UNIT – I

ENTREPRENEUR AND ENTREPRENEURSHIP

DEFINITION OF ENTREPRENEUR.
An entrepreneur is an individual who creates a new business, bearing most of the risks and
enjoying most of the rewards. The entrepreneur is commonly seen as an innovator, a source of
new ideas, goods, services, and business/or procedures.
MEANING
Entrepreneurs play a key role in any economy, using the skills and initiative necessary to
anticipate needs and bring good new ideas to market. Entrepreneurs who prove to be
successful in taking on the risks of a startup are rewarded with profits, fame, and continued
growth opportunities. Those who fail, suffer losses and become less prevalent in the markets.
DEFINITION:
Someone who exercises initiative by organizing a venture to take benefit of an opportunity and,
as the decision maker, decides what, how, and how much of a good or service will be produced.
An entrepreneur supplies risk capital as a risk taker, and monitors and controls the business
activities. The entrepreneur is usually a sole proprietor, a partner, or the one who owns the
majority of shares in an incorporated venture.

CONCEPT OF ENTREPRENEURSHIP:
The word “entrepreneur” is derived from the French verb enterprendre, which means ‘to
undertake’. This refers to those who “undertake” the risk of new enterprises. An enterprise is
created by an entrepreneur. The process of creation is called “entrepreneurship”.
Entrepreneurship is a process of actions of an entrepreneur who is a person always in search of
something new and exploits such ideas into gainful opportunities by accepting the risk and
uncertainty with the enterprise.

ENTREPRENEURSHIP
Entrepreneurship is the act of creating a business or businesses while building and scaling it to
generate a profit. However, as a basic entrepreneurship definition, it’s a bit limiting.

The more modern entrepreneurship definition is also about transforming the world by solving big
problems. Like initiating social change, creating an innovative product or presenting a new life-
changing solution. What the entrepreneurship definition doesn’t tell you is that entrepreneurship
is what people do to take their career and dreams into their hands and lead it in the direction of
their own choice. It’s about building a life on your own terms. No bosses. No restricting
schedules. And no one holding you back. Entrepreneurs are able to take the first step into
making the world a better place, for everyone in it.

CHARACTERISTICS OF A SUCCESSFUL ENTREPRENEUR:

Some business experts suggest that the entrepreneurial drive is innate, a trait acquired at birth,
while others believe that anyone can become an entrepreneur. Whether a person is born to it or
develops it, there are characteristics and traits required for successful entrepreneurship. 

Independent thinking - Entrepreneurs often think outside the box and aren't swayed by others
who might question their ideas.
Optimism - It's difficult to succeed at anything if you don't believe in a good outcome.
Entrepreneurs are dreamers and believe their ideas are possible, even when they seem
unattainable.

Self-confidence - This is not to say entrepreneurs never have self-doubt, but they're able to
overcome it, and believe they can achieve their goal.

Tenacity and ability to overcome hardship - Entrepreneurs don't quit at the first, second or
even hundredth obstacle. For them, failure is not an option, so they continue to work toward
success, even when things go wrong.

Vision - Some of the more stringent definitions of entrepreneurship include vision as a

necessary element. It helps to know your end goal when you start. Further, vision is the fuel that
propels you forward toward your goal.

Focus - It's easy in this fast-paced, constant info-in-your-face world to get distracted. This is
especially true for business start-ups that often get side-tracked by the shiny object syndrome
(i.e. products and services that promise fast results), or bogged down in unimportant busywork.
Successful entrepreneurs are focused on what will bring results.

Action-oriented - Entrepreneurs don't expect something from nothing, and they don't wait for
things to happen. They are doers. They overcome challenges and avoid procrastination
Creativity:
Creativity gives birth to something new. For without creativity, there is no innovation possible.
Entrepreneurs usually have the knack to pin down a lot of ideas and act on them. Not
necessarily every idea might be a hit. But the experience obtained is gold.
Creativity helps in coming up with new solutions for the problems at hand and allows one to
think of solutions that are out of the box. It also gives an entrepreneur the ability to devise new
products for similar markets to the ones he’s currently playing in.

Professionalism:
Professionalism is a quality which all good entrepreneurs must possess. An entrepreneurs
mannerisms and behavior with their employees and clientele goes a long way in developing the
culture of the organization.
Along with professionalism coStatmes reliability and discipline. Self-discipline enables an
entrepreneur to achieve their targets, be organized and set an example for everyone.
Reliability results in trust and for most ventures, trust in the entrepreneur is what keeps the
people in the organization motivated and willing to put in their best. Professionalism is one of
the most important characteristics of an entrepreneur.

Risk-taking:
A risk-taking ability is essential for an entrepreneur. Without the will to explore the unknown, one
cannot discover something unique. And this uniqueness might make all the difference. Risk-
taking involves a lot of things. Using unorthodox methods is also a risk. Investing in ideas,
nobody else believes in but you is a risk too.
Entrepreneurs have a differentiated approach towards risks. Good entrepreneurs are always
ready to invest their time and money. But, they always have a backup for every risk they take.
For exploring in the unknown, one must be bestowed with a trump card; a good entrepreneur
has one, always. Also, evaluation of the risk to be undertaken is also essential. Without knowing
the consequences, a good entrepreneur wouldn’t risk it all.

Passion:
Passion acts as a driving force, with which, you are motivated to strive for better.
It also allows you the ability to put in those extra hours in the office which can or may make a
difference. At the beginning of every entrepreneurial venture or any venture, there are hurdles
but your passion ensures that you are able to overcome these roadblocks and forge ahead
towards your goal.

Planning:
Planning is the most important of all steps required to run a show. Without planning, everything
would be a loose string as they say, “If you fail to plan, you plan to fail.”
Planning is strategizing the whole game ahead of time. It basically sums up all the resources at
hand and enables you to come up with a structure and a thought process for how to reach your
goal. The next step involves how to make optimum use of these resources, to weave the cloth
of success.Facing a situation or a crisis with a plan is always better. It provides guidelines with
minimum to no damage incurred to a business. Planning is one of the most important 

Knowledge:
Knowledge is the key to success. An entrepreneur should possess complete knowledge of his
niche or industry. For only with knowledge can a difficulty be solved or a crisis is tackled.
It enables him to keep track of the developments and the constantly changing requirements of
the market that he is in. May it is a new trend in the market or an advancement in technology or
even a new advertiser’s entry, an entrepreneur should keep himself abreast of it. Knowledge is
the guiding force when it comes leaving the competition behind. New bits and pieces of
information may just prove as useful as a newly devised strategy.

Social Skills:
A skillset is an arsenal with which an entrepreneur makes his business work. Social Skills are
also needed to be a good entrepreneur. Overall, these make up the qualities required for an
entrepreneur to function. Social Skills involve the following:

 Relationship Building
 Hiring and Talent Sourcing
 Team Strategy Formulation and many more.

