Em - Pgdm -Aima 2010

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EntrepreneurshipManagement

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Introduction: An Entrepreneur is the person who is

responsible for -- setting up a business or enterprise.

-- takes initiative-- innovative-- and looks for high achievements.

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D efinition of an Entrepreneur:The word derived from the French wordµenterprendre¶ means ³to undertake´.

According to J.A Schumpeter:Entrepreneur is an innovator who carries outnew combinations to initiate the process of economic development through introduction

of new products, new markets, take over of new source of raw materials andestablishment of a new organization of industry.

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According to Webster: ³Entrepreneur is one whoassumes the responsibility of the risk and

management of business.´

According to Peter D rucker:³Entrepreneur is one who always searches for change,

responds to it and exploits as an opportunity.Innovation is a specific tool of entrepreneurs, themeans by which they exploit change as an

opportunity for different business or service.´

According to D ewing: ³The function of entrepreneur isone that promotes ideas into business.´

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N ature and Importance of an Entrepreneur:1.Contributes for the economic development.

2.Speed up the process of activating the factorsof production.

3.Creation of employment opportunities.

4.D

evelopment of backward and Tribal areas.

5.Improvement in the standard of living of theweaker sections of the society.

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Types of Entrepreneur:1. Trading Entrepreneurs

a.Real Estate,b.Mall Trading.

2. Industrial Entrepreneurs:a. Large, b. Medium and c. Tiny Sector.

3.Corporate Entrepreneurs.

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4.Agricultural Entrepreneursa.Plantationb.Horticulturec.Poultry [Poultry feed, poultry equipment, and

poultry processing sectors]

5.Service Entrepreneursa.Engineeringb.Beauty Parlours.

6.Health Entrepreneurs.

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Classifications of Entrepreneurs1.Innovating Entrepreneurs

2.Imitative Entrepreneurs

3.Fabian Entrepreneurs [lack the will to adopt tonew methods of production]

4.D

rone Entrepreneurs [they are not ready tomake changes in their existing productionmethods. They struggle to exist, not to grow,continue to operate in a traditional way and

resist changes.

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Qualities and Characteristics of anEntrepreneur.

According to James J.Berne

1.He is an enterprising individual, energetic,hard working, resourceful, aware of newopportunities, able to adjust himself withchanging conditions with ease and willing to

assume risks involved in change.2.He is interested in advancing technology and

in improving the quality of his product or service.

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3.He is interested in expanding the scale of hisoperations by reinvesting his earnings.

4.He visualizes changes and adopt

5.He is a firm believer in planning andsystematic work.

6.He works for the society at large.

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Characteristics of an Entrepreneur.Technical competence, initiative, good

judgment, intelligence, leadership qualities,self- confidence, energy, attitude,creativeness, fairness, honesty, tactfulnessand emotional stability.

1.Mental ability

2.Clear Objectives

3.Business Secrecy

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4.Human relations ability

5.Communication ability

6.Technical knowledge

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Intrapreneurship:Intrepreneurship or intrapreneuring or corporate entrepreneurship is the process bywhich other new ventures are born with in anexisting corporation.

It involves-- expansion by exploring new opportunities

-- through new combinations of existingresources.

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Entrepreneur Intrapreneur

Independent Semi- independentperson

Raises the necessary N either raises capital nor Capital by himself and guarantees the investors.

Guarantees the return to theinvestors.

Takes full risks D oes not fully bear the

risks.Operates from outside operating with in the orgns.

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Examples for Intrapreneurship:1) 3M: Minnesota Mining and Manufacturing

a) Allows employees to devote a percentageof their time to independent projects.

2) HP: They failed to recognize the SteveWozniaks proposal for the personalcomputer. But PC is the base for the AppleComputers.

D avid Packard and Charles House[engineer invented the high quality video monitor. It wasused by N ASA also the heart transplants.

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3.IBM-- separate organizations/ board of directors/autonomous decision making authority.

-- products like Automatic Teller Machine for Banks, Industrial robots, and the IBMPersonal Computer.Intrapreneur ± Philip Estridge.

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Intrapreneurial Environment:1.Organization operates on frontiers of

technology2. N ew ideas encouraged3.Trail and error encouraged4.Failures allowed5.Resources available and accessible6.Multidiscipline teamwork approach7.Long time horizon8.Appropriate reward system9.Sponsors and support of Top management

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Entrepreneurial ProcessStage I : Change in the economic environment,

creates needs for new goods and services.

Stage II: By starting a new venture.

Stage III: Intrapreneurship

Stage IV: Co-ordinating the varied activities toachieve the entrepreneurial goal.

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I. Concept of Entrepreneurship:

Acc to McClelland;-- D oing things in a new and better way.-- entrepreneurial role calls for decision

makingunder uncertainty.

According to Casson,-- entrepreneurship consists of an eccentric(unusual) evaluation of economic eventswhich other people are unwilling to support.

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Acc to Keynes:--ability to mobilize the resources andcombine them to initiate change inproduction.

Aditya Mittal:-- Entrepreneurship is a state of mind and canbe applied to any number of different fields.

-- it is critical as it helps to prevent stagnationby challenging traditional thinking and drivesprogress and development that can bringabout long term change.

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-- everyone has the potential to beentrepreneurial in their thinking and approach.

Finally, An entrepreneur may at best be defined as a

person responsible for existence of newbusiness enterprises.

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II. Phases of Entrepreneurship D evelopmentThree Phases:

1. Initial Phase

2. D evelopment Phase

3.Support Phase

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1.Initial Phase:Creation of awareness about theentrepreneurial opportunities based onsurvey.

2. D evelopment Phase: [E D P]Implementation of training programmes todevelop motivation and managerial skill.

3.Support Phase: Infrastructure support of counselling and assisting to establish a new

enterprise and to develop existing units.

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Institutional Support to Training andInstitutional Support to Training andEntrepreneurship Development:Entrepreneurship Development:

N ational Level: [Promotion of MSMEs]1. N ISIET ± N ational Institute Small Industry

Extension Training, Hyderabad.

2. IIE ± The Indian Institute of Entrepreneurship

Guwahati.

3. N IESBU D ± N ational InstituteEntrepreneurship and Small BusinessD

evelopment

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To promote entrepreneurship development inIndia, the Ministry has two schemes:

Promotion of;1.Entrepreneurship D evelopment Institutions[

ED I]

2. N ational Entrepreneurship D evelopmentBoard

[N ED B]

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Objectives of these Programmes:

1.Promoting entrepreneurship for creatingself- employment through enterprisecreating.

2.Facilitating creation of training infrastructure

3.Supporting research of entrepreneurshiprelated issues.

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III. Factors Influencing Entrepreneurship.1.Technical knowledge

2.Entrepreneurial Training

3.Market contacts

4.Family business

5.Availability of capital

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6.Successful role models

7.Local manpower

8.Capable advisors& supporters

9.Supplier assistance

10.Governmental & Institutional support.

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Em - Pgdm -Aima 2010