Chapter – 5

ENTREPRENEUR

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 CONTENTS
 Meaning of Entrepreneurship
 Entrepreneurship Core Competencies
 Evolution of Concept
 Functions of Entrepreneur
 Types of Entrepreneurship
 Intrapreneur – an emerging Class
 Concept of Entrepreneurship

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 CONTENTS
• Development of Entrepreneurship
• Steps in Entrepreneurial Process
• Role of Entrepreneurship in Economic
Development
• Economic development
• Entrepreneurship – is Barriers
• Entrepreneurship in India

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 Meaning of Entrepreneur
 An entrepreneur is a person who has possession
over a new company, or enterprise, and assumes
significant accountability for the inherent risks and
the outcome.

 The term is a loanword from French and was first

defined by the Irish economist Richard Cantillon.

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Meaning of Entrepreneur contd…

 A female entrepreneur is sometimes known as an

entrepreneuse. However, with the word
"entrepreneuse" being the French feminine form of
entrepreneur, its usage in English in delineating
sexes detracts from the meaning of the word
"entrepreneur".
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Meaning of Entrepreneur contd…

 Entrepreneur in English is a term applied to the

type of personality who is willing to take upon

herself or himself a new venture or enterprise and

accepts full responsibility for the outcome.

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 Entrepreneurship Core
Competencies
Sl. Core Entrepreneurial Activities
No. Competencies
1. Initiative Does things before asked for or forced by events, and
acts to extend the business to new areas, products, or
services.
2. Perceiving Identifies business opportunities and mobilises necessary
Opportunities resources to make good an opportunity.
3. Persistence Takes repeated or different actions to overcome
obstacles.
4. Information Consults experts for business and technical advice.
Gathering Seeks information on client’s or supplier’s needs.
Personality undertakes market research and makes use of
personal contacts or information network to obtain
useful information
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 Entrepreneurship Core
Competencies
Sl. Core Entrepreneurial Activities
No. Competencies
5. Concern for States desire to produce or sell a better quality product or
quality work service. His performance compares favourably with that
of others.
6. Commitment to Makes a personal sacrifice or expends extraordinary
contractual effort to complete a job. Accepts full responsibility in
obligations completing a job contract on schedule. Pitches in with
workers, or works in their place, to get job done. Shows
utmost concern to satisfy customer.
7. Efficiency Finds ways and means to do things faster, better, and
orientation economically.
8. Planning Various inter-related jobs are synchronised according to
plan.
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 Entrepreneurship Core
Competencies
Sl. Core Entrepreneurial Activities
No. Competencies
9. Problem Solving Conceives new ideas and finds innovative solutions.
10. Self confidence Makes decisions on his own and sticks to them in spite
of initial setbacks.
11. Expertise Possesses technical expertise in area of business,
finance, marketing, and so on.
12. Self-critical Aware of personal limitations but tries to improve upon
them by learning from his past mistakes, or experience
of others and is never complacent with success.
13. Persuasion Persuades customers and financiers to patronize his
business.

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 Entrepreneurship Core
Competencies
Sl. Core Entrepreneurial Activities
No. Competencies
14. Use of influence Develops business contracts. Retains influential people
strategies as agents. Restricts dissemination of information in his
possession.
15. Assertiveness Instructs, reprimands, or disciplines for failing to
perform.
16. Monitoring Develops a reporting system to ensure that work is
completed and that it meets quality norms.
17. Credibility Demonstrated honesty in dealing with employees,
suppliers, and customers even if it means a loss of
business.
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 Entrepreneurship Core
Competencies
Sl. Core Entrepreneurial Activities
No. Competencies
18. Concern for Expresses concern for employees by responding
employee welfare promptly to their grievances.
19. Impersonal Places long-term good will above short-term gain in a
relationship business relationship
20. Expansion of Reinvests a greater portion of profits to expand capital
capital base base of the firm.
21. Building product Concerned about the image of his product among
image customers. Does everything possible to establish a
niche for his product in the market.

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Evolution of the Concept
 The concept of entrepreneurship has been around
for a very long time, but its resurgent popularity
implies a ”sudden discovery”, as if we had
stumbled onto a new direction for American
enterprise. 

 This is a myth, as we shall see, because the

American system of free enterprise has always
engendered the spirit of entrepreneurship.
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Evolution of the Concept contd..
 America was discovered by entrepreneurs, and the
United States became a world economic power
through entrepreneurial activity. 

 More important, our future rests squarely on

entrepreneurial ventures founded by creative
individuals. 
 
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Evolution of the Concept contd..