Open-mindedness towards learning, people, and even failure:

An entrepreneur must be accepting. This experience is inculcated through the process of
accepted learning. Good entrepreneurs know they can learn from every situation and person
around them. Information obtained can be used for the process of planning. To recognize such
openings, an open-minded attitude is required.

An entrepreneur should be determined. He should face his losses with a positive attitude and
his wins, humbly. Any good businessman will know not to frown on a defeat. Try till you succeed
is the right mentality. Failure is a step or a way which didn’t work according to the plan. A good
entrepreneur takes the experience of this setback and works even hard with the next goal in
line.

Learning with an open mind lets you look at your faults humbly. New information always makes
an entrepreneur question his current resolve. It also provides a new perspective towards a
particular aspect. Open-mindedness also enables you to know and learn from your competition.

Empathy:
Empathy is the understanding of what goes on in someone’s mind. This a skill that is worth a
mention. A good entrepreneur should know the strengths and weaknesses of every employee
who works under him.
Unhappy employees are not determined and as an entrepreneur, it is up to you to create a
working environment where people are happy to come. To look after their well-being, an
entrepreneur should try to understand the situation of employees. What can be a motivational
factor? How can I make my employees want to give their best? All this is understood through
empathy.

The customer is everything:

A good entrepreneur will always know this; a business is all about the customer. How you grab
a customer’s attention is the first step. This can be done through various mediums such as
marketing and advertising.

It is also important that you know the needs of your customers. The product or service which is
being created by the organization needs to cater to the needs of its consumers. Personalising a
business for consumers will also boost the sales.
TYPES OF ENTREPRENEURS:

Entrepreneurs are classified into different types based on different classifications as mentioned
below:
Based on the Type of Business:
1. Trading Entrepreneur:
As the name itself suggests, the trading entrepreneur undertake the trading activities. They
procure the finished products from the manufacturers and sell these to the customers directly or
through a retailer. These serve as the middlemen as wholesalers, dealers, and retailers
between the manufacturers and customers.
2. Manufacturing Entrepreneur:
The manufacturing entrepreneurs manufacture products. They identify the needs of the
customers and, then, explore the resources and technology to be used to manufacture the
products to satisfy the customers’ needs. In other words, the manufacturing entrepreneurs
convert raw materials into finished products.
3. Agricultural Entrepreneur:
The entrepreneurs who undertake agricultural pursuits are called agricultural entrepreneurs.
They cover a wide spectrum of agricultural activities like cultivation, marketing of agricultural
produce, irrigation, mechanization, and technology.

Based on the Use of Technology:

1. Technical Entrepreneur:
The entrepreneurs who establish and run science and technology-based industries are called
‘technical entrepreneurs.’ Speaking alternatively, these are the entrepreneurs who make use of
science and technology in their enterprises. Expectedly, they use new and innovative methods
of production in their enterprises.
2. Non-Technical Entrepreneur:
Based on the use of technology, the entrepreneurs who are not technical entrepreneurs are
non-technical entrepreneurs. The forte of their enterprises is not science and technology. They
are concerned with the use of alternative and imitative methods of marketing and distribution
strategies to make their business survive and thrive in the competitive market.

Based on Ownership:
1. Private Entrepreneur:
A private entrepreneur is one who as an individual sets up a business enterprise. He / she it’s
the sole owner of the enterprise and bears the entire risk involved in it.
2. State Entrepreneur:
When the trading or industrial venture is undertaken by the State or the Government, it is called
‘state entrepreneur.’
3. Joint Entrepreneurs:
When a private entrepreneur and the Government jointly run a business enterprise, it is called
‘joint entrepreneurs.’

Based on Gender:
1. Men Entrepreneurs:
When business enterprises are owned, managed, and controlled by men, these are called ‘men
entrepreneurs.’
2. Women Entrepreneurs:
Women entrepreneurs are defined as the enterprises owned and controlled by a woman or
women having a minimum financial interest of 51 per cent of the capital and giving at least 51
per cent of employment generated in the enterprises to women.

Based on the Size of Enterprise:

1. Small-Scale Entrepreneur:
An entrepreneur who has made investment in plant and machinery up to Rs 1.00 crore is called
‘small-scale entrepreneur.’
2. Medium-Scale Entrepreneur:
The entrepreneur who has made investment in plant and machinery above Rs 1.00 crore but
below Rs 5.00 crore is called ‘medium-scale entrepreneur.’
3. Large-Scale entrepreneur:
The entrepreneur who has made investment in plant and machinery more than Rs 5.00 crore is
called ‘large-scale entrepreneur.’

Clarence Danhof Classified entrepreneurs into four types:

These are discussed in seriatim:
1. Innovating Entrepreneurs:
Innovating entrepreneurs are one who introduce new goods, inaugurate new method of
production, discover new market and reorganise the enterprise. It is important to note that such
entrepreneurs can work only when a certain level of development is already achieved, and
people look forward to change and improvement.
2. Imitative Entrepreneurs:
These are characterised by readiness to adopt successful innovations inaugurated by
innovating entrepreneurs. Imitative entrepreneurs do not innovate the changes themselves, they
only imitate techniques and technology innovated by others. Such types of entrepreneurs are
particularly suitable for the underdeveloped regions for bringing a mushroom drive of imitation of
new combinations of factors of production already available in developed regions.
3. Fabian Entrepreneurs:
Fabian entrepreneurs are characterised by very great caution and skepticism in experimenting
any change in their enterprises. They imitate only when it becomes perfectly clear that failure to
do so would result in a loss of the relative position in the enterprise.
4. Drone Entrepreneurs:
These are characterised by a refusal to adopt opportunities to make changes in production
formulae even at the cost of severely reduced returns relative to other like producers. Such
entrepreneurs may even suffer from losses but they are not ready to make changes in their
existing production methods.

Following are some more types of entrepreneurs listed by some other behavioural
scientists:
1. Solo Operators:
These are the entrepreneurs who essentially work alone and, if needed at all, employ a few
/employees. In the beginning, most of the entrepreneurs start their enterprises like them.
2. Active Partners:
Active partners are those entrepreneurs who start/ carry on an enterprise as a joint venture. It is
important that all of them actively participate in the operations of the business. Entrepreneurs
who only contribute funds to the enterprise but do not actively participate in business activity are
called simply ‘partners’.
3. Inventors:
Such entrepreneurs with their competence and inventiveness invent new products. Their basic
interest lies in research and innovative activities.
4. Challengers:
These are the entrepreneurs who plunge into industry because of the challenges it presents.
When one challenge seems to be met, they begin to look for new challenges.
5. Buyers:
These are those entrepreneurs who do not like to bear much risk. Hence, in order to reduce risk
involved in setting up a new enterprise, they like to buy the ongoing one.
6. Life-Timers:
These entrepreneurs take business as an integral part to their life. Usually, the family enterprise
and businesses which mainly depend on exercise of personal skill fall in this type/category of
entrepreneurs.

