Short answer questions

1. Define Entrepreneurship
According to Higgins “Entrepreneurship is mean the junctions of seeking investment and
production opportunities”

2. What is ancillary industry?

Ancillary industries are those which manufacture parts and components to be used by larger
industries. Eg: industries like GE (ancillary) produce engines for the air craft industry.
Ancillary industries are those industries which help to both primary and secondary industries

3. Define sole proprietorship form of business?

Sole proprietorship is a form of business organisation in which an individual invests his own
capital, uses his own skill and intelligence in the management of its affairs and is solely
responsible for the results of its operation,"

The individual, with the assistance of other workers or by his own labour and capital, may run
the industry.

4. List out the sources of Ideas.

a. Good understanding of economics and the economy.
b. Changing needs of the people in a locality/society.
c. Watching Emerging trends in the society.
d. Extensive travelling and a wide range of reading.
e. Visit to trade fairs and exhibitions displaying new products and services.
f. One’s market insights through observation.
g. Success stories of entrepreneurs or friends or relatives.
h. Consumers, existing products and services, distribution channel, the federal government
(the files of patent office, in response to government regulations) , and research and
development.
5. Differences between CPM & PERT.
BASIS PERT CPM
Full Form Program (Project) Evaluation and Critical Path Method
Review Technique
Meaning used to manage the uncertain task Statistical technique used to manage
of a project. the activities of a project.
Model Probabilistic Model Deterministic Model
Orientation Event-oriented Activity-oriented
Estimates Three time estimates One time estimate
 Appropriate for Research & Development project Non-research project. Example-ship
building, civil construction

6. Recall the concepts of project formulation

Project formulation is defined as taking a first look carefully and critically at a project idea by
an entrepreneur to build up an all-round beneficial to project after carefully weighing its various
components. Following are the sequential stages
1) Feasibility analysis
2) Techno – Economic analysis
3) Network analysis
4) Input analysis
5) Finanical analysis
6) Social Cost-Benefit analysis
7) Pre-investment analysis

7. Write a short note on time management.

“Time management” refers to the way that you organize and plan how long you spend on
specific activities especially to increase effectiveness, efficiency and productivity.

8. Define personality.
It may be defined as dynamic organization within the individual of those psychological systems
that determine unique adjustments to his environment.
It can also be defined as the sum total of ways in which the individual reacts and interacts with
others.
9. Discuss on tax holiday.
In general a tax holiday is a government incentive program that offers a tax reduction or
elimination to businesses.
Under section 80J of Income-tax Act 1961, new industrial undertaking including small scale
industries, are exempted from the payment of Income-tax on their profits subjected to min. of
6% per annum of their capital employed. This exemption in tax is allowed for a period of five
years from the commencement of production.

10. Define Leadership.

It is a process of influencing and supporting others to work enthusiastically towards achieving
the objectives.
Long answer questions
11. A) Explain the role of entrepreneur for the economic growth of the country.
Entrepreneurship serves as a catalyst of economic development.
• Capital Formation
• Generate Employment
• Improve Standard of Living
• Wealth Creation and Distribution
• Promotes balanced regional development
• Helps reduce the concentration of economic power
• Increasing Gross National Product & Per Capita Income
• Encourages effective resource mobilization of capital and skill which might otherwise
remain unutilized and idle.
• Promotes Country's Export Trade

11. B) Explain the linkage among the small medium and heavy industry.
Alliances: An alliance is formed by firms coming together in some contractual arrangement. The
well known types of contractual arrangements include the following:
Job subcontracting i.e. the large business provides materials and components to small units
who process the same into finished goods.
Purchase subcontracting i.e. in this case the material is procured by small units who
manufacture a specific part or component needed by a particular large unit.
Complementary : in this case the product manufactured by small company is purchased by big
unit as accessory.
Joint-venture: involves the creation of a third firm to manufacture or market a product which
had been developed by the entrepreneurial firm. Equity was usually shared by the partners
Strategic alliance: which is essentially a joint-venture without the creation of a third firm and no
equity is involved
Licensing: includes permission to manufacture a product under license, to distribute a product
and to include product in another design. ˆ
Merchandising or commercial trading: in this case the small units manufacture the goods and
big units on the strength of their financial power market it with their own brands.
Maintenance and repair services: many large enterprises give the operation and maintenance
contract to the small companies.
12 A) Explain the types and forms of business ownerships.
Types of enterprises:
1. Service enterprises
Consulting agencies
Repair shops
Professional – doctors, lawyers, engineers, chartered accountants
Beauty parlors
Carpenters
2. Trading enterprises
Provisions shop
Medical shops
Dealership and agencies
Clothes merchants
3. Manufacturing enterprises

