Course Title: Entrepreneurship

Development

Course Code:
20MBAC705
Entrepreneurship Development
Entrepreneurship Development
Entrepreneurship Development
_ Inspirational Video _ Entrepreneur Mo
Course Outcomes (COs):
At the end of the course the student should be able to:

Explain the characteristics and role of the

entrepreneur in economic growth
Discuss the significance of entrepreneurship as a
career opportunity in present day and age
Analyze varies entrepreneurship theories from for the
profit and social perspective
Discuss varies steps involved in venture creation
process
Explain the Emerging trends in the entrepreneurship

Discuss the Contemporary issues in entrepreneurship

 Content Sessions
Module Wise
Module No. 1. 7
Concept and Need of Entrepreneurship
Development, Definition of Entrepreneur,
Entrepreneurship, Innovation, Invention,
Creativity, Business Idea, Opportunities through
change. Concept of entrepreneur, manager and
intrapreneur., Entrepreneurial traits, types and
significance in today’s context; definitions,
characteristics of entrepreneurial types, qualities
and functions of entrepreneurs, role, functions
and importance of entrepreneurs in economic
growth, Entrepreneurship as a career
Module No. 2. 6
Evolution and Theories of Entrepreneurship:
Innovation Theory by Schumpeter & Imitating,
Theory of High Achievement by McClelland, X-
Efficiency Theory by Leibenstein, Theory of
Profit by Knight, Theory of Social change by
Everett Hagen, Effectuation theory of
entrepreneurship, A positive theory of social
entrepreneurship.
Module No. 3. 8
Venture Process: Opportunity sensing and idea
generation, Environmental assessment, marketing
plan, organizational plan and financial plan,
Sources of finance and financial planning, business
plan, entrepreneurial growth strategies,
franchising, stalling, sickness and revival and
exiting the venture
Module No. 4. 7
Emerging trends in the entrepreneurship: Rural
entrepreneurship, Social entrepreneurship, family
business and entrepreneurship, and technology
driven entrepreneurship. Entrepreneurship
development: government and supporting agencies.
Ethical and Environmental challenges

Module No. 5. 3
Contemporary issues and practices
References Books

 Hisrich, Robert D; Peters, Michael P and Shepherd, Dean A,

Entrepreneurship, Tata McGraw Hill Publishing Company
Limited
 Bagchi, Subroto, The-High Performance Entrepreneurs Penguin
Books International Private Limited, New Delhi
 Kuratko F Donald & Hodgetts M Richard, Entrepreneurship a
Contemporary Approach, The Dryden Press.
 Robert A Baron and Scott A Shane, Entrepreneurship A Process
Perspective, Thomson South Western.
 David H. Holt, Entrepreneurship: New Venture Creation,
Prentice Hall of India 2002
  Raj Shankar, Entrepreneurship Theory & Practice,
Vijay Nicole Imprints Pvt Ltd
 Evaluation Scheme
ISA Scheme

Assessment Weightage in
Marks
Minor Examination 1 12
Minor Examination 2 13
Assignments 15
Class Participation and presentation 10

Total 50
 Introduction to concept and
need for entrepreneurship
First Person to Use the Term
Entrepreneur

Richard Cantillon
Need for Entrepreneurship
Characteristics of the Entrepreneurs
Openness to
Experience Self - motivated

Dreamer and Visionary

Creativity &
Innovation

Risk Taking

Entrepreneurship Development
Definition of Entrepreneur, Entrepreneurship, Innovation,
Invention and Creativity

Entrepreneurship Development
Entrepreneurship Development
 Opportunities through change
Industrial Changes
ow fic
ge
Kn ienti
led
Sc

Demographic and Socio-

Cultural Change
Process Innovations

Market Changes

Entrepreneurship Development
Concept of Entrepreneur, manager and
intrapreneur

Intrapreneur

Entrepreneurship Development
 Types of the Entrepreneurs
• On the Basis of Economic Development

• On the basis of Type of the business

• On the basis of motivation

• According to Entrepreneurial Activity

Entrepreneurship Development
On the Basis of Economic Development

Fabian

Imitative

Entrepreneurship Development
On the basis of Type of the business

Trading

Business

Industrial Agricultural

Entrepreneurship Development
On the basis of motivation

Pure Entrepreneur

Entrepreneurs
Entrepreneurship Development Induced
On the basis of Entrepreneurial Activity

Entrepreneur
Novice Colonel Sanders 

Entrepreneurship Development
 Role of the Entrepreneur

Economical Development Nation

Development

Social Technological
Development Development
Functions of the
Entrepreneurs
 Module No - II
• Theories of Entrepreneurship:

Innovation Theory by Schumpeter

& Imitating, Theory of High
Achievement by McClelland, X-
Efficiency Theory by Leibenstein,
Theory of Profit by Knight, Theory
of Social change by Everett Hagen,
Effectuation theory of
entrepreneurship, A positive theory
of social entrepreneurship
 Topic Learning Outcomes COs BL CA
Cod
e
Analyze various theories of CO3 L3 1.1
the entrepreneurship
development
Classify them according the CO3 L2 3.1
focus areas
 Innovation Theory by
Schumpeter
• Schumpeter’s Theory posits that innovation in
business is the major reason for increased
investments.

