

RV Institute of Technology and Management

Department of Electronics and Communication Engineering

Technological
Innovation
Management and
Entrepreneurship
(18ES51)
Module-3

Dr. Prashant P Patavardhan

Dr. Prashant
hant P. Patavardhan
TECHNOLOGICAL INNOVATION MANAGEMENT AND ENTREPRENEURSHIP (18ES51)
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RV Institute of Technology and Management
Department of Electronics and Communication Engineering

RBT
Module-3
Level
Social Responsibilities of Business: Meaning of Social Responsibility, Social L1, L2
Responsibilities of Business towards Different Groups, Social Audit, Business
Ethics and Corporate Governance
Governance.
(Selected topics from Chapter 3, Text 1).
Entrepreneurship:: Definition of Entrepreneur, Importance of Entrepreneurship,
concepts of Entrepreneurship, Characteristics of successful Entrepreneur,
Classification of Entrepreneurs, Myths of Entrepreneurship, Entrepreneurial
trepreneurial
Development models, Entrepreneurial development cycle, Problems faced by
Entrepreneurs and capacity building for Entrepreneurship
Entrepreneurship.
(Selected topics from Chapter 2, Text 2).

Dr. Prashant
hant P. Patavardhan
TECHNOLOGICAL INNOVATION MANAGEMENT AND ENTREPRENEURSHIP (18ES51)
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Department of Electronics and Communication Engineering

SOCIAL RESPONSIBILITIES OF BUSINESS

MEANING OF SOCIAL RESPONSIBILITY

Social responsibility is a nebulous idea and hence is defined in various ways. Adoph Berle 1
has defined social responsibility as the manager’s responsiveness to public consensus. This
means that there cannot be the same set of social responsibilities applicable to all countries in
all times. These would be determined in each case by the customs, religions, traditions,
level of industrialization and a host of other norms and standards abo about which there is a
public consensus at any given time in given society .

According to Keith Davis2, the term Social responsibility refers to two types of business
obligations, viz.

a) The socio-economic obligation

b) The socio-human obligation.

The socio –economic

mic obligation of every business is to see that the economic consequences of
its actions do not adversely affect public welfare.

This includes obligations to promote employment opportunities, to maintain competition, to

curb inflation, etc.

The socio-human obligation of every business is to nurture and development human values
(such as morale, cooperation, motivation and self realization in work).

SOCIAL RESPONSIBILITIES OF BUSINESS TOWARDS DIFFERENT GROUPS

Every businessman is at the centre of a network of relationships which consists of those
between him at one end and his workers, employees, consumers, shareholders, other
businesses, community and the government on the other.

A businessman’s social responsibilities to each of these parties are briefly enu

enumerated below.

TOWARDS THE CONSUMER AND THE COMMUNITY

1. Production of cheap and better quality goods and services by developing new skills,
innovations and techniques, by locating factories and marketsat proper places and by
rationalizing the use of capital and labour.

2. Leveling out seasonal variations in employment and production throughaccurate

forecasts, production scheduling and product diversification.

3. Deciding priorities of production in the country’s interest and conservingnatural

resources.

Dr. Prashant
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Department of Electronics and Communication Engineering

4. Providing for social audit (see section below).

5. Honouring contracts and following honest trade practices.

6. Making real consumer needs as the criterion for selecting messages to be given by
product advertisements.

7. Preventing the creation of monopolies. Monopolies aree bad in that they make the
community face high prices, short supply and inferior quality of goods.

8. Providing for after-sale servicing.

9. Ensuring hygienic disposal of smoke and waste and voluntarily assistingin making
the town environment aesthetically satisfying.

10. Achieving better public relations (that is, creating a more favourable attitudetowards the
enterprise) by giving to the community, true, adequate and easily intelligible
information about its working.

11. Supporting education, slum clearance and similar other programmes.

TOWARDS EMPLOYEES AND WORKERS

1. A fair wage to the workers (and not merely one determined by market forces of supply
and demand) which is possible only when the businessman is willing to accept a
voluntary ceiling on his own profits.

