THE ENTREPRENEURSHIP PERSPECTIVES

GROUP MEMBERS Hemant Adhikari 1001 Rushikesh Bhoir 1003 Ashish Bodani 1004 Rahul Iyer 1013 Shweta Kanabar 1016 Akshay Naik 1024 Sonal Patil 1031 Neha Phadke 1033 Aishwariya Pillai 1034 Nikhil Ray 1041 Shobita Lakshmanan 1051

FLOW OF PRESENTATION

1.1 Concept of Entrepreneur, Entrepreneurship and Enterprise Advantages of Entrepreneurship1.2 Nature & Development of Entrepreneurships1.3 Personality of Entrepreneurs/Intrapreneurs1.4 Innovation & Entrepreneurship1.5 Women & Entrepreneurship1.6 Entrepreneurship in Rural Areas

ENTREPRENEUR

The word entrepreneur is derived from the French verb enterprendre. It means “to undertake.”

Francis A. Walter observes that the true entrepreneur is one who is endowed with more than average capabilities in the risk of organizing & co-ordinating the various other factors of production.

The New Encyclopaedia Britannica considers an entrepreneur as “ an individual who bears the risk of operating a business in the face of uncertainty about the future conditions.”

INDIAN ENTREPRENEURKENT CARSName Chandan SumayaAge 34 yearsEducation B.Com,H.R. College, Bombay, 1981Work experience Helped his uncle operate a car rental serviceInitial Investment Rs 30,000Track Record Turnover has grown from zero in 1985 to Rs 4.50

crore in 1994-95No. of Employees 252Work Style Hands-onManagement Philosophy

Never say no to a client

Hobbies Working out, swimming, watching Amitabh Bachchan movies

QUALITIES OF A ENTREPRENEUR

Desire for responsibility Moderate Risk Confidence in their ability to suceed High level of energy Future Orientation Skills at organising High degree of commitment Tolerance for Ambiguity/ Flexibility

ENTREPRENEUR AGE STUDY

AGE % age of Entreprenuers< 20 1%

20-24 8%25-29 17%30-34 21%35-39 18%40-44 15%45-49 9% 50-54 7%55-59 3%60-64 1%

80%

REASONS FOR FAILURE

FACTORS % Economic Factors 47.7%Financial Troubles 38.4%

Inexperience 7.1%Owner Neglect 3.4%

Other Disasters & fraud 3.7%

Other Problems are:-Uncertainty of IncomeRisk of loosing your entire life savingLow Quality of LifePressure builds upHealth affected

DEFINITIONS OF ENTREPRENEURSHIP

According to Peter P Drucker, “Entrepreneurship is neither a science nor an art. It is a practice. It has a knowledge base. Knowledge in entrepreneurship is a means to an end; that is, by practice.”

According to William Diamond, “Entrepreneurship involves the willingness to assume risks in undertaking an economic activity particularly a new one. It may involve an innovation but not necessarily so.It always involves risk taking & decision- making, although neither risk nor decision making may be of great significance.”

DEFINITION OF ENTERPRISE

A project or undertaking, especially one that requires boldness or effort.

Readiness to embark on new ventures; boldness and energy.

ADVANTAGES OF ENTREPRENEURSHIP

Employment Generation Distribution of Economic power Optimum Utilization of regional resources Meeting the demand gap by seizing the opportunity Export potential Regional Development

1.2 NATURE & DEVELOPMENT OF ENTREPRENEURSHIP

NATURE OF ENTREPRENEURSHIP Entrepreneurship collectively has the power to change

the destiny of family, city, state or the country as a whole.

Eg.The rate of economic growth in Punjab & Haryana has been very high. Had all the states fared well as these two states, India could have become one of the strongest economic powers.

Punjab & Haryana have built-up a very strong entrepreneurial base whereas other states have not been able to do so.

DEVELOPMENT OF ENTREPRENEURSHIP Earlier restricted to certain communities like Marwaris,

Baniyas, etc. Recently, SIDC and SSI institutes have made some

efforts to train entrepreneurs. Also, they conducted short term courses to develop

entrepreneurial capabilities in selected trainees. But there seems to be something wrong with these

projects.

