Assignment

Entrepreneurship

By: - DEEPAK VISHWAKERMA

BBA 6TH SEM.

Q.1- What are the differences between manager and entrepreneur?

Ans. The terms Entrepreneur and Manager are considered one and the same.
But the two terms have different meanings.
The following are some of the differences between a manager and an
entrepreneur.

· The main reason for an entrepreneur to start a business enterprise is

because he comprehends the venture for his individual satisfaction and has
personal stake in it where as a manager provides his services in an enterprise
established by someone.

· An entrepreneur and a manager differ in their standing, an entrepreneur is

the owner of the organization and he bears all the risk and uncertainties
involved in running an organization where as a manager is an employee and
does not accept any risk.

· An entrepreneur and a manager differ in their objectives. Entrepreneur’s

objective is to innovate and create and he acts as a change agent where as a
manager’s objective is to supervise and create routines. He implements the
entrepreneur’s plans and ideas.

· An entrepreneur is faced with more income uncertainties as his income is

contingent on the performance of the firm where as a manager’s
compensation is less dependent on the performance of the organization.

· An entrepreneur is not induced to involve in fraudulent behavior where as a

manger does. A manager may cheat by not working hard because his income
is not tied up to the performance of the organization.

· Entrepreneur is required to have certain qualifications and qualities like

high accomplishment motive, innovative thinking, forethought, risk-bearing
ability etc. Conversely it’s mandatory for a manager to be educated in the
fields of management theories and practices.

· An entrepreneur deals with faults and failures as a part of learning

experience where as a manager make every effort to avoid mistakes and he
postpones failure.
“An entrepreneur could be a manager but a manager cannot be an
entrepreneur”. An entrepreneur is intensely dedicated to develop business
through constant innovation. He may employ a manager in order to perform
some of his functions such as setting objectives, policies, rules etc. A
manager cannot replace an entrepreneur in spite of performing the allotted
duties because a manager has to work as per the guidelines laid down by the
entrepreneur.

On the downside, typical manager brings professionalism into working of an

organization. They bring fresh perspectives, ideas and approach to trouble
shooting which can be invaluable.

Lately there has been convergence of the entrepreneur and the manager in
certain sectors like software. An employee is being given highly valuable
stock options, which make a typical ‘manager’ a part owner.

Q.2- Explain functions of entrepreneurs in executing while embarking

his/her journey.

Ans. Entrepreneur: It can be defined as-

(i) Entrepreneurship is viewed as a function involving identification and use

of opportunities which exist in the market.

(ii) Entrepreneurs bear risks in converting the ideas into action and pursuing
opportunities.

(iii) Entrepreneurship involves creative and innovative action.

(iv) Entrepreneurs undertake managerial activities as part of their work.

(v) An entrepreneur constantly strives for excellence in his/her field of work.

Qualities of a Successful Entrepreneur

Let us now think about the qualities of a successful entrepreneur. There may
be many qualities needed to successfully run an enterprise. However, the
following qualities are considered important.
(i) Initiative
In the world of business, opportunities come and go. An entrepreneur has to
be a man of action. He should be able to initiate action and take advantage of
opportunity. Once you miss the opportunity it will not come again.
Therefore, initiative on the part of entrepreneur is a must.

(ii) Willingness to assume risk

In any business there is an element of risk. It implies that a businessman

may be successful or unsuccessful. In other words it is not necessary that
every business shall earn profit. This deters individuals to take up business.
However, an entrepreneur always volunteers to take risks to run a business
and be successful.

(iii) Ability to learn from experience

An entrepreneur may commit mistakes. However, once an error is

committed, it should not be repeated as that will lead to heavy losses. So,
one should learn from his mistakes. An entrepreneur, therefore, should have
the ability to learn from experience.

