UNIT-1

Entrepreneurship is the capability and readiness to create, organize, and drive an enterprise,
along with any of its concerns, in order to make a profit. The most popular example of
entrepreneurship is the starting of a new business.
In economics, entrepreneurship associated with land, labour, resources, and capital can make a
profit.

Definition of Entrepreneurship:-

Entrepreneurship is starting and developing a company, delivering something new to

the market, or organizing the means of production superiorly.

Entrepreneurship is the capability and willingness to set up, develop, organize, and
manage an enterprise along with any of its risks to make a profit.

Need of Entrepreneurship
The need for entrepreneurship is detailed down in the following section:

1. Passion, Perseverance & Persistence

Passion is a strong and uncontrollable emotion that is based on something higher to achieve than
what the person is carrying within himself. Perseverance is a mature emotion that comes through
experiences gathered and analysed. While persistence is the sail that will row the boat of
anentrepreneur through the toughest of climates.

2. Big Dreamer
Dreaming big further strengthens an entrepreneur with his ability to dream and see the wide
picture. This is the very first step that sets the path to self-discovery.

3. Learning
Learning is never to stop irrespective of age and thus arming oneself with education does play a
vital role in formingleadership qualities when needed.

4. Good Listener
The ability to contribute will only come once we have abundance in ourselves, and this comes by
absorbing the words of others. The ability to truly listen to the customers and employees is actually
what makes a difference. This very skill leads to a successful venture.

5. Financing Partner
Choosing a financing partner who understands the business needs is very much essential. This is
as critical as choosing the business which the entrepreneur wants to pursue. Also, a business loan
from the right lender will for sure play a pivotal role in realizing the dreams of becoming a
successful entrepreneur.
Entrepreneurship and its Scope
The scope of entrepreneurship is far-reaching.

• Entrepreneurship moves even beyond the closed system of an enterprise.

• Entrepreneurship in its capacity stimulates the economy which enables societal change
not only for fulfilling a need but also to generate revenue for the entrepreneur,
entrepreneurship thus provides jobs for the society and develops communities.
• Entrepreneurship instigates a lot more than the mere creation of business.
 • Entrepreneurship promotes the new business and provides opportunities to improve the
new business sectors.

Entrepreneurial traits and competencies:-

1. Initiative : It is an inner urge in an individual to do or initiate something. There is popular
saying ‘Well begun is half done’. It is the entrepreneur who takes or initiates the first move
towards setting up of an enterprise. Most of the innovators have got this urge to do
something different. Entrepreneur basically is an innovator who carries out new combinations
to initiate and accelerate the process of economic development.
2. Looking for Opportunity : An entrepreneur is always on the look out or searching for
opportunity and is ready to exploit it in the best interests of the organisation.
3. Persistence : An entrepreneur is never disheartened by failures. He believes in the
Japanese proverb ‘Fall seven times, stand up eight’. He follows Try-Try Again for overcoming
the obstacles that come in the way of achieving goals.
4. Information Seeker : A successful entrepreneur always keep his eyes and ear open and is
receptive to new ideas which can help him in realizing his goals. He is ready to consult expert
for getting their expert advise.
5. Quality Consciousness : Successful entrepreneurs do not believe in moderate or average
performance. They set high quality standards for themselves and then put in their best for achieving
these standards. They believe in excellence, which is reflected in everything they do.
6. Commitment to Work : Successful entrepreneurs are prepared to make all sacrifices for honoring
the commitments they have made. Whatever they commit, they take it is a moral binding for honoring
their commitments, irrespective of the costs involved.
7. Commitment to efficiency : Top performers are always keen to devise new methods aimed at
promoting efficiency. They are keen to evolve and try new methods aimed at making working easier,
simpler, better and economical.
8. Proper Planning : Successful entrepreneurs develop or evolve future course of action keeping in
mind the goals to be realized. They believe in developing relevant and realistic plans and ensure proper
execution of the same in their pursuit of attaining their goals.
9. Problem Solver : Successful entrepreneurs take problem as a challenge and put in their best for
Finding out the most appropriate solution for the same. They will first of all understand the problem
and then evolve appropriate strategy for overcoming the problem.
10. Self Confidence : Top performers are not cowed down by difficulties as they believe in their own
abilities and strengths. They have full faith on their knowledge, skill and competence and arc not
worried about future uncertainties.
11. Assertive : An assertive person knows what to say, when to say, how to say and whom to say. He
believes in his abilities and ensures that others fall in line with his thinking, aimed at promoting the
interests of the organisation.
12. Persuasive : A successful entrepreneur through his sound arguments and logical reasoning is in a
position to convince others to do the works the way he wants them to do. It is not physical but
intellectual force he will use for convincing others.
13. Effective Monitoring : Top performers ensure that everything is carried out in their organisations
as per their wishes. They ensure regular monitoring of the working so that the goals of the organisation
are achieved in best possible manner.
14. Employees Welfare : Future of the organisation depends on its employees. If the employees are
dedicated, committed and loyal, the organisation is bound to perform well. A successful entrepreneur
tries to promote organization’s interests through promotion of interests of the workers. He takes
personal interest in solving problems confronting workers and generates the feeling that there is
independence of the interests of workers and the management.
15. Effective Strategist : A successful entrepreneur possesses the ability to evolve relevant strategy,
aimed at safeguarding or promoting organisation’s interests. Strategy may be with respect to facing
future uncertainties or challenges posed by competitors.