ROLE OF ENTREPRENEURSHIP IN ECONOMIC DEVELOPMENT

Entrepreneurship plays an influential role in the economic growth and standard of living of the
country. As a startup founder or small business owner, you may think that you are simply
working hard to build your own business and provide for yourself and your family. But you are
actually doing a whole lot more for your local community, state, region, and the country as a
whole. Here are the top 7 important roles an entrepreneur plays in the economic development of
a country.

1. Wealth Creation and Sharing: By establishing the business entity, entrepreneurs invest
their own resources and attract capital (in the form of debt, equity, etc.) from investors, lenders
and the public. This mobilizes public wealth and allows people to benefit from the success of
entrepreneurs and growing businesses. This kind of pooled capital that results in wealth
creation and distribution is one of the basic imperatives and goals of economic development.

2. Create Jobs: Entrepreneurs are by nature and definition job creators, as opposed to job
seekers. The simple translation is that when you become an entrepreneur, there is one less job
seeker in the economy, and then you provide employment for multiple other job seekers. This
kind of job creation by new and existing businesses is again is one of the basic goals of
economic development. This is why the Govt. of India has launched initiatives such
as StartupIndia to promote and support new startups, and also others like the Make in
India initiative to attract foreign companies and their FDI into the Indian economy. All this in turn
creates a lot of job opportunities, and is helping in augmenting our standards to a global level.
3. Balanced Regional Development: Entrepreneurs setting up new businesses and industrial
units help with regional development by locating in less developed and backward areas. The
growth of industries and business in these areas leads to infrastructure improvements like better
roads and rail links, airports, stable electricity and water supply, schools, hospitals, shopping
malls and other public and private services that would not otherwise be available.

Every new business that locates in a less developed area will create both direct and indirect
jobs, helping lift regional economies in many different ways. The combined spending by all the
new employees of the new businesses and the supporting jobs in other businesses adds to the
local and regional economic output. Both central and state governments promote this kind of
regional development by providing registered MSME businesses various benefits and
concessions.

4. GDP and Per Capita Income: India’s MSME sector, comprised of 36 million units that
provide employment for more than 80 million people, now accounts for over 37% of the
country’s GDP. Each new addition to these 36 million units makes use of even more resources
like land, labor and capital to develop products and services that add to the national income,
national product and per capita income of the country. This growth in GDP and per capita
income is again one of the essential goals of economic development.

5. Standard of Living: Increase in the standard of living of people in a community is yet

another key goal of economic development. Entrepreneurs again play a key role in increasing
the standard of living in a community. They do this not just by creating jobs, but also by
developing and adopting innovations that lead to improvements in the quality of life of their
employees, customers, and other stakeholders in the community. For example, automation that
reduces production costs and enables faster production will make a business unit more
productive, while also providing its customers with the same goods at lower prices.

6. Exports: Any growing business will eventually want to get started with exports to expand
their business to foreign markets. This is an important ingredient of economic development
since it provides access to bigger markets, and leads to currency inflows and access to the
latest cutting-edge technologies and processes being used in more developed foreign markets.
Another key benefit is that this expansion that leads to more stable business revenue during
economic downturns in the local economy.  

7. Community Development: Economic development doesn’t always translate into community

development. Community development requires infrastructure for education and training,
healthcare, and other public services. For example, you need highly educated and skilled
workers in a community to attract new businesses. If there are educational institutions, technical
training schools and internship opportunities, that will help build the pool of educated and skilled
workers.

A good example of how this kind of community development can be promoted is Azim Hashim
Premji, Chairman of Wipro Limited, who donated Rs. 27,514 crores for promoting education
through the Azim Premji Foundation. This foundation works with more than 350,000 schools in
eight states across India.

8. Mobilization Of Local Resources

Entrepreneurs help to mobilize and utilize local resources like small savings and talents of
relatives and friends, which might otherwise remain idle and unutilized. Thus they help in
effective utilization of resources.

9. Optimization Of Capital
Entrepreneurs aim to get quick return on investment. They act as a stabilizing force by providing
high output capital ratio as well as high employment capital ratio.

10. Consumer Demands

Entrepreneurs produce a wide range of products required by consumers. They meet the
demand of the consumers without creating a shortage for goods.

-11. Social Advantage

Entrepreneurs help in the development of the society by providing employment to people and
paves for independent living They encourage democracy and self-governance. They are adept
in distributing national income in more efficient and equitable manner among the various
participants of the society.

12. Capital formation

A country can attain economic development only when there is more amount of investment and
production. Entrepreneurs help in channelizing their savings and savings of the public to
productive resources by establishing enterprises. They promote capital formation by
channelizing the savings of public to productive resources.
13. Growth of capital market
Entrepreneurs raises money for running their business through shares and debentures. Trading
of shares and debentures by the public with the help of financial services sector leads to capital
market growth.

14. Growth of infrastructure

The infrastructure development of any country determines the economic development of a
country, Entrepreneurs by establishing their enterprises in rural and backward areas influence
the government to develop the infrastructure of those areas.

15. Development of Trader

Entrepreneurs play an important role in the promotion of domestic trade and foreign trade. They
avail assistance from various financial institutions in the form of cash credit, trade credit,
overdraft, short term loans, secured loans and unsecured loans and lead to the development of
the trade in the country.

16. Economic Integration

Entrepreneur reduces the concentration of power in a few hands by creating employment
opportunities and through equitable distribution of income. Entrepreneurs promote economic
integration in the country by adopting certain economic policies and laws framed by the
government. They help in removing the disparity between the rich and the poor by adopting the
rules and regulation framed by the government for the effective functioning of business in the
country.
17. Inflow of Foreign Capital
Entrepreneurs help to attract funds from individuals and institutions residing in foreign countries
for their businesses.

BUSINESS ETHICS, VALUES AND SOCIAL RESPONSIBILITY TO AN ENTREPRENEUR

Introduction
An entrepreneur is one who organizes, manages and assumes the risk of an enterprise. An
entrepreneur visualizes a business, takes bold steps to establish undertaking, coordinates the
various factors of production and gives it a start. An entrepreneur should be aware of ethics and
social Responsibility in business and should follow them in order to maintain the ecological
balance in the society.
The study and examination of moral and social Responsibility in relation to business practice
and decision making in business is known as “Business Ethics”.
The term “business” is commonly referred to the commercial activities achieved at making profit,
but gradually there is a substantial change in the way in which people viewed the business.
In the past primary objective of a business was profit maximization but the present perspectives
on business objectives are not maximization. Besides profit maximization the entrepreneur
needs to fulfil the ethics in the business