2. Just selection, training and promotion (without any discrimination on grounds of sex,
race, religion and physical appearance).

3. Social security measures and good quality of work life.

4. Good human relations (i.e. maintaining industrial peace, creating conditions

condition for
collective bargaining, educating workers to produce their own leadershipand
participative management.)

5. Freedom, self respect and self realization.

6. Increase in productivity and efficiency by recognition of merit, by providing

opportunities for creative
ve talent and incentives.

TOWARDS SHAREHOLDERS AND OTHER BUSINESS

1. Promoting good governance through internal accountability and transparency.

2. Fairness in relations with competitors. Competitors with rival

businessmen should always be fair and healthy.

Dr. Prashant
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Department of Electronics and Communication Engineering

TOWARDS THE STATE

1. Shunning active participation in and direct identification with any politicalparty.

2. Observing all the laws of land which may have the following objectives

a) To provide direction to economic and business life of the community.

b) To bring about harmony

armony between the limited enterprise interest and thewider social
interest of the country.

c) To provide safeguard against errant business practices.

d) To compel business to play fair to all participants in the economy.

e) To prevent oppression or exploitation of the weaker partners in business.

f) To enforce maximum production according to the priority ofsectors and production

lines laid down by the government.

g) To allocate limited resources according to social priorities andpreferences

h) To enforce distributive jus

justice, especially to weaker sections ofthe community

i) To implement rural uplift and secure balanced development of the country.

SOCIAL AUDIT
A social audit is a systematic study and evaluation of the organization’s social performance as
distinguished from its economic performance. The term Social performance refers to any
organizational activity that effects the general welfare of society.

Benefits
1. It supplies data for comparison with the organizations social policies and standards. The
management can determine
mine how well it is living up to its social objectives.

2. It develops a sense of social awareness among all employees. In the process of

preparing reports and responding to evaluations, employees become more aware of the
social implications of their actions.

3. It provides data for comparing the effectiveness of different types of programmes.

4. It provides data about the cost of social programmes, so that the management can
relate this data to budgets, available resources, company objectives, etc.

5. It provides information for effective response to external groups which make demands
on the organization.

Dr. Prashant
hant P. Patavardhan
TECHNOLOGICAL INNOVATION MANAGEMENT AND ENTREPRENEURSHIP (18ES51)
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Department of Electronics and Communication Engineering

Limitations
A social audit is process audit rather than an audit of results. This means that a social audit
determines only what an organization is doing in social ar areas and not the amount of social
good that results from these activities. An audit of social results is not made because:

1. They are difficult to measure. If, for example, following a company’s SC/ST
employment programme in a certain region, there is a fall in the violent crime rate by 4
percent, it is difficult to measure how much of the benefit is caused by this programme.

2. Their classification under good or bad is not universally accepted. In other words,the
same social result may be classed as good accord
according
ing to one opinion, and as bad
according to another.
3. Most of them occur outside the organization, making it difficult for theorganization
to secure data from these outside sources.

BUSINESS ETHICS AND CORPORATE GOVERNANCE

Business Ethics

Business ethics is the application of moral principles to businessproblems. It knows the

difference between what you have a right to do.

It thus, extends beyond the question of legality and involves the goodness or badness of anact.

Therefore, an action may be legall

legally right but ethically wrong.

Sexual harassment, discrimination in pay and promotion and the right to privacyare some
other issues especially relevant to the study of ethics.

Sexual harassment in the workplace can be defined as unwelcome sexual advances,sexual

favour or other verbal or physical conduct of a sexual nature.

Discrimination against women in pay and promotion opportunities is also unethical, which
continues to exist despite there being the Equal RemunerationAct, 1976.

Employees’ right to privacycy raises several questions, some of which are; ‘Can a company
refuse to hire smokers and/or make current smokers quit smoking? And ‘Can a company
conduct drug tests on its prospective employees?’

Corporate governance
The term ‘corporate governance’ is use
used
d to denote the extent to which companies run in an
open and honest manner in the best interest of all stake-holders.