Classification/Types of Entrepreneurs
Depending upon the level of willingness to create innovative ideas, there can be
the following types of entrepreneurs:
(i) Innovative Entrepreneurs – These entrepreneurs have the ability to think
newer, better and more economical ideas of business organisation and
management. They are the business leaders and contributors to the economic
development of a country. Inventions like the introduction of a small
car ‘Nano’ by Ratan Tata, organised retailing by Kishore Biyani, making mobile
phones available to the common man by Anil Ambani are the works of innovative
entrepreneurs.
(ii) Imitating Entrepreneurs – These entrepreneurs are people who follow the
path shown by innovative entrepreneurs. They imitate innovative entrepreneurs
because the environment in which they operate is such that it does not permit
them to have creative and innovative ideas on their own. In our country also, a
large number of such entrepreneurs are found in every field of business activity.
Development of small shopping complexes is the work of imitating entrepreneurs.
All the small car manufacturers now are the imitating entrepreneur s.
(iii) Fabian Entrepreneurs – Fabian entrepreneurs are those individuals who do
not show initiative in visualising and implementing new ideas and innovations. On
the contrary, they like to wait for some development, which would motivate them
to initiate unless there is an imminent threat to their very existence.

Meaning of ‘Fabian’- He/she is ‘a person seeking victory by delay rath

er than by a decisive battle’ & ‘Drone’ is ‘a person who lives on the lab
our of others’

(iv) Drone Entrepreneurs – Drone entrepreneurs are those individuals who are
satisfied with the existing mode and speed of business activity and show no
inclination in gaining market leadership. In other words, drone entrepreneurs
are ‘die-hard conservatives’ and even ready to suffer the loss of business.
(v) Social Entrepreneurs – Social entrepreneurs drive social innovation and
transformation in various fields including education, health, human rights,
workers’ rights, environment and enterprise development. Dr. Mohammed Yunus
of Bangladesh who started Gramin Bank is a case of social entrepreneur.
(vi) 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.
(vii) Trading Entrepreneur – As the name itself suggests, the trading
entrepreneur undertakes the trading activities. He/she procures the finished
products from the manufacturers and sells these to the customers directly or
through a retailer. These serve as the middlemen as wholesalers, dealers, and
retailers between the manufacturers and customers.
(viii) 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.
(ix) Women Entrepreneurs – Women entrepreneurship is defined as the
enterprises owned and controlled by a woman/women having a minimum
financial stake of 51 per cent of the capital and giving at least 51 per cent of
employment generated in the enterprises to women.
(x) Inventors & Challenger Entrepreneurs – Inventor entrepreneurs with their
competence and inventiveness invent new products. Their basic interest lies in
research and innovative activities & Challenger entrepreneurs plunge into
industry because of the challenges it presents. When one challenge seems to be
met, they begin to look for new challenges.
(xi) Life-Timer Entrepreneurs – 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.
Factors Affecting Entrepreneurial Growth :The factors that affect the growth
of entrepreneurship are classified as economic and non-economic factors. These
factors are as follows :