• According to him Innovation means, the

change in the methods of production and
transportation of new product ,change in the
industrial organization, opening of new
market , etc.
Joseph A.
Schumpeter, • – In other words, innovation theory of profit
1883-1950. posits that the main function of an
entrepreneur is to introduce innovations and
the profit in the form of reward is given for
his performance.
• He classify the innovation into two
categories;
• 1) Reduce cost of the production

• 2)
 Criticism of Innovation
Theory
• It ignores the element of
uncertainty
• The theory undermine other
components contribution to
the profit.
• It undermine the risk appetite
of the entrepreneurs
 Theory of High
Achievement- McClelland
According to McClelland
“ A set of personality characteristics
which are indicative of high need
achievement is determined of
entrepreneurship development.” Need
Achievement is a social motive to
excel, that tends to characterize
successful entrepreneurs.”
X-Efficiency Theory

• Harvey Leibensten was the

proponent of this theory
• In economics X-efficiency is
the effectiveness with which a
given set of input are used to
produce output
• X-efficiency is degree of
inefficiency in the use of
resources within the firm: it
measures the extent to which
the firm fails to realize its
productive potential
• According to Leibenstein, When an
I/P is not used effectively the
difference b/w the actual o/p and
desired o/p attributable to degree of
X-efficiency
• Leibenstein identifies two main role
of entrepreneurs :
 Gap fillers – If not all factors of
the production are marketed / if
there are imperfections in markets
the entrepreneurs is expected to fill
the gaps to push enterprise in motion
 An I/P completer - which involves
making /working out ways to
improve the efficiency prevailing
I/P’s
Theory of Profit

• This theory is propounded by F.

Knight
• According to this theory profit is
reward for bearing uncertainty
• Uncertainty is due to
unforeseeable / non-insurable
risk which a entrepreneur
undertakes
Theory of Social Change

• Evertt Hagen is the proponent

of this theory
• This theory is also known as
status withdrawal theory
• They try to explain that when
members of some social
groups feels that their value
and status are not represented
in the Society they turn to
innovation to get the respect
of the society
• According Hagen
entrepreneurship is the
function of status
withdrawal.
• This theory provides that a
class which lost its previous
prestige / a minority group,
tends to show aggressive
entrepreneurial drive
• Hagen described entrepreneur
as creative problem solver
interested in practical /
technological components
• He is of the opinion that in
traditional social system
societies allocate authorities to
individual based on the status
rather than on the ability
 Effectuation theory of the
entrepreneurship
• Dr. Saras Sarasvathy Proposed the theory
of effectuation in the early 2000
• Effectuation logic contrasts with
“ Causation theories” of entrepreneurship,
• In Causation theory entrepreneur starts
with a goal in mind and then work on
acquisition of the resources to achieve the
goal in a liner fashion
• But in effectuation theory, entrepreneur
analyze and evaluate the resource that are
available to use then he/she derives a goal
• Author suggest that effectuation
involves 5 core principles
 A positive theory of
social entrepreneurship
• Santos (2010) Proposes a
positive theory of Social
entrepreneurship.
• He try to bring a simplistic and
more clear meaning to the term
social entrepreneurship.
• He try to differentiate between
the economic and social value
that is closely associated with
social entrepreneurship.
• It was commonly argued that
social entrepreneurs possess a
social mission as a central focus as
opposed to profit seeking
motivation and they predominantly
focus on social value creation.
• The author argues for the rejection
of dichotomy between the social
and economic values. He proposes
theory development to focus on
the generic term “value”
• According to him “ Value” means
increase in the utility of society’s
members
• According to him the distinction
between entrepreneurship and
social entrepreneurship is value
creation and value appropriation .
• Value creation from an activity
happens, when the utility of
society’s members increases after
accounting for the resources used
in that activity
• Value appropriation from an
activity happens when the focal
actor is able to capture a portion
of the value created by the activity
(Mizik & Jacobson, 2003).