Dr. Prashant
hant P. Patavardhan
TECHNOLOGICAL INNOVATION MANAGEMENT AND ENTREPRENEURSHIP (18ES51)
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Department of Electronics and Communication Engineering

The key elements of good corporate governance are transparency and accountability
projected through a code which incorporates a system of checks and balances between all key
players, viz.., board of directors, auditors and stake
stake- holders.

In Britain, following corporate scandals in the early 1990’s a committee was appointed in
1991 under the chairmanship of Sir Adrian Cadbury to prepare a co code
de for best corporate
governance.

Major recommendations of this committee are as under:

*Non –executive
executive directors whose most important role is to bring an independent
judgement to bear on issues of strategy, performance, resources, etc. should be picked
through a formal selection process on merits.

*Companies should have remuneration committees consisting wholly or mainly of non

executive directors which should recommend to the board executive director’s
emoluments.

*Companies should have audit committees cconsisting

onsisting of minimum 3 non-executive
non
directors to report on any matter relating to financial management.

*Audit partners should be rotated and there should be fuller disclosure of non –
auditwork.

This is a voluntary code and has only some moral pressure ooff the London Stock Exchange
requiring companies to mention in their annual report whether they are following the code,
and if not, why.

Benefits of Good Corporate Governance

1. It creates overall market confidence and long-term trust in the company.

2. It leads to an increase in companies share prices.

3. It ensures the integrity of company’s financial reports.

4. It maximizes corporate security by acting as a whistle blower.

5. It limits the liability of top management by carefully articulating the decision-making

process.

6. It improves strategic thinking at the top by inducting independent directors whobring a

wealth of experience and a host of new ideas.

Dr. Prashant
hant P. Patavardhan
TECHNOLOGICAL INNOVATION MANAGEMENT AND ENTREPRENEURSHIP (18ES51)
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RV Institute of Technology and Management
Department of Electronics and Communication Engineering

ENTREPRENURSHIP
Introduction

Entrepreneur is a person who discov

discovers
ers new ideas and business opportunities, brings
together funds to establish a business, organise and manage its operation in order to provide
economic goods and services.

Entrepreneur has strong conviction, self motivation, and the will to grow and also courage to
go bankrupt if they fail in their venture.

Entrepreneurship is a dynamic activity which helps the entrepreneur to bring changes in the
process of production, innovations in business, new ideas and usage of resources, establishing
new markets etc.

VARIOUS DEFINITION OF an ENTERPRENEUR

An individual who bears the risk of operating a business in the face of uncertainty aboutthe
future conditions

Encyclopedia Britannica

He is the one who innovates, and introduces something new in the economy.
-Jospeh A.Schumpter

He shifts economic resources out of an area of lower and into an area of higher
productivity and greater yield. –J.B.Say[French economist]

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Department of Electronics and Communication Engineering

He searches for change ,responds to it and exploits opportunities. Innovation is thespecific

tool of an entrepreneur -Peter F.Drucker

Entrepreneurs are people who have the ability to see evaluate business opportunities
,together with the necessary resources to take advantage of them, and to intimate
appropriate action to ensure success. –International Labour Orgaisation
rgaisation [ILO]

He is a critical factor in economic development and an integral part of economic

transformation - William Diamond.

The word entrepreneur is derived from a Sanskrit word called Antaraprerana.

– Poornima Charantimath

Entrepreneurial Development Process

Enterpreneurial development can be explained in five stages.

Stage1 Perceiving, identifying and evaluating an opportunity

Stage2 Drawing up a business plan

Stage3 Marshalling resources

Stage4 Creating the enterprise

Stage5 Consolidation and management

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Department of Electronics and Communication Engineering

Ideas can come from various sources. The opportunities should be evaluated carefully.
The identification of project is followed by assessing the resource position.. Once the
enterprise is established, entrepreneur should alway
alwayss look for indefinite future, growth,
development or atleast continuation.

