GOVERNMENT ENGINEERING COLLEGE JHALAWAR

Department of Management of Studies

Discipline : MBA
Semester/Year: II Semester Session 2017-18
Course/Paper : : M-207: New Enterprise and Innovation Management (NE&IM)
Name of Faculty : Hitesh Sharma

Model Question Paper -I (With suggested solution)

Q.1 Define the concept of Enterprise.

Ans. An entrepreneur is a person who starts an enterprise. The process of creation is called
entrepreneurship. The entrepreneur is the actor and entrepreneurship is the act. The outcome of
the actor and the act is called the enterprise. An enterprise is a business orgnanisation that is
formed and which provides goods and services, creates jobs, contributes to national income,
exports and overall economic development.

Q.2 Differentiate between Entrepreneur and Entrepreneurship.

Ans. The term ‘entrepreneur’ is used to describe the people who establish and manager their
own business. The process involved is called entrepreneurship. Entrepreneurship is an
abstraction whereas entrepreneurs are living people.
Entrepreneurship is the outcome of complex socio-economic, psychological and other factors.
Entrepreneur is the key individual central to entrepreneurship who makes things happen.
Entrepreneur is the actor, entrepreneurship is the act. Entrepreneurship is the most effective way
to bridging the gap between scientific innovations and the market place by creating new
enterprises. An entrepreneur is the catalyst who brings about the change.

Q.3 What are the Physical & Mental Qualities of an entrepreneur are as follows:
Ans. Physical & Mental Qualities of an entrepreneur are as follows:

it of adventure (in fact, the word "adventure" is derived from the Latin word
meaning "to venture")

-confident and self-reliant

-oriented
versatile

An eye for opportunity: Many entrepreneurs start by finding a need and quickly satisfying it.

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 Independence: Even though most entrepreneurs know how to work within the framework for

An appetite for hard work: Most entrepreneurs start out working long, hard hours with little
pay.
Self-confidence: Entrepreneurs must demonstrate extreme self-confidence in order to cope

Discipline: Successful entrepreneurs resist the temptation to do what is unimportant or the

easiest
Judgment: Successful entrepreneurs have the ability to think quickly and make a wise
decision.
Ability to accept change: Change occurs frequently when you own your own business, the
entrepreneur thrives on changes and their businesses grow.
Make stress work for them: On the roller coaster to business success the entrepreneur often
copes by focusing on the end result and not the process of getting there.
Need to achieve: Although they keep an "eye" on profits, this is often secondary to the drive
toward personal success.
Focus on profits: Successful entrepreneurs always have the profit margin in sight and know
that their business success is measured by profits. Is this your profile or would you rather do your
job, pick up your paycheck and leave the headaches to someone else? Most of us, quite easily,
choose the later.

Q.4 Discuss major disadvantages of being an entrepreneur in brief.

Ans . Some of the major disadvantages of being an entrepreneur are:
 Becoming an entrepreneur means, you have to leave behind the security of having a
paycheck each month.
 Although entrepreneurs benefit from a flexible schedule they often have to work very long
hours particularly in the start-up phase. Furthermore, entrepreneurs’ work schedules are
never predictable and they must deal with emergencies that may occur at any time.
 Being responsible for all decisions can be quite stressful and handling such responsibility can
be difficult.
 There is also great risk attached to entrepreneurship. The success or failure of the business
rests with the entrepreneur.

Q.5 Discuss major ways through which entrepreneurs can enter into international business.
Ans. ENTREPRENEURIAL ENTRY INTO INTERNATIONAL BUSINESS
The choice of entry method depends on the goals of the entrepreneur and the company's
strengths and weaknesses.
Exporting: As a general rule, an entrepreneur starts doing international business through
exporting.

