading communities had their trade connections with the South-East Asian countries like Burma, Ceylon, Malaya, Singapore, etc. On the West Coast of South India, the trade was mostly in the hands of Syrian Christians and Mohammedan merchants (Moplahs). As the trading monopoly of the East India Company faded and finally vanished after 1857, many of the Christians prospered as merchants in the benign atmosphere of Victorian free trade. In the 19 th

century they promoted native joint stock banks.

In Bengal, “Subarna Baniks”, who were the counterparts of ‘banias’ in other regions, specialized in trade and commerce. The average Bengali received an English education and joined mercantile houses as well as administrative services. Movements towards entrepreneurship were limited.

Besides these trading communities, there were some like the Bhatias, Lohanas and Khatris, who were actively engaged in entrepreneurial activities, mostly trading and were spread all over the country.

There are innumerous example of entrepreneurship in India that could inspire the present day entrepreneurs. Even in the recent past there have been a good number of entrepreneurs, Dhirubhai Ambani of Relaince Industries Ltd. Kursonbai of Nirma Industries Ltd., Azim Premji of Wipro , Narayan Murthi of Infosys Ltd. are some of them.

As a potential entrepreneur you to have respond to following questions:

Are you prepared to put in hard work for achieving your goal? Do you possess a strong will power to face and overcome the difficulties and setbacks

and make the enterprise successful? Is your family environment congenial to leaving the traditional family occupation and

undertaking a new venture? Are you prepared to wait if it takes time to get the results of your efforts?

As entrepreneur’s managerial skill, drive, ingenuity, resourcefulness and dogged determination are a small-scale industry’s major sources of strength. The entrepreneur has to plan, organize, direct subordinates and control their performance. He is not afraid to pitch in personally whenever an operational task requires additional effort. Thus,

small-scale businessmen have to spend more time at work. They cannot have the strictly 10 o’clock –5 o’clock schedule.

Generally, the various managerial and operational responsibilities in small-scale business are not neatly segregated and assigned to different persons. An assortment of tasks and activities are either performed by just one person or are assigned to different employees at different times. These operating conditions, typical of most small-scale firms, reflect the inter-relatedness of the functional activities of a business enterprise much more explicitly than do the conditions in larger firms.

Any small company, which ignores sound management practice, will sooner or later become sick and eventually fail. Effective business management is a must whether you are in large scale or small-scale business. But, it would be the biggest folly if you start using blindly all the business management practices of a large enterprise in a small-scale business. We have already assessed the difference in small-scale and large-scale business. The functional environment of the business changes with the scale of business. Therefore, imitating or implementing the style of one in the other could cause problem.

Enterprise Planning:

For the success of an entrepreneur and subsequently his enterprise, planning is the most significant factor. Entrepreneurs’ starts planning their ventures much ahead of the time when they take shape sometimes in his teens. They plans and consciously make endeavors to achieve their dreams.

Planning is an important management tool in any organisation, large or small. Any organization’s success depends on how well its management is able to use this tool of planning. Actually one of the most serious operational problems for small business is lack of effective formal planning.

One example will clarify.

In one year alone in a country like USA where strong management is wide spread in all sectors of economy, there were about 20,000 small business firms that failed every year. The estimated loss due to their failure was over three billion dollars. Researchers have found that 90 per cent of these failures could be attributed to lack of planning, inexperience. Only a few are accounted for by neglect, fraud, and disaster. This explains the importance of planning.

Now the question is why planning is neglected in small business firms. The answer, generally, is that small firms are relatively simple. It is not very unusual to hear managers of small businesses frequently telling, “My business is simple and I know what the problems are!” Such owner-entrepreneurs consider that planning is a luxury, meant only for large-scale enterprises with surplus of resources. They feel that for managers in the small-scale sector it is better to use rules of thumb and not waste scarce resources in such avoidable luxuries like planning. They, unfortunately, are grossly mistaken.

The second important reason is that the entrepreneurs, who keeps everything in his head and does not feel the necessity of formalizing it, create problems for most small firms.

Another reason is that most small firms have a short-range orientation where the management tends to focus on day-to-day survival and bothers little about the growth of the company. He is a fire fighter who tries to fight the battles of survival. By proper planning the need for such fire-fighting exercises could be eliminated.

Though entrepreneurs are able to plan their entrepreneurial venture well in advance, they fail when it comes to actually planning the day to day running of business. Small business entrepreneurs/executives frequently lack planning skills. As they are small they also do not have the staff support which a large enterprise generally has. In large organizations they have corporate planners and full-fledged corporate planning departments, which are unheard of in small firms. Therefore, they are unable to anticipate the needs of the environment and fail to make provision for the same.

These obstacles are the reasons for the low planning intensity or adhocism among firms in the small-scale sector. However, it must be realized that unless these obstacles are overcome small-scale industrialists would be only moving towards failure for want of planning.

What is planning?

Planning process involves:

The development and specification of a balanced set of organizational objectives;

A realistic assessment of the organization’s internal resources; an objective evaluation of the external environmental conditions that affect the organization.

An analysis of the organization’s situation as compared with its direct competitors.

On the basis of these three sets of information a systematic investigation of a firm’s internal, external, and competitive situation, managers become aware of the firm’s opportunities and risks, strengths and weaknesses. Taking into account their personal value orientations, managers can then relate the specified objectives to the observed opportunities and risks. This matching process leads to the development of strategies for achieving the organization’s objectives by fully exploiting opportunities and strengths while averting or minimizing risk and weaknesses. Each systematic approach to planning has to go through such a process.

Approaches to planning

In general the smaller the firm and more limited its experience of systematic formal planning, the simpler must be its first approach to planning. Therefore, the manager of the small firm should start with simple, uncomplicated approach to planning and increase

sophistication as the firm’s planning experience and its management planning skills improve.

The first step in developing a formal comprehensive planning system in a small firm is to analyze those forces that are of critical importance for achieving success. Every firm is subject to a variety of internal and external forces that are potential obstacles or constraints on an organization’s achievement of its desired objectives. As an uncomplicated approach to planning, small business managers should start with identifying and evaluating those strategic factors that are hindering their firm from reaching its potential.

Once these factors are identified, the next step is to search for the ways to overcome these problems. George Steiner developed a list of over 70 items that may be of critical importance to a company’s success. An entrepreneur needs to identify specific problem areas, assessing the significance and severity of the problems and planning actions.

Focussing attention on critical strategic factors is an appropriate way for small-scale industries to start developing a formal planning effort. The advantages of such planning are;

It does not require an elaborate planning organisation; It does not require any extensive or exact quantification of the strategic factors under

consideration; It leads to a better understanding of the interdependencies of the various strategic

issues; It leads the planner to a recognition of the urgency of the crucial problem areas that

require planned change; It provides a basis for the development of remedial action; and It can be used as a communication device to get information from the employees as

well as to inform them about planned activities.

A small industrial entrepreneur should, at regular intervals, complete the exercise of assessing the level of competence for each factor and decide on an action plan to improve competence, where the levels are low. Some factors may be more important for a particular firm. Needless to say that those factors shall get priority over others in deciding and implementing the action plans.

Conclusion:Entrepreneurs are self –driven proactive people who are not restrained by the boundaries of caste and creed. The main motive for them personally is self –actualization and profit-motive for business. Most the time starting an enterprise is easy as the dream of enterprise launch is germinated and cultured in the minds of entrepreneurs much before it takes actual shape. The critical time however, starts afterwards when the enterprise and entrepreneur needs to sustain.

For sustenance and growth of a strong enterprise a very sound planning is needed.