Entrepreneur as an innovator

According to Joseph A. Schumpeter “An entrepreneur in an advanced economy is an individual

who introduces something new in the economy a method of production not yet tested by
experience in the branch of manufacture concerned, a product with which consumers are not
yet familiar, a new source of raw material orof new markets and the life”

According to him the functions of entrepreneur are

1. Introduction of new product

2. Introduction of new methods of production
3. Developing new markets and fresh sources of raw materials.
4. Make changes
Entrepreneur as Risk-Bearer
Bearer

According to Richard Cantillon “An Entrepreneur is defined as an agent who buys factors of
production
uction at certain prices in order to combine them into a product with view to selling it at
uncertain prices in future”

Entrepreneur as Organiser
According to Jean-Baptiste
Baptiste Say “An Entrepreneur is one who combines the land of one, the
labour of other and capital of yet another and thus, produces a product”

By selling the product, he pays interest on Capital, rent on Land, Wages to Labourers and
what remains is his Profit.

Hence an entrepreneur can be defined as a person who tries to create something new, organizes
production and undertakes risks and handles economic uncertainty involved in enterprise.

Characteristics of Entrepreneur

Dr. Prashant
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TECHNOLOGICAL INNOVATION MANAGEMENT AND ENTREPRENEURSHIP (18ES51)
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Department of Electronics and Communication Engineering

● Action oriented, highly motivated and ready to take risk at all levels toachieve a goal

● Should have unwavering determ

determination and commitment

● Creativeness and result oriented, hard working

● Accepts responsibilities with enthusiasm
● Self-confident, dedicated and self disciplined
● Both thinker and doer, planner and worker
● Future and vision, intelligent, imaginative and self-directed

Qualities of a successful Entrepreneur

The important qualities of an entrepreneur are:

1) Success and achievement: The entrepreneurs are self directed to achieve goals.
2) Risk bearer: He accepts risk, understand and manage risk.
3) Opportunity explorer: He always identifies opportunity and explores them.
4) Planner: He is a good planner and doer. He plans and follows the planssincerely to
achieve the goals.

5) Stress taker: He should accept and bear any amount of stress that may evolve in the
business.

6) Facing uncertainties: They should face the uncertainties and unexpectedoutcomes and
accept them.

7) Independent: He is independent and his own master. He is a job giver and notjob
seeker.

8) Flexible: He is an open minded person, flexible to adopt to demanding situationchanges.

9) Self-confident: He directs his abilities towards the accomplishment of goals.

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10) Motivator: He initiates and influences people, motivates the people toaccomplish the
goals.

Functions of an Entrepreneur

An Entrepreneur has to perform a number of functions right from the generation of idea up to
the establishment of an enterprise. He also has to perform functions for successful
successfu running of
his enterprise. The following are the main functions of an Entrepreneur.

1. Idea generation:: The first and the most important function of an Entrepreneur is idea
generation. Idea generation implies product selection and project identification. Idea
generation is possible through vision, insight, keen observation, education, experience and
exposure. This needs scanning of business environment and market survey.

2. Determination of business objectives: Entrepreneur has to state and lay down the
businesss objectives. The Entrepreneur must be clear about the nature and type of business in
accordance with the objectives determined by him.

3. Rising of funds: All the activities of the business depend upon the finance and hence fund
raising is an important function
ion of an Entrepreneur. An Entrepreneur can raise the fund from
internal source as well as external source. He should be aware of different sources of funds.
He should also have complete knowledge of government sponsored schemes such as PMRY,
SASY, REAP etc.
c. in which he can get government assistance in the form of seed capital, fixed
and working capital forhis business.

4. Procurement of machines and materials: Another important function

fun of an
Entrepreneur is to procure raw materials and machines. Entrepreneur has to identify cheap
and regular sources of raw materials which will help him to reduce the cost of production.

While procuring machineries he should specify the technical details and the capacity. He
should consider the warranty, after sales service facilities etc before procuring machineries.