 They are inspired people, often adventurers, who

can at once disrupt a society and instigate
progress. 

 They are risk takers who seize opportunities to

harness and use resources in unusual ways, and
entrepreneurs will thrust us into the twenty-first
century  with a thunderous roar.
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Functions of Entrepreneur

• Innovation

• Risk and uncertainty bearing

• Organization building

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Functions of Entrepreneur contd…
According to Kilby in a developing country even the
imitator entrepreneurs are very important and the
entrepreneurial role encompasses the following:
• Perception of market opportunities
• Gaining command over scarce resources
• Purchasing inputs
• Marketing the products
• Dealing with bureaucrats
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Functions of Entrepreneur contd…
• Managing human relations within the firm
• Managing customer and supplier relation
• Managing finance
• Managing production
• Acquiring and overseeing assembly of the factory
• Industrial engineering
• Upgrading process and product
• Introducing new production techniques and
products
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Types of Entrepreneur

 The Achiever

 The Salesperson

 The Manager

 The Inventor

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The Achiever
 Achievers are willing to work long and hard to
reach their personal goals.

 They like to plan and are committed to making

things happen.

 They are good at dealing with crises and trying

to be good at everything.
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The Achiever contd…
 They should focus on running small
organizations and be careful not to expect
themselves to know everything.

 Large organizations or those that are controlled

by outsiders may be too structured for the
achiever.
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The Salesperson
 Salespeople care about people and want to help
them.

 They use a soft-sell approach, and their

customers buy from them as a way to show
gratitude for the help offered by the salesperson.

 They should focus on selling and have someone

else manage the business.

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 The
 Managers are competitive, decisive, and feel
Manager
comfortable being in charge.

 They may be good at sales because they use

logic and persuasion.

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The Manager contd…

 They are good at managing major growth in a

new organization or an existing operation
needing their talents.

 They may tend to over-manage a small operation

and need to be careful that they really have the
knowledge and skills they need.
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The Inventor

 Inventors are drawn to new ideas and finding

ways to get ahead of the competition.

 They may be idealistic and get carried away with

their enthusiasm. They are good at envisioning

solutions to challenges for an organization.

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The Inventor contd…

 They need to stay away from areas in which they

are not experts and remember that some of their

ideas may not be the best. Some people possess

more than one type of entrepreneurship.

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Intrapreneur – an Emerging Class

 Corporate entrepreneurship, whereby an

organization seeks to expand by exploring new
opportunities through new combinations of its
existing resources
 Intrapreneurship, an obvious play on
“entrepreneurship,” is the practice of beginning
and developing new business ventures within the
structure of an existing organization.
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Concept of Entrepreneurship
 Entrepreneurship is a process undertaken by an
entrepreneur to augment his business interests.

 It is an exercise involving innovation and creativity

that leads towards establishing his/her enterprise.

 One of the qualities of entrepreneurship is the

ability to discover an investment opportunity and to
organize an enterprise, thereby contributing to real
economic growth.
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 Concept of Entrepreneurship
contd…

 It involves taking of risks and making the

necessary investments under conditions of

uncertainty and innovating, planning, and taking

decisions so as to increase production in

agriculture, business, industry etc.

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 Concept of Entrepreneurship
contd…
 Entrepreneurship is a composite skill, the
resultant of a mix of many qualities and traits -
these. include tangible factors as imagination,
readiness to take risks, ability to bring together
and put to use other factors of production capital,
labour, land, as also intangible factors such as
the ability to mobilize scientific and technological
advances.
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Development of Entrepreneurship
 Develop a business description
 Describe business facility and location
 Develop an organizational chart
 Develop funding/financial resources
 Generate a budget

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 Development of
Entrepreneurship contd…
 Create forms/records
 Design a personnel management plan
 Apply laws, regulations and codes
 Select supply and equipment needs
 Formulate an advertising and customer
recruitment plan
 Develop a list of resources
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 Steps in Entrepreneurial
Process

The Entrepreneurial Process :The process of

starting a new venture is embodied in the

entrepreneurial process, which involves more than

just problem solving in a typical management

position.

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 Steps in Entrepreneurial
Process contd…
An entrepreneur must find, evaluate, and develop an
opportunity by overcoming the forces that resist the
creation of something new. The process has four
distinct phases:
(1) Identification and evaluation of the opportunity,
(2) Development of the business plan,
(3) Determination of the required resources,
(4) Management of the resulting enterprise.
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Steps in Entrepreneurial Process

Identification and
Development of
evaluation of the
the business plan
opportunity

Determination of Management of
the required the resulting
resources enterprise

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 Identify and Evaluate the
Opportunity
 Opportunity identification and evaluation is a very
difficult task.