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Indirect exporting involves a foreign purchaser in the local market or using an export
management firm. For certain commodities, foreign buyers seek out sources of supply.Export
management firms, another indirect method, are located in many commercial centers.
Direct exporting through independent distributors or through one's own overseas sales office is
another entry method. An independent foreign distributor directly contacts foreign customers and
takes care of all technicalities. Entrepreneurs who do not wish to give up control over marketing
can open overseas sales offices and hire their own salespeople.
Non equity arrangements: Non equity arrangements allow the entrepreneur to enter a market
without direct equity investment in the
foreign market.
Licensing : involves a manufacturer giving a foreign manufacturer the right to use a patent,
trademark, or technology in return for a royalty. This arrangement is most appropriate when the
entrepreneur has no prospect of entering the market through exporting or direct investment. The
process is usually low risk and an easy way to generate incremental income. Without careful
analysis, licensing arrangements have several pitfalls.
Turn-key projects: Lesser-developed countries are able to obtain manufacturing technology
without surrendering economic control through turn-key projects. A foreign entrepreneur builds
a facility, trains the workers, and trains the management to run the installation.
Once the operation is on line, it is turned over to local owners. Initial profits can lead to follow-
up sales. Financing is often provided by the local company or government.
Management contracts: Entrepreneurs can contract their management techniques and skills,
often following a turn-key project. The management contract allows the purchasing country to
gain foreign expertise without turning ownership over to a foreigner.
Direct Foreign Investment: The wholly owned foreign subsidiary has been the preferred mode
of ownership for direct investment.
Minority interests: The minority interest provides the firm with either a source of raw
materials or a captive market for products. Entrepreneurs have used minority positions to gain a
foothold in the
Market before making a major investment.
Joint ventures: Two firms get together and form a third company in which they share the
equity.

Q.6 Define the functions of an Entrepreneur

Comprehensive classification of the function of an entrepreneur is as follows:
Entrepreneurial Functions:

Innovation

Risk Taking

Organization Building

Promotional Functions:

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 Investigation of an idea

Detailed investigation of idea

Assembling the requirements

Financing the proposition

Managerial Function:

Planning

Organizing

Staffing

Directing

Motivation

Co-ordination

Controlling

Commercial Function:

Production

Marketing

Personnel

Accounting & Records

Finance

Q.7 Differentiate between Entrepreneurial and Entrepreneurial mindset.

Ans . Entrepreneur: An entrepreneur is an individual who conceives the idea of starting a new
venture, take all types of risks, not only to put the product or service into reality but also to make
it an extremely demanding one. He is someone who:

 Initiates and innovates a new concept,

 Recognises and utilises opportunity,
 Arranges and coordinates resources such as man, material, machine and capital,
 Take suitable actions,
 Faces risks and uncertainties,
 Establishes a startup company,
 Adds value to the product or service,

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  Takes decisions to make the product or service a profitable one,
 Is responsible for the profits or losses of the company.

Entrepreneurs are always the market leader regardless of the number of competitors because they
bring a relatively new concept in the market and introduce change.

Intrapreneur: An intrapreneur is nothing but an entrepreneur within the boundaries of the

organisation. An intrapreneur is an employee of a large organisation, who has the authority of
initiating creativity and innovation in the company’s products, services and projects, redesigning
the processes, workflows and system with the objective of transforming them into a successful
venture of the enterprise.

The intrapreneurs believe in change and do not fear failure, they discover new ideas, looks for
such opportunities that can benefit the whole organisation takes risks, promotes innovation to
improve the performance and profitability, resources are provided by the organisation. The job of
an intrapreneur is extremely challenging; hence they are appreciated and rewarded by the
organisation accordingly.

From last few years, it has become a trend that large corporations appoint intrapreneur within the
organisation, to bring operational excellence and gain competitive advantage.

Basis for
Entrepreneur Intrapreneur
Comparison
Entrepreneur refers to a person Intrapreneur refers to an employee of the
Meaning who set up his own business with organization who is in charge of undertaking
a new idea or concept. 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
Borne by the entrepreneur
Risk Taken by the company.
himself.
Creating a leading position in the Change and renew the existing
Works for
market. organizational system and culture

Key Differences Between Entrepreneur and Intrapreneur

The important distinguishing points between entrepreneur and intrapreneur, are given in the
following points:

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 1. An entrepreneur is defined as a person who establishes a new business with an innovative
idea or concept. An employee of the organisation who is authorised to undertake
innovations in product, service, process, system, etc. is known as Intrapreneur.
2. An entrepreneur is intuitive in nature, whereas an intrapreneur is restorative in nature.
3. An entrepreneur uses his own resources, i.e. man, machine, money, etc. while in the case
of an intrapreneur the resources are readily available, as they are provided to him by the
company.
4. An entrepreneur raises capital himself. Conversely, an intrapreneur does not need to raise
funds himself; rather it is provided by the company.
5. An entrepreneur works in a newly established company. On the other hand, an
intrapreneur is a part of an existing organisation.
6. An entrepreneur is his own boss, so he is independent to take decisions. As opposed to
intrapreneur, who works for the organisation, he cannot take independent decisions.
7. This is one of the salient features of an entrepreneur; he is capable of bearing risks and
uncertainties of the business. Unlike intrapreneur, in which the company bears all the
risks.
8. The entrepreneur works hard to enter the market successfully and create a place
subsequently. In contrast to Intrapreneur, who works for organization-wide change to
bring innovation, creativity and productivity.