Factors Affecting Growth of Entrepreneurship :

Economic Factors :
• Economic Resources
• Economic Conditions
• Economic Policies
• Labour Policies
• Trade Policies
• Tariff Policies
• Incentives and Subsidies
Non-Economic Factors :
• Social Factors
• Cultural Factors
• Personality Factors
• Technological
• Factors
• Educational Factors
Economic Factors :
These factors act multi-dimensionally and consist of all those forces which are
essential for conducting economic activities in a country. These factors include:
1) Economic Resources :
Sufficiency of economic resources is an important factor for the growth of business.
These resources include land, labour, and capital which are sometimes inaccessible
to the entrepreneurs. Therefore, entrepreneurs get discouraged by the scarcity of
economic resources.
2) Economic Conditions :
The feasibility of an enterprise is governed by the economic conditions. These
conditions involve interest rates, per capital income, inflation, purchasing power of
consumers, unemployment, etc. Some of these factors may affect the operations and
processes of the enterprise.
3) Economic Policies :
Economic policies define the course of action and size of the business. In a socialist
economy, all the decisions regarding what to produce, how to produce, for whom to
produce, and how much to produce are taken by the government. The policies which
may affect the business are monetary policy, budget, tax policy, etc.
4) Labour Policies :
In any business, the most vital factor of production is labour. The volume and costs
of production mainly depend on the productivity of labour. For the successful set up
of a venture, it is very important to follow favourable labour policies.
5) Trade Policies :
Trade policies manage the adequate supply of products and services within the
country and also regulate the adverse balance of payments. Therefore, sufficient
supply of resources may motivate the entrepreneurs to establish a new venture or
expand their existing businesses.
6) Tariff Policies :
Favourable and effective tariff policies allow the entrepreneurs to expand their
operations. But with the increase in tariff rates, the demand of consumers decreases
and the margin of profit for entrepreneurs also shrinks.
7) Incentives and Subsidies :
Incentives and subsidies are the benefits provided by the government which act as an
encouragement for entrepreneurs. They provide a high margin at low rate of risk.
However, unavailability of these schemes or exemptions may hinder the growth of
entrepreneurs.
Non-Economic Factors :
These factors include social factors, cultural factors, technological factors, etc., which
are discussed as follows:
1) Social Factors :
These factors deal with the perception, attitudes, and lifestyle of the society. They
largely impact the motivation level of the
entrepreneurs. A rational society may help the entrepreneurs in appropriate
decision-making where the resources to be used and the procedure for production
are decided on the basis of prevailing business environment.
2) Cultural Factors :
Culture of any country highly influences the entrepreneurship growth. These factors
include a set of learning, behaviors, and basic values of people. Only a money-
oriented culture can.value and acclaim the importance of entrepreneurship, e.g.,
protestant countries, such countries focus on work ethic and value of work.
3) Personality Factors :
Many developed and developing countries consider entrepreneurs as 'exploiter'. This
creates a negative impact on the personality of the entrepreneurs. Therefore,
sometimes it becomes' challenging for an entrepreneur to operate in a planned
economy, where the government has set the socio-economic framework. So, in order
to sustain the business enterprise, entrepreneurs have to adjust with their attitudes
or processes.
4) Technological Factors :
The introduction of new technology has generated numerous opportunities for
entrepreneurs to earn profit. The countries with high technological level are likely to
have high entrepreneurial growth.
5) Educational Factors :
There are entrepreneurs who have a strong educational background and there are
some who are under-educated. But, the growth of an entrepreneur can only be
evaluated from his/her level of success.