5. Market research: Market research is the systematic collection of data regarding the
product which the Entrepreneur wants to manufacture
manufacture.. Entrepreneur has to undertake

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Department of Electronics and Communication Engineering

market research to know the details of the intending product, i.e. the demand for the product,
size of the market/customers, the supply of the product, competition, the price of the product
etc.

6. Determining form of enterpris

enterprise: Entrepreneur has to determine form of enterprise
depending upon the nature of the product, volume of investment etc. The forms of ownership
are sole proprietorship, partnership, Joint Stock Company, co
co- operative society etc.
Determination of ownership right is essential on the part of the entrepreneur to acquire legal
title to assets.

7. Recruitment of manpower: To carry out this function an Entrepreneur has to perform

the following activities.

a) Estimating man power requirement for short term and long term.
b) Laying down the selection procedure.
c) Designing scheme of compensation.
d) Laying down the service rules.
e) Designing mechanism for training and development.
8. Implementation of the project: Entrepreneur has to develop schedule and action plan
for the implementation of the project. The project must be implemented in a time bound
manner. All the activities from the beginning to the end are to be accomplished by him in
accordance with the
he implementation schedule to avoid cost and time over run. He has to
organize various resources and coordinate various activities. This implementation of the
project is an important function of the Entrepreneur.

All the above functions of the Entrepreneur can precisely be put into three categories of
innovation, risk bearing, and organizing and managing functions.

Types of Entrepreneur

Entrepreneurs are classified in a number of ways as discussed below.

Clearance Danhof’s Classifications: Danhof classifies Entrepreneur into four types.

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Department of Electronics and Communication Engineering

1) Innovative entrepreneur: This category of Entrepreneur is characterized by their

innovativeness. This type of Entrepreneur, sense the opportunities for introduction of new
ideas, new technology, discovering of new markets and creating new organizations. Such
Entrepreneur are very much helpful for their country because they bring about a
transformation in life style.

2) Adoptive or imitative entrepreneur: Such entrepreneurs imitate the existing

entrepreneur and set their enterpris
enterprise in the same manner. Instead of innovation, they may
just adopt the technology and methods innovated by others. Such types of entrepreneur are
particularly suitable for under
under-developed countries for imitating the new combination of
production already available in developed countries.

3) Fabian entrepreneurs: Fabian entrepreneurs are characterized by great caution 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 enterprises.

4) Drone entrepreneurs: Such entrepreneurs are conservative or orthodox in outlook.

They always feel comfortable with their old fashioned technology of production even though
technologies have changed. They never like to get rid of their traditional business, traditional
machineries and traditional system of businesseven at the cost of reduced returns.

Arthur H Cole Classification: Arthur H Cole classifies entrepreneurs as empirical, rational and
cognitive entrepreneur.

1) Empirical: He is entrepreneur hardly introduces anything revolutionary and follows the

principle of rule of thumb.

2) Rational: The rational entrepreneur is well informed about the general economic
conditions and introduces changes, which look more revolutionary.

Dr. Prashant
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TECHNOLOGICAL INNOVATION MANAGEMENT AND ENTREPRENEURSHIP (18ES51)
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Department of Electronics and Communication Engineering

3) Cognitive: Cognitive entrepreneur is well informed, draws upon the advice and services
of experts and introduces changes that reflect complete break from the existing scheme of
enterprise.

Classification Based on the Scale of Enterprise

1) Small scale: These entrepreneurs do not posses the necessary talents and resources to
initiate large-scale production and to introduce revolutionary technological changes.

2) Large scale: They possess the necessary financial and other resources to initiate and
introduce new technological changes. They possess talent and research and development
facilities.

Other Classification
Following are some more types of entrepreneurs listed by behavior scientists.

Solo operators:: These are the entrepreneurs who essentially work alone, introducetheir own
capital and if essential employ very few employees. In the beginning most of the
entrepreneurs start their enterprises like them.

Active partners:: Such entrepreneurs jointly put their efforts and resources. They actively
participate in managing the daily routine of the business concern. Entrepreneurs who only
contribute their
eir funds but not actively participate in the business are called simply ‘Partners’.