Q.8 The path of entrepreneurship is normally filled with challenges. Discuss the various external
and internal challenges faced by small – scale enterprises at various phases.
Ans. Entrepreneurship comes with a host of challenges. Rewarding challenges, but harsh
challenges nonetheless. Experienced entrepreneurs have to deal with this no matter how long
they’ve been in business -- trying to establish a brand, adjust to match or exceed the
competition and keep your business profitable is a challenge no matter how many years you’ve
been in business.
Entrepreneurs face a number of problems in the promotion of units and during
production,marketing,distribution,procurement of raw material,and availing of incentives offered
by the State government.
The problems of entrepreneurs may be divided into two groups-external and internal.External
problems are those, which result from factors beyond the control of entrepreneurs while internal
problems are those, which are not influenced by external factors.
I. Internal Problems of Entrepreneurs
1. Planning
a) Technical feasibility
 Inadequate technical know-how.
 Locational disadvantage
 Outdated production process
b) Economic viability
 High cost of input.

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  Break-even point too high
 Uneconomic size of project
 Choice of idea
 Feeble structure
 Faulty planning
 Poor project implementation
 Lack of strategies
 Lack of vision
 Inadequate connections
 Lack of motivation
 Underestimation of financial requirements
 Unduly large investment in fixed assets
 Overestimation of demand
2. Implementation
Cost over-runs resulting from delays in getting licenses,sanctions and so on and inadequate
mobilization of finance.
3. Production
a) Production management
 Inappropriate product mix
 Poor quality control
 Poor capacity utilization
 High cost of production
 Poor inventory maintenance and replacement
 Lack of timely and adequate modernization and so on
 High wastage
 Poor production
b) Labour management
 Excising high wage structure
 Inefficient handling of labour problems
 Excessive manpower
 Poor Labour productivity
 Poor labour relations
 Lack of trained skilled labour or technically competent personnel
c) Marketing Management
 Dependence on a single customer or a limited number of customers/single or a limited
number of products.
 Poor sales realization
 Defective pricing policy
 Booking of large orders at fixed prices in an inflationary market
 Weak market organization
 Lack of market feed back and market research

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  Unsrupulous sale purchase practices
d) Financial management
 Poor resource management and financial planning
 Faulty costing
 Dividend policy
 General financial indiscipline and application of funds for unauthorized purposes
 Deficiency of funds
 Over trading
 Unfavourable gearing or keeping adverse debt equity ratio
 Inadequate working capital
 Absence of cost consciousness
 Lack of effective collection machinery
e) Administrative management
 Over centralization
 Lack of professionalism
 Lack of feedback to management (management Information System)
 Lack of timely diversification
 Excessive expenditure on R&D
II. External Problems of Entrepreneurs
a) Infrastructure
 Location
 Power
 Water
 Post Office and so on
 Communication
 Non-availability or irregular supply of critical raw materials or other inputs
 Transport bottlenecks
(b)Financial
 Capital
 Working capital
 Long term funds
 Recovery
 Marketing Taxation
 Raw material
 Industrial and financial regulations
 Inspections
 Technology
 Government policy Administrative hurdles
 Rampant corruption
 Lack of direction
 Competitive and volatile environment