 Most good business opportunities do not suddenly

appear, but rather result from an entrepreneur’s
alertness to possibilities, or in some case, the
establishment of mechanisms that identify potential
opportunities.
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contd…
The assessment of the opportunity requires
answering the following questions:

• What market need does it fill?

• What personal observations have you
experienced or recorded with regard to
that market need?
• What social condition underlies this market
need?
• What market research data can be marshaled
to describe this market need?
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contd…
 What patents might be available to fulfill this
need?
 What competition exists in this market? How
would you describe the behavior of this
competition?
 What does the international market look like?
 What does the international competition look like?
 Where is the money to be made in this activity?

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 Developing a Business Plan

 A good business plan must be developed in order

to exploit the defined opportunity.

 This is a very time-consuming phase of the

entrepreneurial process. An entrepreneur usually
has not prepared a business plan before and does
not have the resources available to do a good job.

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 Developing a Business Plan
contd…

 A good business plan is essential to developing

the opportunity and determining the resources

required, obtaining those resources, and

successfully managing the resulting venture.

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 Determine the
Resources Required
 The resources needed for addressing the
opportunity must also be determined. This
process starts with an appraisal of the
entrepreneur’s present resources.

 Any resources that are critical need to be

differentiated from those that are just helpful.
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 Determine the Resources
Required contd…
 Care must be taken not to underestimate the
amount of variety of resources needed. The
downside risks associated with insufficient or
inappropriate resources should also be assessed.
 Acquiring the needed resources in a timely manner
while giving up as little control as possible is the
next step in the entrepreneurial process
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 Determine the Resources
Required contd…

 An entrepreneur should strive to maintain as

large an ownership position as possible,
particularly in the start-up stage.
 Alternative suppliers of these resources, along
with their needs and desires, need to be
identified.
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 Manage the Enterprise
 After resources are acquired, the entrepreneur
must use them to implement the business plan.

 The operational problems of the growing

enterprise must also be examined.

 This involves implementing a management style

and structure, as well as determining the key
variables for success.
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Manage the Enterprise contd…

 A control system must be established, so that

any problem areas can be quickly identified and
resolved.

 Some entrepreneurs have difficulty managing

and growing the venture they created.

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 Role of Entrepreneurship
in Economic Development
The entrepreneur who implements ‘new
combinations of means of production' plays a crucial
role in disturbing the status quo through innovation –
or ‘creative destruction’ – and there by becomes an
agent of change.

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Contd…
As such, the ‘dynamic equilibrium’ achieved by a
constantly innovating entrepreneur could generate
conditions for:

1. Increase opportunities for employment

(comprising various competitive skill sets);
2. Additional wealth creation;
3. Introduction and dissemination of new methods
and technology; and
4. Overall economic growth.
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 Entrepreneurship Barriers

• Difficulties of access to new technologies or the

inability to adapt to local conditions
• Inability to access private and public
• procurement opportunities
• Non-availability of affordable technical and
managerial consultancy

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 Entrepreneurship Barriers
contd…

• Educational levels including computer competency

• Inability to conduct Market research

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 Environmental Helps Barriers

1. Market Contacts A. Lack of Viable Concept

2. Local Incubator Companies B. Lack of Market Familiarity

3. Capable Local Manpower C. Lack of Technical Skills

4. Technical Education & D. Lack of Seed Capital

Support
E. Lack of Business Knowhow

Personal 5. Supplier Assistance F. Complacency, Nomotivation

Personal
Pushes Pushes Venture
& Credit G. Social Stigma

6. Local Venture Capitalists H. Job “Lock-ins”, “Golden

Handcuffs”
7. Venture – Savvy Bankers

I. Time Pressures, Distractions

8. Capable Local Advisors
J. Legal Constraints, Regulation,
9. Entrepreneurial Education
Red Tape
10.Successful Role Models
K. Protectionism, Monompoly

L. Patent Inhibitions

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Entrepreneurship in India

Entrepreneurship has been ‘embedded in Indian

genius and is part of its tradition. To quote the
renowned economist, T.N.Srinivasan, ‘Indian has
been entrepreneurial society… we had the
entrepreneurial skill but suppressed it for too long
time…and now it is thriving.

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 Entrepreneurship in India
contd…

Entrepreneurship in India occurs in ‘far more

encompassing and far reaching ways than in

developed countries. And could therefore be far more

complex, ‘for there is so much more that needs to be

done’.