Definition
James and stoner said, “Values are a relatively permanent desire that seems to be good in
them”.
Social Responsibility implies that business man should oversee the operation of an economic
system that fulfils the expectations of the public. - W.Fredick
Social Responsibility has been defined by Andrews “By social Responsibility, we mean the
intelligent and objective concern for the welfare of society that restrains individual and corporate
behaviour from ultimately destructive activities, no matter how immediately profitable, and leads
in the direction of positive contributions to human betterment, variously as the latter may be
defined.”
Ethics And Social Responsibility for an entrepreneur Social Responsibility means eliminating
corrupt, irresponsible or unethical behaviour which might harm to the community, its people and
the environment.
1) Public Image. The activities of an entrepreneur towards the welfare of the society earn
goodwill and reputation for the business. People prefer to buy products of a company that
engages itself in various social welfare programs. Again good public image also attracts the
honest and competent
employees to work with such employers.
2) Employee Satisfaction. Employees are the part of the society. If you satisfy your needs,
then you are doing social work.
3) Ethical Leadership. It is the belief that what entrepreneur does has a strong influence on
employees. If manager cheats, Lies, steals or manipulates, then they are sending wrong signals
to employees.
4) A social Entrepreneur is an individual or organization who seeks out opportunities to
improve society by using practical, innovative and substantial approaches. Since last three
decades, HDFC contributes 7% of its income to support community needs. Mahindra Tech
employees donated one
day salary to help victims of Bihar floods. Wipro has set up a foundation named Azim Premji
Foundation to help improve education of the elementary schools in rural India.
5) Environment Management. Managers and Organizations can do many things to protect and
reserve the natural environment which includes plastic less business by giving paper bag,
creating eco-friendly product, by eliminating production.
6) Consumer Awareness. Consumers have become very conscious about their rights. If you
are giving high quality products at cheap rate, that is kind of social Responsibility

NEED OF ETHICS TO AN ENTREPRENEUR

 The social dimensions of business ethics cannot be overlooked because many problems
arise from the relationship of business to the boarder society. Ethical considerations are
significant for managers due to the following reasons:
 For every individual job is the Centre of life. Unless job values are in harmony with the
rest of life, he cannot be happy and healthy person.
 Modern society is an industrial society. Therefore, business value becomes the value of
the society as a whole.
 An entrepreneur must take into moral and social consideration because these are the
real motivating factors.
 When an organization fails to behave in accordance with bthe social expectations, it may
lose not only its image and market share but it’s very right to exist.
The study of business ethics insulates high level of integrity to an entrepreneur.
Ethical knowledge will help the entrepreneur in setting highly responsible tone for the
organization in individual judgements and decisions whether ethical or not
Human values support established business value such as service, communication, excellence,
credibility, innovation, creativity and co-ordination.
In view of management and organizational work, Values are significant due to various reasons.
1) Value system influences the choice of organisational goals and strategies adopted to achieve
those goals.
2) Individual judge organisational success as well as its achievement on the basis of their value
system.
3) Values determine the extent to which individuals accept organizational pressure and goals. If
these do not match their value they throw the organizational pressure and goals and even leave
the organisation
VALUES FOR AN ENTREPRENEUR
Values of entrepreneur depend on socio-cultural factors obtained in a given society.
1) Core Values of an Entrepreneur
Core Values that are considered as crucial by majority of an entrepreneur are:
o Integrity
o Trust
o Achievement motivation
o Truthfulness

Humility and Contentment

2) Personal Traits of an Entrepreneur

Personal Traits are enduring characteristics of an individual by which he/she can be identified
and also to a certain extent differentiated from others. Every entrepreneur has certain personal
traits which make him/her successful and efficient. The following dominant traits are:
o Stability
o Skill
o Creativity
o Achievement
o Flexibility
3) Goals of an Entrepreneur
Value of an entrepreneur will have a direct influence on the goals and objective he sets. The
following are the goals of a typical entrepreneur are:
o Customer Satisfaction
o Achievement of departmental and organizational goal
o Employee Motivation
4) Important Personal Qualities of an Entrepreneur
Certain personal qualities (heights, complexion, voice, dressing habit, gregariousness, versatility
etc.) should supplement and stand in good steals of an individual to accomplish all-around
success. The following four qualities are important for a typical
Entrepreneur are:
o Self-control
 o Sociability
o Articulation abilities
o Physical stature
Causes of Growing Concern for Social Responsibility
 Social responsibility is a very effective exercise of public relations.
 Image building of a business house in a society.
 Two-way activities, CSR make the upliftment of society, which in turn will co-operate with
business firm in achieving their business goals.
 To make the best use of natural resources so as to raise the level of national income
and standard living of people.
 To create more and more employment opportunities for semiskilled people
 To protect the ecology of nation.
 To contribute to the economic development of backward region of the country.

Social Responsibilty of an Entrepreneur Towards Different Sections of The Society

1. Responsibility Towards Employees:
o Fair wages and salaries
o Adequate Basic Facilities like safe drinking water, electricity, canteen, hygienic toilets.
o Skill development programmes.
o Good and safe working environment.
o Retirement benefits and pension schemes
o Collective bargaining
o Insurance cover
o Medical facilities
2. Responsibilty Towards Customers:
o Charge reasonable price for products or services.
o Supply of right quality of goods in right quantity.
o No use of manipulated or false advertisements.
 Fair guarantee of product
3. Responsibility Towards Shareholders:
o A fair return on investment.
o Safety of invested capital.
o Regular and complete information about the performance and progress of the company.
o Regular Payment if dividend
4. Responsibility Towards Suppliers, Creditors:
o Maintain healthy and co-operative inter-business relationship between different businesses.
o Provide accurate and relevant information to creditors.
o Payment of price of materials on time.
o Prompt payment of interest on borrowed funds.
o Producing original documents for credit processing.

5. Responsibility Towards Public in General:

o Help the weaker section of the society.
o Creation of job opportunities.
o Improvement in living standards.
o Building of basic infrastructure like roads, sewerage.
o Health and educational development schemes.
o To make best use of society’s resources for their welfare.
6. Responsibility towards Government:
o Payment of corporate tax in correct amount with no manipulation of profit figures.
o To avoid corrupting public servants by offering bribe.
o To encourage fair trade practices.
o To avoid monopoly practices.
o To improve national income.