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Q.9 Discuss the new and emerging paradigms of the competitive business world today and in
the decade to come. In the context of these emerging paradigms, discuss why it is relevant for
managers to develop an entrepreneurial mind and qualities.
Ans. The new paradigm is an emerging movement of thoughts and research being put into
practice successfully by entrepreneurs all around the world. It's the idea of building a business
motivated first and foremost by a higher purpose. The Businesses and the way of doing business
are changing at a very fast rate nowadays. In this era of breathtaking innovations and intense
competitions the companies who hold on to strategies and perspectives that worked in the past
risk being left behind.
Due to the emerging paradigms of the competitive business world today we can say that
concluded that:
1. Traditional sources of competitive advantage are expiring
2. A new playbook is emerging
3. Winners are outthinking their competition
Traditional sources are expiring
In the past, companies have primarily built competitive advantage by achieving customer
captivity, securing preferential access to resources, building economies of scale, and adopting
best practices. However, today’s winners actually cite economies of scale and best practices less
often than their losing peers.
Given the increasing ease with which smaller companies can “turn on” significant scale (e.g., by
outsourcing production and back-office functions) and given the speed with which best practices
are now being copied, then it isn’t surprising that these two traditional sources of advantage are
expiring.
A new playbook is emerging
Today’s outthinkers are embracing a radically different approach to building competitive
advantage. They are increasingly supplementing traditional sources of competitive advantage
with a new set of strategies. Three key differences between winners and losers stand out:
1. Winners are more comfortable coordinating outside resources and entities rather than trying to
own them.
2. Winners create what we call a “two-front battle” by strategically linking unrelated activities
and often attacking client needs across multiple industry borders.
3. Winners think longer term about strategic relationships (e.g., with clients and partners), often
entering as a guest and gradually establishing a trusted position and power.

Q.10 Examine the Entrepreneurial Core Competencies that help initialize a business idea, help
lead the business to its growth profile and lead the enterprise to go global.
Ans Entrepreneurial Core Competencies that help initialize a business idea can be classified
into four categories:

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  Personal characteristics.
 Interpersonal skills.
 Critical and creative thinking skills.
 Practical skills.
We'll now examine each category in more detail, and look at some of the questions you will need
to ask yourself if you want to become a successful entrepreneur.
Personal Characteristics:First, examine your personal characteristics, values, and beliefs. Do
you have the mindset that's typical of successful entrepreneurs?
Optimism: Are you an optimistic thinker?: Optimism is truly an asset, and it will help get you
through the tough times that many entrepreneurs experience as they find a business model that
works for them.
Vision: Can you easily see where things can be improved? Can you quickly grasp the "big
picture," and explain this to others? And can you create a compelling vision of the future, and
then inspire other people to engage with that vision?
Initiative: Do you have initiative, and instinctively start problem-solving or business
improvement projects?
Desire for Control: Do you enjoy being in charge and making decisions? Are you motivated
to lead others?
Drive and Persistence: Are you self-motivated and energetic? And are you prepared to work
hard, for a very long time, to realize your goals?
Risk Tolerance: Are you able to take risks, and make decisions when facts are uncertain?
Resilience: Are you resilient, so that you can pick yourself up when things don't go as
planned? And do you learn and grow from your mistakes and failures? (If you avoid taking
action because you're afraid of failing, our article on Overcoming Fear of Failure can help you
face your fears and move forward.)

Interpersonal Skills: As a successful entrepreneur, you'll have to work closely with people –
this is where it is critical to be able to build great relationships with your team, customers,
suppliers, shareholders, investors, and more.Some people are more gifted in this area than others,
but, fortunately, you can learn and improve these skills. The types of interpersonal skills you'll
need include:
Leadership and Motivation: Can you lead and motivate others to follow you and deliver
your vision? And are you able to delegate work to others? As a successful entrepreneur, you'll
have to depend on others to get beyond a very early stage in your business – there's just too much
to do all on your own!

Communication Skills: Are you competent with all types of communication .You need to be
able to communicate well to sell your vision of the future to investors, potential clients, team
members, and more.

Listening: Do you hear what others are telling you? Your ability to listen can make or break
you as an entrepreneur. Make sure that you're skilled at active listening and empathetic listening.
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 Personal Relations: Are you emotionally intelligent. The higher your EI, the easier it will be
for you to work with others. The good news is that you can improve your emotional intelligence!
Negotiation: Are you a good negotiator. Not only do you need to negotiate keen prices, you
also need to be able to resolve differences between people in a positive, mutually beneficial way.
Ethics: Do you deal with people based on respect, integrity, fairness, and truthfulness? Can
you lead ethically? You'll find it hard to build a happy, committed team if you deal with people –
staff, customers or suppliers – in a shabby way.

Critical and Creative Thinking Skills: As an entrepreneur, you also need to come up with fresh
ideas, and make good decisions about opportunities and potential projects.
Many people think that you're either born creative or you're not. However, creativity is a skill
that you can develop if you invest the time and effort.