Inventors: Such entrepreneurs are creative in character and feel happy in inventing new
products, technologies and methods of production. Their basic interest lies in research and
innovative activities.

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Department of Electronics and Communication Engineering

Challenge: Such entrepreneurs plunge into industry/business because of the challenge it

presents. When one challenge seems to be met, they begin to look for new challenges. They
convert odds and adversities into opportunitie
opportunities and make profit.

Buyers: These are the entrepreneurs who do not like to face the hassles of building
infrastructure and other facilities. They simply purchase the existing one and by using their
experience and expertise try to run the enterprise successfully.

Life timers: Such entrepreneurs take business as an integral point of their life. Family
enterprises, which mainly depend on exercise of personal skill, fall in this category.

Industrial entrepreneurs: Such entrepreneurs engage in manufacturing and selling

products.

Service entrepreneurs: Such entrepreneurs engage in service activities like repair,

consultancy, beauty parlor etc where entrepreneurs provide service to people.
peo

Business entrepreneurs: They are also called as trading entrepreneurs which buy and sell
goods.

Agricultural entrepreneurs: They engage themselves in agricultural activities like

horticulture, floriculture, animal husbandry, poultry etc.

Corporate entrepreneurs: Corporate entrepreneurs undertake their business activities

under legally registered company or trust.

Rural entrepreneurs: Entrepreneur’s selecting rural

rural-based
based industrial opportunity in either
khadi or village industries sector or in farm entr
entrepreneurship
epreneurship are regarded as rural
entrepreneurs.

Women entrepreneurs:: According to government of India an entrepreneurs is defined as an

enterprise owned and controlled by a woman and having minimum financial interests of 51%
of the capital and giving at least 51% of the employment generated in the enterprise to
women. Women entrepreneurs play an important rolein economy especially in rural areas.

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Type of entrepreneurs
1) According to the type of business

i) Business entrepreneur

ii) trading entrepreneur

iii) industrial entrepreneur
(a)Large (b)medium (c)small and (d)tiny

iv) corporate entrepreneur

v) agricultural entrepreneur

(a) plantation b) horticulture c) dairy d) forestry

vi) Retail entrepreneur

vii)Service entrepreneur
2) According to the use of technology

i) technical (ii) non technical (iii) professional (iv)high tech (v)low tech
3) According to the motivation

(i)pure (ii)induced (iii)motivated (iv)spontaneous

4) According to growth i)growth (ii)super growth

5) According to stages of development

(i) modern (ii)classical (iii)urban

6) According to the area

(i) urban (ii) rural

7) According to the gender and age(i)men (ii) women

8) According to the sale of operationi)small (ii)large

9) Entrepreneurs and motivation:

Are those entrepreneurs who use the motivation as a force to achieve theirobjectives are
classified as

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(i) Pure: Is an individual who is motivated by the economic rewards. And undertakes an
entrepreneurial activity out of personal satisfaction, ego and status.

(ii) Induced: Is one who is induced to take up entrepreneurship task due to the policy
measures of the government which provides assistance, incentives, concessions and
necessary overhead facilities to star new venture.

(iii) Motivated entrepreneurs: Are motivated by the desire of self fulfillment. They come
into being because of the making and marketing of the new product for the use of customers
who is further motivated by the reward in terms of profit.

(iii) Spontaneous entrepreneur: Start their business by their natural talents are the
persons who take initiative, are bold confidence and have strong conviction in their inborn
ability.

MYTHS OF ENTREPRENEURSHIP

1. Entrepreneurs are born not made

Characteristics
haracteristics of entrepreneurs are not taught, however the recognition of
entrepreneurship as a discipline helping to dispel the myth.

2. Entrepreneurs are academic and social misfits

3. Entrepreneurs fit an ideal profile

Based on case studies and research find

findings,
ings, researchers presented checklist of
characteristics of successful entrepreneur. But standard entrepreneurial profile is hard
to assemble. Contemporary studies provide more accurate insights into the various
profiles of successful entrepreneur.