Top Companies Follow CSR Practices In India Mahindra & Mahindra

Key CSR Areas: Focus on the girl child, youth and farmers through programs in the domains of
education, public health and environment. Mahindra Pride Schools provide livelihood training to
youth from socially and economically disadvantaged communities and have trained over 13,000
youth in Pune, Chennai, Patna, Chandigarh and Srinagar.
L&T
Key CSR Areas: Water and sanitation, education, healthcare and skill building. L&T partners
with local governments on health programs focused on reproductive health, tuberculosis &
leprosy control, integrated counselling & testing centres for HIV/ AIDS. L&T’s community health
centres are located at Mumbai, Thane, Coimbatore, and Chennai.
Infosys
Key CSR areas: Works with Infosys Foundation, headed by Sudha Murty, towards removing
malnutrition, improving healthcare infrastructure, supporting primary education, rehabilitating
abandoned women and children and preserving Indian art and culture. Infosys Foundation USA
is focused on bridging the digital divide in America by supporting computer science education
and training in underrepresented communities.
Jubilant Life Sciences
Key CSR Areas: The Jubilant Bhartia Foundation (JBF) focuses on elementary education,
improving health indices, employability and promoting social entrepreneurship. Jubilant CSR
programs are implemented around its manufacturing locations in six areas in India.
Bharat Petroleum
Key CSR Areas: Quality education (strengthening primary, secondary education and
empowering teachers), water conservation, skill development (employment linked skill training
to the underprivileged with an inclusive approach for women, unemployed youth and persons
with disabilities), health/hygiene and rural development

ROLE OF ENTREPRENEURSHIP IN ECONOMIC DEVELOPMENT

Entrepreneurship plays an influential role in the economic growth and standard of living of the
country. As a startup founder or small business owner, you may think that you are simply
working hard to build your own business and provide for yourself and your family. But you are
actually doing a whole lot more for your local community, state, region, and the country as a
whole. Here are the top 7 important roles an entrepreneur plays in the economic development of
a country.

1. Wealth Creation and Sharing: By establishing the business entity, entrepreneurs invest
their own resources and attract capital (in the form of debt, equity, etc.) from investors, lenders
and the public. This mobilizes public wealth and allows people to benefit from the success of
entrepreneurs and growing businesses. This kind of pooled capital that results in wealth
creation and distribution is one of the basic imperatives and goals of economic development.

2. Create Jobs: Entrepreneurs are by nature and definition job creators, as opposed to job
seekers. The simple translation is that when you become an entrepreneur, there is one less job
seeker in the economy, and then you provide employment for multiple other job seekers. This
kind of job creation by new and existing businesses is again is one of the basic goals of
economic development. This is why the Govt. of India has launched initiatives such
as StartupIndia to promote and support new startups, and also others like the Make in
India initiative to attract foreign companies and their FDI into the Indian economy. All this in turn
creates a lot of job opportunities, and is helping in augmenting our standards to a global level.

3. Balanced Regional Development: Entrepreneurs setting up new businesses and industrial

units help with regional development by locating in less developed and backward areas. The
growth of industries and business in these areas leads to infrastructure improvements like better
roads and rail links, airports, stable electricity and water supply, schools, hospitals, shopping
malls and other public and private services that would not otherwise be available.

Every new business that locates in a less developed area will create both direct and indirect
jobs, helping lift regional economies in many different ways. The combined spending by all the
new employees of the new businesses and the supporting jobs in other businesses adds to the
local and regional economic output. Both central and state governments promote this kind of
regional development by providing registered MSME businesses various benefits and
concessions.

4. GDP and Per Capita Income: India’s MSME sector, comprised of 36 million units that
provide employment for more than 80 million people, now accounts for over 37% of the
country’s GDP. Each new addition to these 36 million units makes use of even more resources
like land, labor and capital to develop products and services that add to the national income,
national product and per capita income of the country. This growth in GDP and per capita
income is again one of the essential goals of economic development.

5. Standard of Living: Increase in the standard of living of people in a community is yet

another key goal of economic development. Entrepreneurs again play a key role in increasing
the standard of living in a community. They do this not just by creating jobs, but also by
developing and adopting innovations that lead to improvements in the quality of life of their
employees, customers, and other stakeholders in the community. For example, automation that
reduces production costs and enables faster production will make a business unit more
productive, while also providing its customers with the same goods at lower prices.

6. Exports: Any growing business will eventually want to get started with exports to expand
their business to foreign markets. This is an important ingredient of economic development
since it provides access to bigger markets, and leads to currency inflows and access to the
latest cutting-edge technologies and processes being used in more developed foreign markets.
Another key benefit is that this expansion that leads to more stable business revenue during
economic downturns in the local economy.  

7. Community Development: Economic development doesn’t always translate into community

development. Community development requires infrastructure for education and training,
healthcare, and other public services. For example, you need highly educated and skilled
workers in a community to attract new businesses. If there are educational institutions, technical
training schools and internship opportunities, that will help build the pool of educated and skilled
workers.

A good example of how this kind of community development can be promoted is Azim Hashim
Premji, Chairman of Wipro Limited, who donated Rs. 27,514 crores for promoting education
through the Azim Premji Foundation. This foundation works with more than 350,000 schools in
eight states across India.

8. Mobilization Of Local Resources

Entrepreneurs help to mobilize and utilize local resources like small savings and talents of
relatives and friends, which might otherwise remain idle and unutilized. Thus they help in
effective utilization of resources.

9. Optimization Of Capital
Entrepreneurs aim to get quick return on investment. They act as a stabilizing force by providing
high output capital ratio as well as high employment capital ratio.

10. Consumer Demands

Entrepreneurs produce a wide range of products required by consumers. They meet the
demand of the consumers without creating a shortage for goods.

-11. Social Advantage

Entrepreneurs help in the development of the society by providing employment to people and
paves for independent living They encourage democracy and self-governance. They are adept
in distributing national income in more efficient and equitable manner among the various
participants of the society.
12. Capital formation
A country can attain economic development only when there is more amount of investment and
production. Entrepreneurs help in channelizing their savings and savings of the public to
productive resources by establishing enterprises. They promote capital formation by
channelizing the savings of public to productive resources.

13. Growth of capital market

Entrepreneurs raises money for running their business through shares and debentures. Trading
of shares and debentures by the public with the help of financial services sector leads to capital
market growth.

14. Growth of infrastructure

The infrastructure development of any country determines the economic development of a
country, Entrepreneurs by establishing their enterprises in rural and backward areas influence
the government to develop the infrastructure of those areas.

15. Development of Trader

Entrepreneurs play an important role in the promotion of domestic trade and foreign trade. They
avail assistance from various financial institutions in the form of cash credit, trade credit,
overdraft, short term loans, secured loans and unsecured loans and lead to the development of
the trade in the country.
16. Economic Integration
Entrepreneur reduces the concentration of power in a few hands by creating employment
opportunities and through equitable distribution of income. Entrepreneurs promote economic
integration in the country by adopting certain economic policies and laws framed by the
government. They help in removing the disparity between the rich and the poor by adopting the
rules and regulation framed by the government for the effective functioning of business in the
country.
17. Inflow of Foreign Capital
Entrepreneurs help to attract funds from individuals and institutions residing in foreign countries
for their businesses.
 ENTREPRENEURIAL DEVELOPMENT PROGRAMME