(iv) Motivation

Motivation is key to success. This is necessary for success in every walk of

life. Once you get motivated to do something you will not rest unless you
complete it. For example, sometimes you become so much interested is
reading a story or a novel that you do not sleep unless you complete it. This
kind of interest in the work comes through motivation. This is an essential
quality of a successful entrepreneur.

(v) Self-confidence

For achieving success in life, one should have confidence in himself or

herself. A person who lacks confidence can neither do any work himself nor
can inspire others to work. Self-confidence is reflected in courage,
enthusiasm and the ability to lead. A successful entrepreneur must have self-
confidence.
(vi) Orientation towards hard work

There is no substitute for hard work in life. While running a business,

everyday, one problem or the other may arise. The businessman has to be
vigilant about it and solve it as early as possible. This requires hard work on
the part of entrepreneur. He cannot afford to say that now office time is over
and I will not work. In some situations he may even have to work for the
whole night. Thus, orientation towards hard work is the secret of success of
an entrepreneur.

(vi) Decision making ability

In running an enterprise, the entrepreneur has to take a number of decisions.
He should therefore be capable of taking suitable and timely decision. In
other words he must take right decision at the right time. In the present
world things move very fast. If an entrepreneur does not have the ability to
take timely decision, he might miss opportunity and incur loss.

Functions an entrepreneur:

i) Identifying entrepreneurial opportunity – There are many

opportunities in the world of business. These are based on
human needs like food, fashion, education, etc., which are
constantly changing. These opportunities are not realized by
common man, but an entrepreneur senses the opportunities
faster than others do. An entrepreneur therefore, has to keep his
eyes and ears open and require imagination, creativity and
innovativeness.

ii) Turning ideas into action – An entrepreneur should be capable of

turning his ideas into reality. He collects information regarding the ideas,
products, practices to suit the demand in the market. Further steps are taken
to achieve the goals in the light of the information collected.

iii) Feasibility study – The entrepreneur conducts studies to assess the

market feasibility of the proposed product or services. He anticipates
problems and assesses quantity, quality, cost and sources of inputs required
to run the enterprise. Such a blue print of all the activities is termed as a
‘business plan’ or a ‘project report’.

iv) Resourcing – The entrepreneur needs various resources in terms of

money, machine, material, and men to running the enterprise successfully.
An essential function of an entrepreneur is to ensure the availability of all
these resources.

v) Setting up of the Enterprise – For setting up an enterprise the

entrepreneur may need to fulfill some legal formalities. He also tries to find
out a suitable location, design the premises, install machinery and do many
other things.

vi) Managing the enterprise – One of the important function of an

entrepreneur is to run the enterprise. He has to manage men, material,
finance and organize production of goods and services. He has to market
each product and service, after ensuring appropriate returns (profits) of the
investment. Only a properly managed organization yields desired results.

vii) Growth and Development – Once the enterprise achieves its desired
results, the entrepreneur has to explore another higher goal for its proper
growth and development. The entrepreneur is not satisfied only with
achieving a set goal but constantly strives for achieving excellence.

Q.3- How will you classify entrepreneurship?

Ans. Entrepreneurship is the act of being an entrepreneur, which can be
defined as "one who undertakes innovations, finance and business acumen in
an effort to transform innovations into economic goods". This may result in
new organizations or may be part of revitalizing mature organizations in
response to a perceived opportunity. The most obvious form of
entrepreneurship is that of starting new businesses (referred as Startup
Company); however, in recent years, the term has been extended to include
social and political forms of entrepreneurial activity. When entrepreneurship
is describing activities within a firm or large organization it is referred to as
intra-preneurship and may include corporate venturing, when large entities
spin-off organizations.

Entrepreneurial activities are substantially different depending on the type of

organization and creativity involved. Entrepreneurship ranges in scale from
solo projects (even involving the entrepreneur only part-time) to major
undertakings creating many job opportunities. Many "high value"
entrepreneurial ventures seek venture capital or angel funding (seed money)
in order to raise capital to build the business. Angel investors generally seek
annualized returns of 20-30% and more, as well as extensive involvement in
the business.