Forms of enterprises:
1. Sole proprietorship
2. Partnership
3. Limited Liability Partnership
4. Joint stock companies
▪ Public limited
▪ Private limited
4. Co-operative enterprises
12 B) Explain the Characteristics of an Entrepreneur ?
1. Mental ability - intelligence and creativity
2. Clear objectives
3. Maintaining business secrecy
4. Human relations ability
5. Communications ability
6. Technical knowledge
7. Emotional stability
8. Motivating Skills
9. Self confidence
10. Long term involvement
11. High energy level
12. Persistent problem – solver
13. Initiative
14. Moderate risk-taker
15. Leadership
13 A) How do you identify the market demand for project formulation?
Analysis of market Demand:
Market and demand analysis is conducted to know about the aggregate demand for the product
or service and the market share that the proposed project will enjoy.
Market demand analysis involves the following activities:
1. Situation analysis and specification of objectives
2. Collection of secondary inputs
3. Conduct of market survey
4. Characterization of the market
5. Demand Forecasting
6. Market Planning
13 B) List out the sources of ideas of establishing a business.
a. Good understanding of economics and the economy.
b. Changing needs of the people in a locality/society.
c. Watching Emerging trends in the society.
d. Extensive travelling and a wide range of reading.
e. Visit to trade fairs and exhibitions displaying new products and services.
f. One’s market insights through observation.
g. Success stories of entrepreneurs or friends or relatives.
h. Consumers, existing products and services, distribution channel, the federal government
(the files of patent office, in response to government regulations) , and research and
development.

14 A) Explain the concept of financial and technical analysis in project formulation?

A) Financial Analysis:
is the process of discovering economic facts about an enterprise and /or a project on the basisi
of an interpretation of financial data. It helps in finding out the financial viability. It uses ratio
analysis for easy and better comparison and explanation.
Utility of Financial analysis:
a) Apprisal of project
b) Health of enterprise
c) Pefromance index
d) Index of pitfalls
Tools used in financial Analysis:
a) Trend analysis
b) Variable analysis
c) Ratio analysis
d) Funds flow analysis
e) Break-even analysis
 f) Common size statements
g) Cash budgetary
h) Proforma statement
B) Technical analysis:
It establishes whether the project is technically feasible or not and whether it offers a basis for
the estimation of costs. Technical analysis should incorporate the following:
a) A description of the product, including specification relating to its physical, mechanical
and chemical properties
b) A description of the selected manufacturing process
c) A determination of the plant size and production schedule
d) Selection of machinery and equipment, including specifications
e) An identification of plant's location and an assessment of its desirability in terms of its
distance
f) A design of the plant layout and an estimate of the cost of the erection of the proposed
buildings
g) A study of the availability of raw materials and utilities
h) An estimate of labour requirements, including a detailed break-down of direct and
indirect labour
i) A determination of the type and quantity of waste to be disposed of, together with a
descript disposal method, its costs, and the necessary clearance from proper authorities
j) An estimate of the production cost of the product
14 B) Discuss briefly about environmental influence?
Environmental influence: Modern business is treated as a social and economic institution and is
affected by the political, social and economic forces. It is the environment which regulates the
entrepreneurial activities. The environment can be classified as
1. Political
a. Political atmosphere
b. Leadership
2. Economic Policies
a. Trade
b. Tarrifs
c. Incentives
d. Subsidies
3. Social
a. Consumer behavior
b. Attitudes
c. Opinions
d. motives
4. Technological
a. Competition & risk
 b. Efficiency
c. Productivity& profitability

5. Legal rules and regulations

6. Cultural structure aspiration and values
15 A) Explain the procedure of project management?
A project is temporary in that it has a defined beginning and end in time, and therefore defined
scope and resources.
Project management is the practice of initiating, planning, executing, controlling, and closing
the work of a team to achieve specific goals and meet specific success criteria at the specified
time.
Project management processes fall into five groups:
a) Initiating
b) Planning
c) Executing
d) Monitoring and Controlling
e) Closing
15 B) Define network analysis.
Network analysis is defined as the process of “breaking down a complex project’s data into its
parts (activities, events, durations, etc.) and plotting them to show their interdependencies and
interrelationships.”
Network analysis is used to analyze and optimize a network. These methods are used in project
management, logistics, and transportation. Following are the important techniques in network
analysis
• Critical Path Method (CPM)
• Program Evaluation and Review Technique (PERT)