4. Money is essential to become an entrepreneur.

Large number of business failure occurs because of lack of adequate financing.

Yet, money itself is not only the protection against the failure.

5. Luck is needed to be an entrepreneur

“Luck happens when preparation meets opportunity”. Prepared entrepreneur

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Exploits the opportunity when it arises often appears to be lucky. Luck is a combination
of preparation, determination, desire, knowledge and innovativeness.

6. Great idea is vital ingredient in a recipe for success.

7. Best friend will be a great business partner

Teaming up with
h known people may not be a good idea as it may lead more
misunderstanding.

8. Having no boss is great fun

Its not just having no boss is great fun as it is required to observe vendors,
bankers, investors, suppliers, customers continuously.

9. One can make lots of money

Many sacrifices are needed to expect lot of money.

10. Putting down the optimism and survival strategy most businers refuse to accept
the possibility of failure.

11. Life is much simpler if I work myself

As a contrary, working for yourself is more strenuous than working for others.

ENTREPRENURIAL DEVELOPMENT MODELS

1 Psychological models

2 Sociological models
3 Integrated models

1. Psychological models

● McClelland gave significant lead in identification of determinants ofentrepreneurship.

He founds that identifying

dentifying achievement orientation as the key variablein the
development of entrepreneurship.

He also suggests motivation training programme as a policy measuremake

entrepreneur willing and eager to exploit the oppourtunity.

● Evertt Hagen’s theory of social change emphasis on “creative

personality” and explains the casual sequence of entrepreneurial behavior

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● John Kunkel suggest “Behaviourist model” and he also suggest that

entrepreneurial
reneurial behavior is a function of surrounding social structure. Kunkel model is
based upon the experimental psychology.

2. Sociological model

● Frank W Young’s theory of entrepreneurship is a theory of change based upon the

society’s incorporation of relative sub-groups.

The relativeness of subsub-group

group with low status in a larger society will lead to
entrepreneurial behavior if the group has better institutional resources than others in
the society at the same level.

3. Integrated Models

● T V Rao in “Entrepreneuria
“Entrepreneurial disposition” has included following factors.
(a) Need to motive for the prospective entrepreneur has a greatestpossibility of achieving
the goals.

(b) Long term involvement either at thinking level or activity level inentrepreneurial
activity.

(c) Personal, social and material resources are related to entry and successin
entrepreneurial activity.

(d) Socio-political system to be perceived as suitable for establishmentand development of

his enterprise.

B S Venkata Rao’s 5 stages for promoting small entrepreneurship

1. Stimulation

Includes creation of an industrial atmosphere, policy statement, publicity of industrial

development programmes, formation of schemes, creation of support institution.

2. Identification

Identify prospective entrepreneur in rural artisans, factory workers, graduates in

business administration and management.

3. Development

Include organization of motivation and managerial training programmes with advice to

technology, formulation of bankable project, location.

Dr. Prashant
hant P. Patavardhan
TECHNOLOGICAL INNOVATION MANAGEMENT AND ENTREPRENEURSHIP (18ES51)
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Department of Electronics and Communication Engineering

4. Promotion

Include govt. policy initiatives promoting small entrepreneurship.

5. Follow up

Includes reviewing the policies and programmes of government andseeking follow up

with a view to making more effective.

M P AKHORI’s ENTREPRENURIAL DEVELOPMENT CYCLE

Suggested following components for the promotion and development of entrepreneurship.