What is meant by Entrepreneurial Development // Programme (EDP)? Discuss the

objectives of entrepreneurial development programme. 
It is rightly remarked that entrepreneurs are not necessarily born, they can also be developed
through education, trainirv   and experience. Though entrepreneurial talent exist in every
society  but socio-economic environment hinders the emergence of  entrepreneurial talent.
Entrepreneurship requires an environment in which entrepreneur can learn and discharge his
assigned responsibility in an efficient manner and change his attitude. Entrepreneurial
development seeks to provide constructive direction for those who choose a career path
different from traditional roles. The process of entrepreneurial development focuses on training,
education, reorientation and creation of conductive and healthy  environment for the growth of
enterprise.
MEANING AND DEFINITIONS OF ENTREPRENEURIAL DEVELOPMENT PROGRAMME
Entrepreneurial development is an act of encouraging people for entrepreneurial career and
making them capable of exploiting business opportunities. It is not simply a training task. It is the
act of motivating and developing skills of potential entrepreneur and  helping them in developing
their own ventures. Entrepreneurial development is thus an organised and systematic
development. It is regarded as a tool of industrialization and a solution to unemployment
problem.
The objective of entrepreneurial development is to motivate a person for entrepreneurial career
and to make him capable of perceiving and exploiting successfully opportunities for enterprises.
The trained entrepreneur can guide others on how to start their own enterprise and approach
various institutions for finance. In fact, trained entrepreneurs become catalysts of developing
industry and economic progress. 
According to Prof. Pareek and Karenina, “Operationally, entrepreneurship development would
mean development Of entrepreneurs and promtion of increased flow of individuals
to entrepreneurial ranks.
” Entrepreneurial Development Programme (EDP) may be defined as “a programme designed
to help an individual in  strengthening his entrepreneurial motive and in acquiring skill
andcapabilities necessary for playing his entrepreneurial role effectively.”
NATURE OR CHARACTERISTICS OF ENTREPRENEURIAL DEVELOPMENT PROGRAMME
Following are the main characteristics of entrepreneurial development programme :
  It is an organised and systematic process of enhancing the  motivation, knowledge änd
skills of the potential entrepreneurs. 
 It is based on the belief that individuals can be developed, their outlook can be changed
and their ideas can be converted into action through training. 
 It develops first-generation entrepreneurs who on their own cannot become successful
entrepreneurs. 
 It is an endeavour in human resource development.
 It emphasis on operational rather than academic training. 
 It is regarded as a tool of industrialisation and a solution to unemployment problem. 
 It is catalyst for developing industry and economic programmes.  
 It is not totally based on training. The whole process extends much beyond ‘training’.
Much of it is personal  counselling and support.
OBJECTIVES OF ENTREPRENEURIAL DEVELOPMENT
 Following are the main objectives of entrepreneurial development programmes :
(1) Promotion of Cottage and Small Scale Industries : The main objective of EDP is to
provide, in the rural areas, special programmes designed to stimulate new ventures and
encourage expansion of existing activities of small and medium scale industries.
(2) Generation of Employment Opportunities : EDP aims to encourage self-employment
among potential entrepreneurs. It generates employment and self-employment opportunities in
the processing of indigenous raw materials for local consumption and for exports.
(3) Promotion of First-Generation Businessmen : One of the main objective of EDP is to
encourage first generation entrepreneurs who do not have any business background. 
(4) TO Create Awareness about Availability of the Resources : It, aims to front,on wnroncss
about the available resources„  such rnw material, technology etc. in the
prospective  ontropronours.
(5) To import Training : The main objective of EDP is to in donut and train potential
entrepreneurs. It impart training in mnnngorinl understanding and skills. It also provide post
training assistance and monitoring facilities.
(6) To Develop a Broad Vision : One of the objective of EDP is to doyolop n broad vision to
see the business as a whole and to integrate his functions with it.
(7) To Remove Doubts of Entrepreneurs and to give solutionlion to their Problems : New
entrepreneurs have to face many problems in the establishment and operation of business. To
remove doubts of entrepreneurs and to give solution to their problem is one of the main aim of
EDP. It helps the entrepreneurs to set or reset the
objectives of their business and work individually and along with his group for their realisation.
(8) To create a successful entrepreneur : One of the main aim of EDP is to create the
successful entrepreneurs. It provides constructive direction for those who choose a career path
different from traditional roles.
(9) Creation of Conductive and healthy environment for  the growth of
entrepreneurs : The process of entrepreneurial development focuses on training, education,
reorientation and creation of conductive and healthy environment for the growth of enterprises.

ROLE/IMPORTANCE OF ENTREPRENEURIAL DEVELOPMENT PROGRAMMES

EDPs have great role and relevance in increasing the supply Of new entrepreneurs to
accelerate the process of industrialization. It is widely accepted that persons interested to
become entrepreneur will be greatly helped if appropriate training and
development  programmes are made available to them.  Neeå/lmportance of EDPs can be
judged on the basis of following points .
(1) Eliminating Poverty and Unemployment : Most of the under developed countries are
confronted with the chronic problem of unemployment. EDPs can help these unemployed
people in getting self employment and at the same time generating employment opportunities
for others. Various programs initiated by the government like NREP (National Rural
Employment Programme, IRDP (Integrated Rural Development Programmel etc. are aimed at
tackling unemployment problem.
(2) Balanced Regional Development : Successful EDPs help in accelerating the pace of
industrialisation resulting in the reduction of concentiation of economic power. Small scale units
can be set up in remote areas with little financial resources and it helps in achieving balanced
regional development. EDPs aimed at promoting small scale units are more useful for balanced
regional development than medium and large scale units.
(3) Economic Growth : The relevance ofEDPs can be clearly understood by their role in the
economic development of developing countries like India. Such programmes create many
entrepreneurs who are able to establish small and micro enterprises which require less
investment in funds. It increases new investment and bring innovations. All these activities in
turn stimulate the economic growth.
(4) Optimum use of Locally Available Resources : The EDPs can help in harnessing locally
available resou ces by training and educating the entrepreneurs. Since abundant resources
are available locally, proper use ofthese resources will help in creating a healthy base for sound
economic growth and rapid industrialisation. EDPB also help in minimising excessive scraps,
defective output and wastage in the production process.
(5) Promote Innovations : Entrepreneurial Development Programmes initiate the people for
innovations and creativity. EDPs have become a vital strategy for harnessing the vast
untapped human skills, to channelise them into accelerating industrialisation.
(6) Defuses Social Tension : Every youth feels frustrated if he does not get employment after
completing his education. The surplus young energies can be diverted to self-employment
careers to help the country. This may defuse social tension and unrest  among youth.
(7) Development of Entrepreneurship Qualities : Thus the EDPs are needed to induce
achievement motivation and develop entrepreneurial characteristics or competencies among
young persons through training with a view to making them successful future entrepreneurs.
(8) Preventing Industrial Slums : More industrial units are located in highly congested areas
and it leads to creation of industrial slums. EDPs help in removal of these slums
as entrepreneurs are provided with various schemes, incentives, subsidies and infrastructural
facilities to set up their own entreprises in all the places. It will help in controlling industrial slums
and also reduces pollution, traffic congestion and over crowding in developed areas.
(9) Fulfilment of Dreams : EDP is necessary to motivate the potential entrepreneurs to convert
their dreams into action.
(10) Successful Launching of New Units : EDP develops motivation, competence and skills
necessary for successful launching, management and growth of the enterprise. 
(11) Development of Rural and Backward Areas : If new enterprises are set up in backward
and rural areas of a developing country like India, they are sure to mitigate poverty in, such
areas and also to remove lopsided economic development that is, concentration of business
enterprises in urban areas only.