Creative Thinking: Are you able to see situations from a variety of perspectives and come up
with original ideas? (There are many creativity tools that will help you do this.)

Problem Solving: How good are you at coming up with sound solutions to the problems
you're facing? Tools such as Cause & Effect Analysis, the 5 Whys Technique, and CATWOE
are just some of the problem-solving tools that you'll need to be familiar with.

Recognizing Opportunities: Do you recognize opportunities when they present themselves?

Can you spot a trend? And are you able to create a plan to take advantage of the opportunities
you identify?

Practical Skills:
You also need the practical skills and knowledge needed to produce goods or services
effectively, and run a company.

Goal Setting: Do you regularly set goals , create a plan to achieve them, and then carry out
that plan?

Planning and Organizing: Do you have the talents, skills, and abilities necessary to achieve
your goals? Can you coordinate people to achieve these efficiently and effectively? (Here,
effective project management skills are important, as are basic organization skills.) And do you
know how to develop a coherent, well thought-through business plan, including developing and
learning from appropriate financial forecasts

Decision Making: How good are you at making decisions? Do you make them based on
relevant information and by weighing the potential consequences? And are you confident in the
decisions that you make? Core decision-making tools include Decision Tree Analysis, Grid
Analysis, and Six Thinking Hats

You need knowledge in several areas when starting or running a business. For instance:

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 Business Knowledge: Do you have a good general knowledge of the main functional areas
of a business (sales, marketing, finance, and operations), and are you able to operate or
manage others in these areas with a reasonable degree of competence?
 Entrepreneurial Knowledge: Do you understand how entrepreneurs raise capital? And do
you understand the sheer amount of experimentation and hard work that may be needed to
find a business model that works for you?
 Opportunity-Specific Knowledge: Do you understand the market you're attempting to
enter, and do you know what you need to do to bring your product or service to market?
 Venture-Specific Knowledge: Do you know what you need to do to make this type of
business successful? And do you understand the specifics of the business that you want to
start? (This is where it's often useful to work for a short time in a similar business.)

Q.11 Elaborate on the role of entrepreneurship in the economic development at the regional level
and at the National level giving suitable examples.
Ans. What is the Role of an Entrepreneur in Economic Development?
The entrepreneur who is a business leader looks for ideas and puts them into effect in fostering
economic growth and development. Entrepreneurship is one of the most important input in the
economic development of a country. The entrepreneur acts as a trigger head to give spark to
economic activities by his entrepreneurial decisions. He plays a pivotal role not only in the
development of industrial sector of a country but also in the development of farm and service
sector. The major roles played by an entrepreneur in the economic development of an economy
is discussed in a systematic and orderly manner as follows.
(1) Promotes Capital Formation:
Entrepreneurs promote capital formation by mobilising the idle savings of public. They employ
their own as well as borrowed resources for setting up their enterprises. Such type of
entrepreneurial activities lead to value addition and creation of wealth, which is very essential for
the industrial and economic development of the country.
(2) Creates Large-Scale Employment Opportunities:
Entrepreneurs provide immediate large-scale employment to the unemployed which is a chronic
problem of underdeveloped nations. With the setting up.of more and more units by
entrepreneurs, both on small and large-scale numerous job opportunities are created for others.
As time passes, these enterprises grow, providing direct and indirect employment opportunities
to many more. In this way, entrepreneurs play an effective role in reducing the problem of
unemployment in the country which in turn clears the path towards economic development of the
nation.
(3) Promotes Balanced Regional Development:
Entrepreneurs help to remove regional disparities through setting up of industries in less
developed and backward areas. The growth of industries and business in these areas lead to a
large number of public benefits like road transport, health, education, entertainment, etc. Setting
up of more industries lead to more development of backward regions and thereby promotes
balanced regional development.