McClelland's Achievement-Based Motivational

Theory and Models
David McClelland pioneered workplace motivational thinking,
developing achievement-based motivational theory and models, and
promoted improvements in employee assessment methods, advocating
competency-based assessments and tests, arguing them to be better than
traditional IQ and personality-based tests.
Three Types of Motivation
David McClelland is most noted for describing three types of motivational need,
which he identified in his 1961 book, The Achieving Society:

1. Achievement motivation (n-ach)

2. Authority/power motivation (n-pow)
3. Affiliation motivation (n-affil)

These needs are found to varying degrees in all workers and managers, and this
mix of motivational needs characterises a person's or manager's style and
behaviour, both in terms of being motivated and in the management and
motivation of others.

1. The Need for Achievement (n-ach)

• The n-ach person is 'achievement motivated' and therefore seeks
achievement, attainment of realistic but challenging goals, and
advancement in the job.
• There is a strong need for feedback as to achievement and progress and a
need for a sense of accomplishment.

2. The Need for Authority and Power (n-pow)

• The n-pow person is 'authority motivated'. This driver produces a need to
be influential, effective and to make an impact.
• There is a strong need to lead and for their ideas to prevail.
• There is also motivation and a need towards increasing personal status
and prestige.

3. The Need for Affiliation (n-Affil)

• The n-Affil person is 'affiliation motivated', has a need for friendly
relationships and is motivated towards interaction with other people.
• The affiliation driver produces motivation and needs to be liked and held in
popular regard.
• These people are team players.

Who Is an Intrapreneur?

An intrapreneur is an employee who is tasked with developing an innovative idea or

project within a company. The intrapreneur may not face the outsized risks or reap
the outsized rewards of an entrepreneur; however, the intrapreneur has access to the
resources and capabilities of an established company.
KEY TAKEAWAYS

• An intrapreneur works inside a company to develop an innovative idea or

project that will enhance the company's future.
• The term "intrapreneur" is a portmanteau of the two words "internal" and
"entrepreneur." It was first coined by Gifford Pinchot III and Elizabeth S. Pinchot
in a 1978 white paper.1
• The intrapreneur is generally given autonomy to work on a project that may
have a considerable impact on the company.
• Over time, an intrapreneur may turn into an entrepreneur and start their own
venture outside of the established organization.
• Intrapreneurs are typically highly motivated individuals who have specific skill
sets—as well as leadership abilities and an innovative vision that others in the
corporation can get behind.
Entrepreneur vs. Intrapreneur

Comparison Chart
BASIS
ENTREPRENEUR INTRAPRENEUR
FORCOMPARISON

Meaning Entrepreneur refers to a Intrapreneur refers to an

person who set up his employee of the organization
own business with a new who is in charge of
idea or concept. undertaking innovations in
product, service, process etc.

Approach Intuitive Restorative

Resources Uses own resources. Use resources provided by

the company.

Capital Raised by him. Financed by the company.

Enterprise Newly established An existing one

Dependency Independent Dependent

Risk Borne by the Taken by the company.

entrepreneur himself.
BASIS
ENTREPRENEUR INTRAPRENEUR
FORCOMPARISON

Works for Creating a leading Change and renew the

position in the market. existing organizational
system and culture.

Entrepreneurial Development Program(EDP)

Meaning:

As the term itself denotes, EDP is a programme meant to develop entrepreneurial abilities
among the people. In other words, it refers to inculcation, development, and polishing of
entrepreneurial skills into a person needed to establish and successfully run his / her
enterprise. Entrepreneurship Development Programme (EDP) is a programme which helps in
developing entrepreneurial abilities. The skills that are required to run a business successfully
is developed among the students through this programme. Sometimes, students may have
skills but it requires polishing and incubation.