SOCIAL ENTREPRENEURSHIP
What is Social Entrepreneurship?
Social entrepreneurship is, at its most basic level, doing business for a social cause. It might
also be referred to as altruistic entrepreneurship.
Social entrepreneurs combine commerce and social issues in a way that improves the lives of
people connected to the cause. They don’t measure their success in terms of profit alone –
success to social entrepreneurs means that they have improved the world, however they define
that.
Beyond that, however, there are differing opinions about what constitutes social
entrepreneurship. Some believe the definition applies only to businesses that make money and
work toward improving a designated problem by selling something to consumers. Others say
business owners who work to solve a social problem using grant or government money are also
social entrepreneurs.

People are often attracted to businesses that use a social entrepreneurship model because
they’re helping to solve a social problem when they spend money on something they need or
want.Social Entrepreneurship Meaning and Definition

A Social Entrepreneurship is an organization which uses business methods to address a social or

environmental problem in an innovative way. In this article, we will look at the social
entrepreneurship meaning and also look at what defines a social entrepreneur.

According to Greg Dees, co-founder of the Center for the Advancement of Social Entrepreneurship
at Duke University and a member of the Impact Entrepreneurs advisory board –
‘Social entrepreneurs are individuals with innovative solutions to society’s most pressing social
problems. They are persistent and ambitious, tackle major social issues and offer new ideas for a
wide-scale change.‘
Usually, people leave the societal needs to the government or the business sectors. However,
social entrepreneurs tend to identify areas that are not working efficiently in the current system and
solve the problem by changing it, spreading the awareness about the solution, and persuading
people to be a part of the change.
As a common trait, social entrepreneurs are obsessed with their ideas and commit their lives to
change. They are visionaries since they envision a society without the problems. Further, they are
realists, since they concern themselves with the practical implementation of their vision.
They also present ideas which are user-friendly, ethical, easily understandable and engage
widespread support. This ensures that local people stand up, grab their idea and implement it. In
simple words, every leading social entrepreneur is a mass recruiter of local changemakers. He is a
role model who tells people that their action can do anything. In the last two decades, social
entrepreneurship has grown based on the understanding that a new idea in the hands of a good
entrepreneur is a powerful tool.

Why Social Entrepreneur?

Like regular business entrepreneurs change the face of business, social entrepreneurs work as
the agents of change for the society. They seize opportunities that others miss, improve systems,
invent new approaches and also create solutions to change society for the better. A business
entrepreneur can create an entirely new industry. Similarly, a social entrepreneur can come up with
new solutions to social problems, implement them on a large scale and change the face of society.
Here are some examples of leading social entrepreneurs:
 Susan B. Anthony (U.S.) – She fought for Women’s Rights in the United States of
America. Her fight included the right to control property and helped spearhead the adoption
of the 19th Amendment to the Constitution.
 Vinoba Bhave (India) – He was the founder and leader of the Land Gift Movement.
Under this movement, he caused the redistribution of more than 7,000,000 acres of land to
help India’s untouchables and landless.
 Dr. Maria Montessori (Italy) – She developed the Montessori approach to early
childhood education.
 Florence Nightingale (U.K.) – She was the founder of modern nursing. Further, she
established the first school for nurses and fought to improve hospital conditions.
 Margaret Sanger (U.S.) – She was the founder of the Planned Parenthood Federation of
America. Under this federation, she led the movement for family planning efforts around the
world.
 John Muir (U.S.) – He was a naturalist and a conservationist. He established the
National Park system and also helped found The Sierra Club.
 Jean Monnet (France) – He was responsible for the reconstruction of the French
economy following World War II. Further, his work included the establishment of the
European Coal and Steel Community (ECSC).
How social entrepreneurs play the role of change agents?

 They adopt a mission to create and sustain social value (not just private value). Further,
they recognize and relentlessly pursue new opportunities which serve the mission.
 Also, engage in a process of continuous innovation, adaptation, and learning.
 Further, act boldly without being limited by the resources in hand.
 Finally, exhibit heightened accountability to the constituencies served and also the
outcomes created.
Social Entrepreneurship Examples
Some contemporary well-known and lesser-known social entrepreneurs include:
 TOMS: When the company was founded, it applied its “one for one” concept to shoes.
For every pair of TOMS shoes purchased, the company donated a pair to a needy child. The
company has since expanded the one for one concept to eye wear, coffee, and tote bags.
 Grameen Bank: Founder Muhammad Yunus provides micro-loans to those in need to
help them develop financial self-sufficiency. Yunus received a Nobel Prize for his work in
2006.
 Badala.org: Founded by Joelle McNamara while she was still in high school, Badala.org
is an e-commerce site that creates jobs for African women by selling the products they make.
Products range from jewelry to wooden kitchen utensils.

Characteristics
According to the Schwab Foundation for Social Entrepreneurship, social entrepreneurs share
several characteristics. They:
 Achieve large scale social change.
 Focus on the social or ecological change they want to make while earning money to
support the change.
 Innovate when looking for a solution to a social problem.
 Use feedback to adapt and refine.
While popularized by Gen X, social entrepreneurs have long existed in history. 19th century
innovators Florence Nightingale and landscape architect Frederick Law Olmsted are considered
social entrepreneurs.
Social Entrepreneurship’s stand from the view point of the modern society

