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Management and Entrepreneurship 10AL51

UNIT- 5 ENTREPRENEUR

Meaning of Entrepreneur
1. 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.
2. The term is a loanword from French and was first defined by the Irish economist
Richard Cantillon.
3. 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".
4. 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.

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.
• 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.
• 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
1. Innovation
2. Risk and uncertainty bearing
3. Organization building
4. According to Kilby in a developing country even the imitator entrepreneurs are very
important and the entrepreneurial role encompasses the following:
5. Perception of market opportunities
6. Gaining command over scarce resources
7. Purchasing inputs
8. Marketing the products Managing human relations within the firm
9. Managing customer and supplier relation
10. Managing finance
11. Managing production
12. Acquiring and overseeing assembly of the factory
13. Industrial engineering
14. Upgrading process and product
15. Introducing new production techniques and products
16. Dealing with bureaucrats

Types of Entrepreneur
1. The Achiever
2. The Salesperson
3. The Manager
4. The Inventor

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.
• They should focus on running small organizations and be careful not to expect
themselves to know everything.

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• Large organizations or those that are controlled by outsiders may be too structured
for the achiever.
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.
The Manager
• Managers are competitive, decisive, and feel comfortable being in charge.
• They may be good at sales because they use logic and persuasion.
• 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.

Intrapreneur – an Emerging Class

1. Corporate entrepreneurship, whereby an organization seeks to expand by exploring new
opportunities through new combinations of its existing resources
2. Intrapreneurship, an obvious play on “entrepreneurship,” is the practice of beginning
and developing new business ventures within the structure of an existing organization.
3. Entrepreneurship is a process undertaken by an entrepreneur to augment his business
interests.
4. It is an exercise involving innovation and creativity that leads towards establishing
his/her enterprise.
5. 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.
6. 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.
7. 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

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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.

Development of Entrepreneurship
1. Develop a business description
2. Describe business facility and location
3. Develop an organizational chart
4. Develop funding/financial resources
5. Generate a budget Create forms/records
6. Design a personnel management plan
7. Apply laws, regulations and codes
8. Select supply and equipment needs
9. Formulate an advertising and customer recruitment plan
10. Develop a list of resources

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.
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:
Identification and evaluation of the opportunity,
• Development of the business plan,
• Determination of the required resources,
• Management of the resulting enterprise.

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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As such, the ‘dynamic equilibrium’ achieved by a constantly innovating entrepreneur could

generate conditions for:
o Increase opportunities for employment (comprising various competitive skill sets);
o Additional wealth creation;
o Introduction and dissemination of new methods and technology; and
o Overall economic growth.

Entrepreneurship Barriers
• Difficulties of access to new technologies or the inability to adapt to local conditions
Educational levels including computer competency
• Inability to conduct Market research
• Inability to access private and public
• procurement opportunities
• Non-availability of affordable technical and managerial consultancy

Entrepreneurship in India
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’.
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.
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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