1. Stimulatory activities
These activities ensure the emergence of entrepreneurs in the society. They generate
initial motivation and offer opportunity to acquire skill which can be achieved by the
following activities.

o Entrepreneurial education

o Planned publicity for entrepreneurial opportunities

o Identification of potential entrepreneurial through scientific methods

o Motivation training to new entrepreneurs

o Help and guidance in selecting the products and preparing project reports

o Making available techno-economic

economic information and product profiles

o Evolving locally suitable new products and processes

o Availability of local agencies with trained personnel

o Creating entrepreneurial forums

o Recognition of entrepreneurs

2. Support activities
These activities help a person to develop into entrepreneur. These activities nurture and
help entrepreneurship to grow. The various support are given below

o Registration of unit

o Arranging finance

o Providing infrastructure

Dr. Prashant
hant P. Patavardhan
TECHNOLOGICAL INNOVATION MANAGEMENT AND ENTREPRENEURSHIP (18ES51)
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RV Institute of Technology and Management
Department of Electronics and Communication Engineering

o Guidance for selecting and obtaining machinery

o Supply of scare new materials

o Getting license/import licenses

o Providing common facilities

o Granting tax relief/subsidy

o Offering management consultancy service

o Help marketing the product

o Providing information

3. Sustaining activities
These activities help in continuous and efficient functioning of entrepreneurship. The
various sustaining activities are as follows.

o Help modernization

o Help diversification/expansion/substitute production

o Additional financing

o Deferring repayment

o Diagnostic industrial extension/consultancy services

o Production units legislation/policy change

o Product reservation/ creating new avenues for marketing

o Quality testing and approving services

o Need-based common facilities centres

Problem faced by entrepreneurs

A large number of entrepreneurs particularly in the small enterprises fail due to several
problems and barriers. Karl. H. Vesper has identified the following barriers:

i. Lack of a viable concept

ii. Lack of market knowledge

Dr. Prashant
hant P. Patavardhan
TECHNOLOGICAL INNOVATION MANAGEMENT AND ENTREPRENEURSHIP (18ES51)
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RV Institute of Technology and Management
Department of Electronics and Communication Engineering

iii. Lack of technical skills

iv. Lack of seed capital
v. Lack of business know how
vi. Lack of motivation
vii. Social stigma
viii. Monopoly and protectionism
ix. Inhibitions due to patent
x. Government regulations.
xi. Globalization and entry of foreign goods.

Problems can be broadly divided into INTERNAL and EXTERNAL problems

INTERNAL Problem

1. Planning
(a) Technical feasibility
▪ Inadequate technical know
know-how

▪ Locational disadvantage
▪ Outdated production process
(b) Economic viability
▪ High cost of inputs
▪ Break-even point too high
▪ Uneconomic size of project
▪ Choice of idea
▪ Feeble structure
▪ Faulty planning

Dr. Prashant
hant P. Patavardhan
TECHNOLOGICAL INNOVATION MANAGEMENT AND ENTREPRENEURSHIP (18ES51)
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RV Institute of Technology and Management
Department of Electronics and Communication Engineering

▪ Lack of strategies, motivation and vision

▪ Overestimation of demand
2. Implementation
3. Production
(a) Production management
(b) Labour management
(c) Marketing management
(d) Financial management
(e) Administrative management

EXTERNAL problems of entrepreneur

● Infrastructural
● Financial
● Marketing
● Marketing
● Taxation
● Rawmaterial
● Industrial and financial regulations
● Inspection
● Technology
● Lack of direction
● Competitive and volatile environment

Other management problems

1. Managerial deficiency
2. Finance

Dr. Prashant
hant P. Patavardhan
TECHNOLOGICAL INNOVATION MANAGEMENT AND ENTREPRENEURSHIP (18ES51)
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RV Institute of Technology and Management
Department of Electronics and Communication Engineering

3. Manufacturing and technical problems

4. Product Planning
5. Selection of equipment, plant, machinery
6. Human resource development
7. Technical know-how
8. Preparation of project report

CAPACITY BUILDING OF ENTREPRENURSHIP (VERY IMPORTANT)

I

1. Create the right environment for success

2. Ensures that entrepreneurs have access to right skills
3. Ensures that entrepreneurs have access to “smart” capital Eg: Venture capitalist, Angel
investors

4. Enable networking and exchange

Dr. Prashant
hant P. Patavardhan
TECHNOLOGICAL INNOVATION MANAGEMENT AND ENTREPRENEURSHIP (18ES51)
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