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(4) Reduces Concentration of Economic Power:
Economic power is the natural outcome of industrial and business activity. Industrial
development normally lead to concentration of economic power in the hands of a few individuals
which results in the growth of monopolies. In order to redress this problem a large number of
entrepreneurs need to be developed, which will help reduce the concentration of economic power
amongst the population.
(5) Wealth Creation and Distribution:
It stimulates equitable redistribution of wealth and income in the interest of the country to more
people and geographic areas, thus giving benefit to larger sections of the society. Entrepreneurial
activities also generate more activities and give a multiplier effect in the economy.
(6) Increasing Gross National Product and Per Capita Income:
Entrepreneurs are always on the look out for opportunities. They explore and exploit
opportunities,, encourage effective resource mobilisation of capital and skill, bring in new
products and services and develops markets for growth of the economy. In this way, they help
increasing gross national product as well as per capita income of the people in a country.
Increase in gross national product and per capita income of the people in a country, is a sign of
economic growth.
(6) Improvement in the Standard of Living:
Increase in the standard of living of the people is a characteristic feature of economic
development of the country. Entrepreneurs play a key role in increasing the standard of living of
the people by adopting latest innovations in the production of wide variety of goods and services
in large scale that too at a lower cost. This enables the people to avail better quality goods at
lower prices which results in the improvement of their standard of living.
(7) Promotes Country's Export Trade:
Entrepreneurs help in promoting a country's export-trade, which is an important ingredient of
economic development. They produce goods and services in large scale for the purpose earning
huge amount of foreign exchange from export in order to combat the import dues requirement.
Hence import substitution and export promotion ensure economic independence and
development.
(8) Induces Backward and Forward Linkages:
Entrepreneurs like to work in an environment of change and try to maximise profits by
innovation. When an enterprise is established in accordance with the changing technology, it
induces backward and forward linkages which stimulate the process of economic development in
the country.
(9) Facilitates Overall Development:Entrepreneurs act as catalytic agent for change which
results in chain reaction. Once an enterprise is established, the process of industrialisation is set
in motion. This unit will generate demand for various types of units required by it and there will
be so many other units which require the output of this unit. This leads to overall development of
an area due to increase in demand and setting up of more and more units. In this way, the
entrepreneurs multiply their entrepreneurial activities, thus creating an environment of
enthusiasm and conveying an impetus for overall development of the area.

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Entrepreneurship and the state:
It is expected that entrepreneurship will, in light of the above, contribute to growth and
employment creation in advanced, emerging and least developed economies alike. This is a
reasonable expectation –one that is supported by recent findings of historians, economists and
management scientists. ―With too many businessmen, levels of aspirations in a country may
rise - it is well-known that with increasing material wealth (or pportunities) people‘s aspirations
increase.‖
There are two major caveats however. The first is that for businessmen to play an appropriate
role, the role of the state remains important, if not more so than before. Strong states, as
regulators and gatekeepers, play a particularly vital role. In the absence of appropriate ‗rules of
the game‘, entrepreneurship may result in undesirable social outcomes, including corruption,
crime, speculation and financial crises, and may worsen the vulnerabilities of people during
natural disasters, as we have argued elsewhere.
The second is that while entrepreneurship may raise economic growth and material welfare, it
may not always result in improvements in non-material welfare (or happiness). Promotion of
happiness is increasingly seen as an essential goal. The recent Commission on the Measurement
of Economic Performance and Social Progress recommended that ―the time is ripe for our
measurement system to shift emphasis from measuring economic production to measuring
people‘s well-being‘.
Entrepreneurship and national happiness
Do businessmen contribute to national happiness? The answer is both yes and no. We found that
there exists an inverted U-shaped relationship between national happiness and entrepreneurship:
up to a certain level an increase in entrepreneurship will be associated with an increase in
national level happiness, after which it would be associated with a declining level of happiness.
Why would an increase in entrepreneurship at first lead to an increase in national happiness?
Businessmen create jobs – and we know that unemployment is a major and significant cause of
unhappiness. We also know that the goods that businessmen provide, such as health and
experiential activities, raise happiness levels. Moreover there is now a robust body of evidence
that businessmen experience higher levels of job satisfaction than non-businessman and
businessmen happiness can rub off on the happiness of non-businessmen.
But more businessmen may also be associated with lower national happiness. This could be
when most businessmen are not so by choice, but by necessity. When people turn to
entrepreneurship by necessity, they essentially lose their ‗agency‘ or free will as far as their
employment is concerned, and this is experienced as a loss of happiness. Evidence from the EU
seems to support this: there is a robust negative relationship between the business ownership rate
and businessmen‘average job satisfaction across EU nations. This graph below illustrates how
job satisfaction scores for businessmen and business ownership rates vary across the EU.
Clearly, job satisfaction amongst businessemen is much higher when fewer of them need to be
self-employed.

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