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 contd…
Is India a right place to start a startup? Following are
few interesting observations:
1. People: India is a land of technologists. It is the
best place for techies with similar interests to
combine their skills and innovate than in any
other countries.
2. Funding: Indian startups can survive for much
longer time than in any other countries looking
at the limited amount of cash requirement for
running business here.
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 contd…
It is required to create right environment to create
successful business builders in India. To do this India
should be focusing on following areas:

1. Create the right environment for success

2. Ensure that entrepreneurs have access to the
right skills
3. Ensure that entrepreneurs have access to
“smart” capital:
4. Enable networking and exchange:
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CASE STUDY 1
This case is about James Dyson (Dyson), a UK-
based engineer and founder of Dyson Appliances
Ltd (DAL), best known as the inventor of the bag
less vacuum cleaner. With sales of over £514.7
million and a presence in 45 countries worldwide as
of 2007, DAL had emerged as the market leader in
the vacuum cleaner market in UK as well as the
USA.
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 contd…
Analysts noted that Dyson's journey from launching
the award-winning Ballbarrow (a gardening tool) in
the 1970s to building one of the most successful
multinational brands (i.e. the vacuum cleaners that
are called Dysons) in the 2000s had been anything
but easy.
There were plenty of challenging moments that
punctuated his career, be it in the initial struggles to
get funding for his venture or the patent litigation
involving a major rival, which came much later.
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contd…
Despite all the problems, Dyson managed to build
DAL into a market leader in a highly competitive
industry dominated by multinational companies.

While analysts hailed him as a great entrepreneur

and praised his business acumen and approach
towards innovation, Dyson also earned many laurels
including receiving the knighthood for his services to
the business world on December 2006.

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contd…

Experts felt that Dyson was not only a great

inventor but had also shown sound business
acumen which helped him build DAL from the
ground up to a global company. However, he was
also criticized for shifting the company's production
base to Malaysia in 2002. Union leaders alleged
that this move had affected around 800 workers in
the already waning manufacturing industry in the
UK.
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contd…
Issues:
• Understand the personality traits of an
entrepreneur from the life and work of James
Dyson.
• Identify the benefits and challenges faced by an
entrepreneurial venture with regard to managing
its business growth and sustaining its
innovation.
• Understand the leadership and management
style of James Dyson and his contribution to the
success of Dyson Appliances Ltd.
• Appreciate the sources of inspiration for an
entrepreneur in the consumer appliances
industry. Management and Entrepreneurship,
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CASE STUDY 2
SAM WALTON 1918-1992

Sam Walton, the founder of Wal-Mart, grew up poor

in a farm community in rural Missouri during the Great
Depression. The poverty he experienced while
growing up taught him the value of money and to
persevere. 

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CASE STUDY 2 contd…

After attending the University of Missouri, he

immediately worked for J.C. Penny where he got his
first taste of retailing. He served in World War II,
after which he became a successful franchiser of
Ben Franklin five-and-dime stores. In 1962, he had
the idea of opening bigger stores, sticking to rural
areas, keeping costs low and discounting heavily.
The management disagreed with his vision.
Undaunted, Walton pursued his vision, founded Wal-
Mart and started a retailing success story. When
Walton died in 1992, the family's net worth
approached $25 billion.
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 contd…
Today, Wal-Mart is the world's #1 retailer, with
more than 4,150 stores, including discount stores,
combination discount and grocery stores, and
membership-only warehouse stores (Sam's Club).
Learn Walton's winning formula for business.
Rule 1: Commit to your business
Rule 2: Share your profits with all your associates,
and treat them as partners
Rule 3: Motivate your partners

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contd…
Rule 4: Communicate everything you possibly can
to your partners
Rule 5: Appreciate everything your associates do
for the business
Rule 6: Celebrate your success
Rule 7: Listen to everyone in your company and
figure out ways to get them talking
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contd…
Rule 8: Exceed your customer's expectations
Rule 9: Control your expenses better than your
competition
Rule 10: Swim upstream

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 References
• Principles of Management-P C Tripathi, P N
Reddy; TMH
• Management-Stephen Robbins; PHI
• Management - VSP Rao, V H Krishna; Excel
• Essentials of Management-Koontz, Weihrich,
TMH
• Entrepreneurship and Economic Development,
Kilby, Peter (1971),
ManagementNew
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York Press.
and Entrepreneurship, 64
 References
• Innovation and Entrepreneurship, Drucker, Peter
F (1985) New York.
• The Achieving Society, McClelland. D.C. (1961),
New York Free Press.

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