REASONS FOR LIMITED SUCCESS IN NURTURING ENTREPRENEURSHIP General lack of entrepreneurs in the country,

Government’s effort notwithstanding. In rural India, people prefer jobs for self-employment. Need for research and re-strategizing these development

schemes. Problems in selection process itself. The candidates

selected for such courses are those who have failed to get jobs and hence have nowhere else to go.

Also, the widespread value system within the country, where the first preference for any qualified man is to get job, preferably a government job.

So, these institutes could take a few initiatives such as:

Entrepreneurship should be made a compulsory subject in all management schools. In addition, cases on successful entrepreneurs should be developed and run in these management courses.

Project work related to a proposed entrepreneurial venture should be introduced. At Asian Institute of Management, Manila, the student does not pass unless he submits a Xerox copy of the cheque issued by the bank approving the feasibility report prepared by him.

Regular talks by successful entrepreneurs should be organized at these institutes.

Successful entrepreneur-alumni will be more impactful in nurturing entrepreneurship in management students.

These institutes should start Entrepreneurship Centers to do research on the subject and recommend policy measures to strengthen entrepreneurship in management students.

Such a center has been established at one of the Indian Institute of technology to convert engineers into entrepreneurs.

FACTORS INFLUENCING ENTREPRENEURSHIP

FACTORS INFLUENCING ENTREPRENEURSHIP CONTD…

The Individual: Individuals who initiate, establish, maintain & expand new enterprises generate entrepreneurship in a society.

Environment: This factors is constituted by the socio-political & economic policies of the government & financial institutions & the opportunities available in society as a result of such policies.

FACTORS INFLUENCING ENTREPRENEURSHIP CONTD…

Socio-cultural factors: Entrepreneurs grow in the traditions of families & societies & internalize certain values & norms from these sources. The contribution from these socio-cultural factors, in the process of transmission, gets filtered through the individual whom it seeks to influence.

Support systems: It include financial & commercial institutions, research, training, extension &consultancy services, as also large industrial units interested in developing ancillary industries.

DEVELOPMENTAL THEORY OF ENTREPRENEURSHIP

Process of Occupational Choice Theory put forwarded by Ginzberg, Axelrad, Herma

and Ginsberg. As per them, Occupational Choice has 3 periods:1. Fantasy Period2. Tentative Period3. Final Period of Realistic Choice

A general process of Occupational Process can be shown as follows:

Fantasy Period Tentative Decision-making Period

Stage of Exploration & preparation for

implementing the decision

Free expression of a wish without any consideration of expediency.

Interest: includes all vocations which appeal to the individual.Preference: involves comparison of relative attractiveness to the subject of several vocations.

Crystallised choice very close to the decision.

In case of entrepreneurship, one visualises the beginning of another cycle.

This cycle is shown as follows:

In case of failure in trial stage, An individual goes back to exploration stage &

makes preparation for implementing a new decision – may be for taking up a job.

Trial Stage Commitment & Stability Stage

Model for Entrepreneurship Development:First Cycle Second Cycle

N-achieve stories in text books

Entrepreneur Family’s Support

Organizational Development Consultancy

Fantasy Stage Tentative decision making

Stage of exploration to implement the decision

Trial Stage Commitment & Stability Stage

N-achievement stories through mass media

Entrepreneur Journals/ Institutions providing information about entrepreneurial opportunities

Support systems of the Government

Organizational Development Consultancy

First Cycle Second Cycle

Model for Entrepreneurship Development

Developmental Theory of Entrepreneurship consists of

following 5 stages:

1. Fantasy Stage

2. Tentative Decision-making Stage

3. Stage of exploration to implement the decision

4. Trial Stage

5. Commitment and Stability

1.3 PERSONALITY OF ENTREPRENEURS/ INTRAPRENEURS

AN ENTREPRENEUR’S PROFILE The Psychologist’s View Schumpter’s entrepreneur possesses three Qualities.1. An institutional capacity to see things in a way which

afterwards proves to be true.2. A kind of effort of will & mind to overcome fixed

habits of thinking3. The capacity to surmount social opposition against

doing something new.

AN ENTREPRENEUR’S PROFILE CONTD… The Managerial Point of view Kilby has envisages that the entrepreneur himself might

have to perform the following activities 1. Perception of market opportunities2. Gaining command over scarce resources3. Purchasing Inputs4. Dealing with the public bureaucracy (concessions,

licenses, taxes)5. Management of human relations within the firm6. Management of customer & supplier relations7. Introduction of new products

INTRAPRENEUR

An Intrapreneur is defined as “any of the dreamers who do”. Those who take hand on responsibility for creating innovation of any kind within the organisation.