Definition

According to Small Industries Extension and Training Institute (SIET 1974), now National
Institute of Small Industry Extension Training (NISIET), Hyderabad defined EDP as “an
attempt to develop a person as entrepreneur through structural training. The main purpose of
such entrepreneurship development programme is to widen the base of entrepreneurship by
development achievement motivation and entrepreneurial skills among the less privileged
sections of the society.”

According to N. P. Singh (1985), “Entrepreneurship Development Programme is designed to

help an individual in strengthening his entrepreneurial motive and in acquiring skills and
capabilities necessary for playing his entrepreneurial role effectively. It is necessary to promote
this understanding of motives and their impact on entrepreneurial values and behaviour for
this purpose.”

Features of EDP

Some of the features of EDP are discussed as follows:

(a) Identification and careful selection of entrepreneurs for training;

(b) Developing the entrepreneurial capabilities of the trainee;

(c) Equipping the trainee with the basic managerial understanding and strategies;

(d) Ensuring a viable industrial project for each potential entrepreneur;

(e) Helping him to secure the necessary financial, infrastructural and related assistance; and

(f) Training cost is highly subsidised and only token fee is charged. A deposit is, however,
taken to ensure commitment of participants.

Objectives of EDP: The major objectives of the Entrepreneurship Development Programmes

(EDPs) are to:

a. Develop and strengthen the entrepreneurial quality, i.e. motivation or need for achievement.

b. Analyse environmental set up relating to small industry and small business.

c. Select the product. d. Formulate proposal for the product.

e. Understand the process and procedure involved in setting up a small enterprise.

f. Know the sources of help and support available for starting a small scale industry.

g. Acquire the necessary managerial skills required to run a small-scale industry.

h. Know the pros and cons in becoming an entrepreneur.

i. Appreciate the needed entrepreneurial discipline.

j. Besides, some of the other important objectives of the EDPs are to:

k. Let the entrepreneur himself / herself set or reset objectives for his / her enterprise and strive
for their realization.

l. Prepare him / her to accept the uncertainty in running a business.

m. Enable him / her to take decisions.

n. Enable to communicate clearly and effectively.

o. Develop a broad vision about the business.

p. Make him subscribe to the industrial democracy.

q. Develop passion for integrity and honesty.

r. Make him learn compliance with law.

Roles of EDP

An Entrepreneurship Development Programme primarily plays four roles to help an individual

to become an entrepreneur. They are:

• Stimulatory Role: It aims at influencing people in large number to be the entrepreneur. This
includes:

1. developing managerial, technical, financial, and marketing skill

2. inculcating personality traits

3. promotes and reforms entrepreneurial behavior and values

4. identifying a potential entrepreneur applying scientific methods

5. motivational training and building a proper attitude

6. strengthening the motive of a person and giving recognition

7. the valuable know-how of the local products and the processes help in the selection of
products, preparation of project reports

• Supportive Role: It helps in the following ways:

1. registration of the business

2. procurement of fund

3. Incubation support

4. Team building and team development support

5. Mentorship and guidance from industry experts

6. Providing tax relief, subsidy, government schemes etc.

7. guidance in product marketing 8. support for management consultancy

•Sustaining Role: It aims at providing an effective safeguard to businesses to sustain against
the cut-throat market competition. This includes:

1. help in modernization, expansion, and diversification

2. additional financing for further development

3. Global Networking Opportunities

4. creating new marketing processes

5. helping access to improved services and co-working centers

•Socio-economic Role: It aims at upgrading the socio-economic status of the public and
includes:

1. identifying entrepreneurial qualities in practicality

2. creating employment opportunities in micro, small, and medium industries on an immediate
basis
3. arresting concentration of industries by supporting regional development in a balanced
manner
4. focusing on the equal distribution of income and wealth of the nation
5. channelizing the latent resources for building an enterprise