16 A) Briefly discuss the behavioral aspects of an entrepreneur.

Behavioral aspects of Entrepreneurs:
➢ Positive feedback from good job.
➢ Initiate confidence in employees.
➢ Be fair and objective, not vindictive.
➢ Practice what is preached.
➢ Have down to earth, person-to-person approach.
➢ Act as a part of a team.
➢ Be compassionate and understanding.
➢ Create an atmosphere of acceptance and trust.
➢ Listen attentively.
➢ Clear priorities.
 ➢ Be available for discussion.
➢ Communicate effectively.
➢ Provide feedback for good and bad work.
➢ Talk openly and give straight answers about what is happening.
➢ Encourage advancement.
➢ Give direction to the work unit.
➢ Supportive to employees.
➢ Have a sense of vision.
➢ Project a positive attitude.
➢ Set good example, friendly, not moody, keeps promises.
➢ Willingness to assume risks.

16 B) Explain time management matrix? Mention various approaches to time management.

Time management Matrix:

Time Managment
Urgent Not urgent
Matrix

Q1: Urgent & Important Q2: Not urgent & Important

Important
(Do Now) (Schedule on Calendar)

Q3: Urgent & Not Q4: Not urgent & not

Not important important important
Various approaches to(Delegate)
time management: (Delegate or Decline)

Various Approaches to time management:

a) The “get organized” approach

b) The “warrior approach” (Survival and independent production)
c) The “goal approach” (achievement)
d) The “ABC approach” (prioritization and values identification)
e) “Magic approach” (Technology)
f) The “go with the flow” approach: (harmony and natural rhythm):
g) The “recovery approach” (self awareness)
17 A) Explain how an entrepreneur should be motivated for high performance.
To become an entrepreneur one should identify their strengths and opportunities from the external
environment. Here motivation plays a major role in identifying their own strengths to become strong
leaders or powerful entrepreneurs which make them to accepting risks and face uncertainty for the
purpose of reaching pre-described goals.
Motivation makes entrepreneur by fulfilling higher level needs such as recognition, esteem, and self-
actualization. This can be explained by the following theories of motivation which proved that
motivation can bring energy, enthusiasm, creativity and efficiencies in fulfilling the desired objectives.

1. Maslow’s need hierarchy theory

2. MC Clelland’s acquired needs theory

a) Need for achievement
b) Need for power
c) Need for affiliation
3. Hertzberg’s two-factor theory

Entrepreneurial motivation is a psychological process in which all the motives may not influence
with the same intensity, it varies with the perception levels of the individuals and factors
responsible for the motivation. Sometimes a single motive can influence to become strong and
powerful entrepreneurs, these motives may come from various factors as follows.

Internal Factors of Motivation External Factors of Motivation

Need for self-actualization Optimism Influence
Self-motivation Availability of resources
Enthusiasm Product’s demand
Commitment Government policies
Education Information availability
Background, Financial Background Technological advancement
Changing tastes and preferences
17 B) Explain the leadership models?
Major styles of leadership are as follows:
1. Autocratic or Authoritative Style
2. Democratic Style
3. Free Rein or Laissez Fair style.
A) Autocratic or Authoritative Style
It is also known as leader centered style. Complete authority is centered in the leader himself He
has all the powers to take decisions. He designs the work-load of his employees and exercise
tight control over them. The subordinates are bound to follow his order and directions.
Advantages:
(i) Autocratic leadership style permits quick decision-making.
(ii) It provides strong motivation and satisfaction to the leaders who dictate terms.
B) Democratic Style
Leader decentralises and delegates high authority to his subordinates. He makes a final decision
only after consultation with the subordinates. Two way communication channel is used. While
delegating a lot of authorities to subordinates, he defines the limits within which people can
function. Democratic leaders have a high concern for both people and work.
Advantages:
(i) Exchange of ideas among subordinates and leader improves job satisfaction and morale of
the subordinates.
(ii) Human values get their due recognition which develops positive attitude and reduces
resistance to change.
(iii) The quality of decision is improved.
Dis Advantages
(i) Democratic style of leadership is time consuming and may result in delays in decision-making.
(ii) It is less effective if participation from the subordinates is for name sake.
C) Free Rein or Laissez Fair style:
Leadership style is a typical behavior pattern adopted by the leader to influencing has followers
or leading his people. An executive has to lead different types of subordinates and has to adopt
different styles for leading them at the workplace according to situation.
Advantages:
(i) Positive effect on job satisfaction and moral of subordinates.
(ii) It gives chance to take initiative to the subordinates.
(iii) Maximum possible scope for development of subordinates.
Disadvantages:
(i) Under this style of leadership, there is no leadership at all.
(ii) Subordinates do not get the guidance and support of the leader.
Free rein style of leadership may be appropriate when the subordinates are well trained, highly
knowledgeable, self-motivated and ready to assume responsibility