The Intrapreneur may be creator or inventor but he is always a dreamer who finds out how to turn an idea into a profitable reality

ADVANTAGES OF INTRAPRENEURSHIP

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 organization’s proprietary technology to stay competitive

Corporates offer economies of scale in marketing, distribution & service

AN INTRAPRENEUR’S PROFILE

Vision Motivation Bias to Act Skills Locus To Control Locus To Risk Locus To Status Failure & mistakes Goal- setting

CREATING INTRAPRENEURIAL ENVIRONMENT

Research & Development Funding Creating a climate Training Reward System Multi-Disciplinary Team Commitment

COMPARISONParameters Intrapreneurial characteristics Entrepreneurial Characteristics

Primary Motives Freedom & access to corporate resources

Wants freedom. Goal oriented, self, reliant & self motivated

Time Orientation Depending on venture, 5-10yrs. Looks for incremental investments

Depending on venture 5-10 yrs. Looks for incremental investments

Skills & experience

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

Knows business very well & can put together resources.

Environment Same as entrepreneur. Must deal with corporate environment.

Macro- environment & micro environment relevance.

Resources Derived primarily from slack within the organization

Assembled & acquired from the factor markets for resources.

Failures & mistakes

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

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

COMPARISON CONTD…Parameters Intrapreneurial Characteristics Entrepreneurial Characteristics

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

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

Attitude to bureaucracy

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

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

Risk Preference

Accepts moderate risk. Puts career & job on the line

Accepts moderate risk. Has money, reputation in jeopardy.

Attitude to status

Considers corporate symbols demeaning & worthless

Willing to accept long period of low status

1.4 INNOVATION & ENTREPRENEURSHIP

Innovation is the process of doing new things. Ideas have a little value until they are converted into products services or process. Innovations, therefore, is the process of transformation of creative ideas into useful applications.

It is the means by which entrepreneur either creates new wealth-producing resources or endows existing resources with enhanced potential creating wealth

INNOVATIONS & PROFITS: JOSEPH SCHUMPETER’S THEORY OF PROFITS

Innovations can be divided into two categories 1.Reduce the cost of production 2.Increase the demand for the product

Role of an Innovator Role of Profits Breaking of the circular flow

INSTILLING ATTITUDE FOR INNOVATION

Encourage Creative Conflict Big Ideas come from small teams Learning happens away from the desk Understand the Product’s User Live in the future Failure sometimes produces Innovation Joint Prototyping to brainstorming for fast-track

Innovations Results

MEMORIZE THE PROJECT LEADER’S MANTRA

Understand Observe Visualise Evaluate Implement Teams Need Leaders & Mentors. They don’t need

bossess Fresh ideas occur faster in a fun workpace

SOURCES OF INNOVATION:PETER F.DRUCKER

Opportunity exist within a company in the form of the following

1. Unexpected occurrences2. Incongruities3. Process needs4. Industry & market changes Outside the company 1. Demographic changes 2. Changes in perception3. New knowledge

1.5 WOMEN ENTREPRENEUR

Government of India, "An Enterprise owned & controlled by a woman having a minimum financial interest of 51 % of the employment generated by the enterprise to women.”

Kamal Singh, “A woman entrepreneur can be defined as a confident, innovative & creative woman capable of achieving self economic independence individually or in collaboration, generates employment opportunities for other through initiating, establishing & running the enterprise by keeping pace with her personal, family & social life.”

TYPE OF WOMEN ENTREPRENEURS

Chance entrepreneur Forced Entrepreneur Created Entrepreneur

PHILIPPINES MODEL

In this model, they are able to develop” Entrepreneur Couples”.

Two classmates would get married in the final year. The husband will work & the wife starting a small stores.

The income of the husband was utilized for managing the household & educating children.

The income from the stores was reinvested to expand the business, when the store become big departmental stores, the husband would usually resign the job & join the store as President of the company, the wife becoming its treasurer.