Social entrepreneurs are like the catalysts for society just in the same way as entrepreneurs
change the face of business. Social entrepreneurship consists of improvising systems, devising
new approaches, grasping opportunities others miss and generating solutions to change society
for the better. Several parameters differentiate social entrepreneurship from the present ways of
traditional business ventures.
1. Strategy- In social entrepreneurship, strategy followed is cooperative rather than
competitive owing to the social mission of entrepreneurs, poor working capital and
market orientation.
2. Financing- Funding for business enterprises is accomplished through issuance of
ownership shares - stocks or incurrence of long term debts - bonds or short term debt -
loans. These sources can be used by for-profit SE ventures to raise funds and the not-
 for-profit SE ventures can also borrow funds or accept donations by charging admission,
sales or rental. Thus, the difference in funding between for profit and not-for-profit social
organizations lies in the peculiarity between investors and donors.
3. Market- Business entrepreneurs function in a marketing environment where the supply
and demand indirectly influence the price and quantity of the product sold or service
rendered. On the other hand, a social entrepreneur marketing environment usually
implies that the costs are not fully covered by the revenue.
4. Governance- Business entrepreneurship is administered by a Board of Directors
accountable to the owners and the stakeholders. Non-profit social entrepreneurship
ventures have the possibility of a different governance structure. They can form a
subsidiary organization managed by a business enterprise board if they want to run a
part of their enterprise for profit.
5. Market failure- One theory articulated behind the existence of social purpose
organizations is that they emerge when there is a social-market failure, i.e., the
commercial market forces do not fulfil a social need, such as in the case of public goods
or in contract failure. This can be due to the incapability of those needing the services to
pay for them. A problem for the commercial entrepreneur is an opportunity for the social
entrepreneur.
6. Mission- The essential purpose of social entrepreneurship is creating social value for the
greater public good whereas commercial entrepreneurship targets at creating profitable
operations resulting in private gain. This contrast is fairly overstated. Commercial
entrepreneurship does benefit society in the form of new and valuable goods, services,
and jobs and can have transformative social impacts. Nevertheless, the basic
differences in purpose and reward can still be useful for comparative analysis.
7. Resource mobilization- The non-distributive restriction on surpluses generated by non-
profit organizations and the embedded social purpose of for-profit or hybrid forms of
social enterprises confines social entrepreneurs from entering into the same capital
markets as commercial entrepreneurs. Also, the finances of a social entrepreneurial
venture often make it challenging to recompense staff as competitively as in commercial
markets.
8. Performance measurement- The social aim of the social entrepreneur endures greater
challenges for measuring performance than the traditional entrepreneur who can count
on relatively tangible and quantifiable measures of performance such as financial
indicators, market share, customer satisfaction, and quality. Furthermore, the various
 financial and nonfinancial stakeholders to whom a social entrepreneurial firm are
accountable to are greater in number and more diverse thereby causing more
complexity in managing these relationships.
Modelling social entrepreneurship

Business models pave a useful path and are effective tools for corporate decision-makers to
capture information, analyse situations and make decisions in order to create competitive
advantages for enterprises. Nevertheless, with more competition and less market capacity,
traditional businesses face many challenges. There are numerous opinions about the drivers of
business model innovation such as the push of technology and market demand, the pressure of
competitors and the influence of the inner decision-makers etc. but a sole driver cannot entirely
describe the phenomenon. A varying model is the essential rationale for an industry to remain
profitable in a dynamic environment. Business model innovations can outspread and leverage
core assets, capabilities and relationships. There are four types of innovations Linder and
Cantrel described.
1. Realization model- Companies utilize the potential of their current business model and
maximize the returns from their prevailing operating logic.
2. Renewal model- Companies rejuvenate their product and service platforms, brands, cost
structures etc. thus establishing new positions on the price/value curve.
3. Extension model- Companies multiply businesses to include new markets, value chain
functions, and product & service lines.
4. Journey model- Companies move decisively to a new operating model and never return.
In comparison to the traditional ones, social entrepreneurships function in a fundamentally
different way due to the first mission of a social value. Subsequently, it is a Journey-Model-
Innovation. The motives that social entrepreneurships use to select a new business model
depend on the instinctive demands of the society. As the eventual purpose of business model
innovation of social entrepreneurship is looking for the balance between social value and
keeping sustainable development. If we only target social value without thinking through the
economic capability, it cannot uphold long-term growth. On the contrary, highlighting the
economic profit maximization but disregarding social mission is the traditional logic. The
success can be defined only when we realize striking a balance between the social and
managerial logic which can be evaluated from the given diagram.

THE PROCESS OF SOCIAL ENTREPRENEURSHIP

We can identify two coinciding and possibly contradictory conceptions of social
entrepreneurship. The first element emphasizes on social outcomes, social change and social
impact which puts the significance in social results of the activity. Other elements in the
literature emphasizes on generating revenue and a surplus and on demonstrating business
prowess in the pursuit of social outcomes. Social entrepreneurs must reflect the proper balance
between investment in the revenue-generating part of the firm and investment in the portion
accountable for achieving social outcomes. We should now need to turn our attention to the
challenge of running a social enterprise in the face of such apparent contradictions and
complexities. We need a framework and characterization to fit social entrepreneurship in place.
1. Development strategy- In the social entrepreneurial process, development strategy
resides in producing a level playing ground for everybody. Unlike in the business
development process where new product development is directed towards financial
rewards, here it focuses on social benefits. The conventional approach to product
development encompassing loose assessment of technology and market or in some
cases a total lack of assessment still thrives in current development strategy of SE.
Adding more to this situation, the basic problems inherent in new product development
in the business world are still relevant in SE.
2. Developmental objectives- Effective incorporation of market and technology strategy is
absent in current deployment of a framework for development strategy. Customer
support is a weakening strand in current SE developmental effort. There is total
deficiency of customer incorporation in the strategy front end. Usually entrepreneurs just
launch products that they think will fulfil the need of customers without getting them
involved. It is important to know what the exact problem is and how accurately this
problem affects people who will be our potential customers.
3. Financing- It can be done in two ways. Bootstrapping is a process of financing a small
firm through innovative acquirement and use of resources without raising money from
other traditional sources or a bank. Venture capitalists (VC) are another way of funding.
Presently, venture capitalists are seldom able to fund small start-up firms or a social
organization irrespective of the quality of the venture due to definite investment criteria,
not being integrated in the development process and high costs of diligence, negotiating,
and monitoring. VCs come in as donors and philanthropists and don’t get to make
money on social ventures because they are organized just as charities.
 4. The team- Entrepreneurs are very passionate about their goals. Sometimes they are not
experts in the field or sometimes they may belong to the domain but the desire for
change is something that is very common to all of them.
The actual development channel in existing practices implemented by social entrepreneurs
goes through different steps and shapes but mutual to each of them is the fact that ideas stream
freely in an uncontrolled manner. There are no stringent gateways during the filtering and fine-
tuning of ideas. Many social entrepreneurs contracted the neck of the development funnel for
screening of ideas by intuition based on the situation they are facing at that time. These
development processes vary considerably from the business development process and abstain
from using the business development model. The development phases/steps of current social
entrepreneurship ventures include:
1. Review your vision and mission- Each organisation has a mission and a vision that is
steered in the direction of its long term goal and purposes. So in this context, the
purpose is socially oriented.
2. Establishing the risk willingness of the organization- Some stakeholders do not favour
risks while others outdo in risky ventures. This is the fact that makes social enterprises
involve greater risky investments compared to business enterprises specifically because
monetary returns do not drive social investments.
3. Establish the mission outcome of the business- Here we target the preferred results from
the mission and establish the scope of the mission. The user community is also
integrated into the process at this level so as to better comprehend and adapt to their
need.
4. Idea generation and refinement- Though idea generation starts along with the review of
mission, they are modified and refined according to the perceived social need or to
address a gap in the society.
5. Incubation- Once the idea generated has been refined, implementation starts with a
small chunk. This is because venture capitalists are not involved at this point.
6. Business plan- When the above phases are successfully accepted by the stakeholders,
we can now develop the business plan. At this level, the entrepreneur is getting ready for
full market implementation.
7. Full implementation with accountability- Here ramp-up/expansion of the project and its
subsequent operation takes place (Fig. 3).
Fig. 3
Stages of SE development