WOMEN ENTREPRENEURS IN INDIA

A majority of women Entrepreneurs are married Unmarried women face difficulties in getting financial

support in order to launch their enterprise. Most of the women entrepreneurs lack vocational

training Gender discrimination Women entrepreneurs are security-oriented rather than

growth-oriented

BARRIERS TO WOMEN ENTREPRENEURSHIP

LevelBarriers

Individual Household/Family

Business Community/Government

Financial Women look for security

Men decide about expenses

Less income= less property= no security= no loan

In some countries, signature of husband required for loan

Economical Women get less education

Women lack support for household work

Lack of management know-how

Women discriminated in terms of access to economic resources

Socio-Cultural

Independent thinking is not allowed to women

Violence against women by husband

Limited mobility – problems with the marketing, transportation & selling of goods

In male dominated industries, women entrepreneurs are not accepted

BARRIERS TO WOMEN ENTREPRENEURSHIP

Level

Barriers

Individual Household/Family

Business Community/Government

Political-Legal Women act privately, not politically

Women have got less influence and negotiation power in the family

Less means to exert power/less protection by the state for women entrepreneurs

Lack of knowledge about women Entrepreneurs to be able to develop appropriate policies

Psychological-Philosophical

Low self-esteem, do not dare to demand rights

Women are divided

Women are afraid to be more successful than men/husbands

State views men as the ones who publicly represent the family

PROGRAMMES FOR PROMOTING WOMEN ENTREPRENEURSHIP

Small industries Development Bank of India(SIBDI)-Subsidiary of IDBI

Provides schemes 1. Organizing EDPs for women 2. Providing seed capital- A woman entrepreneur has to bring in a margin money

only at 10 % percent of the project cost, SIDBI provides 15% as margin money at low interest& arranges a term loan of 75% to start the project

PROGRAMMES FOR PROMOTING WOMEN ENTREPRENEURSHIP

CONTD… Mahila Arthik vikas Mandal (MAVIM) In Maharashtra, this is the agency promoted by state

government which looks after entrepreneurial development.

Women Associations Such as WIMA-Women Industrialists & Entrepreneurs

of Maharashtra Association of women Entrepreneurs of Karnataka

(AWEK)

PRIYA PAUL

Priya Paul (born 1967), is a prominent woman entrepreneur of India, and currently the

Chairperson of Appeejay The Park Hotels chain of boutique hotels.

She joined the company, after finishing herstudies in Economics at the Wellesley College (US) working under her father, as Marketing Manager at the Park Hotel, Delhi, at the age of 22.

After the death of Surrendra Paul, she succeeded him in 1990 as the Chairperson of the Hospitality Division of the Apeejay Surendra Group.

PRIYA PAUL CONTD…

She has received several awards and citations, including the following: The Federation of Hotels and Restaurants Association

of India conferred on her Young Entrepreneur of the Year award (1999‐2000)

She was nominated for The Economic Times Awards as the Businessperson of the year (2002‐2003), and

UK’s Tatler magazine rated The Park (Bangalore, India), a part of her Group, as one of the 101 Best Hotel Worldwide in 2003.

1.6 ENTREPRENEURSHIP IN RURAL AREAS

70 % of our population is in rural areas Around 7,00,000 villages in the country where the

population is less than 10,000. Majority of people do agriculture which is seasonal

occupation. Thus leaves a large number with no work & abject poverty.

Rural population with no education & skills migrates to urban centres & take up menial jobs, stay in slums.

The solution to above problem is to encourage the rural entrepreneurship

RURAL DEVELOPMENT

Better distribution of farm produce resulting in the rural prosperity

Entrepreneurial occupation for rural youth resulting in reduction of disguised employment & alternative occupations for rural youth

Formations of big cooperatives like Amul for optimum Utilization of farm produce.

Optimum utilization of local resource in entrepreneurial ventures by rural youth.

PROFILE OF A RURAL ENTREPRENEUR

He should not be an individualist. He should have a group orientation. He should consider the rural society nota as his market but as his own large family.

He should practice a management style where the concern for people is the highest.

He should have strong commitment for rural development

He won’t be interested in usual perks & entertainment allowance

AMUL MODEL

This Initiative was started by Dr.Kurien The Gujarat Experiment was started more than 30 years

ago. Starting from small complex of eight societies which

collected only a few hundred litres of milk it has grown into a huge complex collecting nearly 7 lakh litres of milk per day from 2,40,000 members organized into 840 village societies.

Today 90% of the processed butter & cheese market of the organised sector in the country is controlled by AMUL.

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