We can classify entrepreneurship into following categories:-

 Types of Entrepreneurs :

Classification on the basis of:

• Type of business

• Use of Technology

•Motivation

•Growth

• Stages in Development

Type of business :

•Business entrepreneur: Convert ideas into reality; deal with both

manufacturing and trading aspect of business (Small trading and
manufacturing business)
•Trading entrepreneur: Undertakes trading activities; concerned
with marketing (Domestic and international level)
•Industrial entrepreneur: Undertakes manufacturing activities only;
new product development etc (textile, electronics, etc)

•Corporate entrepreneur: Interested in management part of organisation;

exceptional organising, coordinating skills to manage a corporate
undertaking (Ambani, Tata families)
•Agricultural entrepreneur: Production and marketing of
agricultural inputs and outputs (Dairy, horticulture, forestry)

Use of Technology :

•Technical entrepreneur: Production oriented, possesses innovative

skills in manufacturing, quality control etc.

•Non technical entrepreneur: Develops marketing, distribution

 facilities and strategies

•Professional entrepreneur: Uses the proceeds from sale of one

business to start another one. Brimming with ideas to start new
venture

Motivation :

•Pure entrepreneur: Psychological and economic rewards motivate

him.

•Induced entrepreneur: Incentives, concessions, benefits offered

by government for entrepreneurs motivates him.

•Motivated entrepreneur: Sense of achievement and fulfillment

motivate him.

•Spontaneous entrepreneur: Born entrepreneurs with inborn traits

of confidence, vision, initiative.

Growth:

•Growth entrepreneur: One who enters a sector with a high growth

rate; is a positive thinker.

•Super growth entrepreneur: One who enters a business and

shows a quick, steep and upward growth curve Stages in Development.

•First generation entrepreneur: Innovator, risk taker, among the

firsts in family to enter business.

•Modern entrepreneur: Who considers feasibility of business, which

can adapt to change and dynamic market.

•Classical entrepreneur: One who gives more importance to consistent returns

than to growth; concerned about customer and marketing needs.
Others :

•Area- Rural and Urban entrepreneur

•Gender/Age- Men and Women entrepreneur

•Scale- Small and Large scale entrepreneur

Q.4- Explain all motivational theories regarding entrepreneurship?

Ans. Motivation is the driving force which help causes us to achieve goals.
Motivation is said to be intrinsic or extrinsic. The term is generally used for
humans but it can also be used to describe the causes for animal behavior as
well. This article refers to human motivation. According to various theories,
motivation may be rooted in a basic need to minimize physical pain and
maximize pleasure, or it may include specific needs such as eating and
resting, or a desired object, goal, state of being, ideal, or it may be attributed
to less-apparent reasons such as altruism, selfishness, morality, or avoiding
mortality. Conceptually, motivation should not be confused with either
volition or optimism.

Motivation concepts
Intrinsic and extrinsic motivation

Intrinsic motivation refers to motivation that is driven by an interest or

enjoyment in the task itself, and exists within the individual rather than
relying on any external pressure.

Extrinsic motivation comes from outside of the individual. Common

extrinsic motivations are rewards like money and grades, coercion and threat
of punishment.
Theories of Motivation
Needs theories

• Maslow’s hierarchy of needs

• Herzberg’s two factor theory

Process theories

• Expectancy Theory
• Goal Setting Theory

Need hierarchy theory:

Abraham Maslow's theory is one of the most widely discussed theories of

motivation.

The theory can be summarized as follows:

• Human beings have wants and desires which influence their behavior.
Only unsatisfied needs influence behavior, satisfied needs do not.
 • Since needs are many, they are arranged in order of importance, from
the basic to the complex.
• The person advances to the next level of needs only after the lower
level need is at least minimally satisfied.
• The further the progress up the hierarchy, the more individuality,
humanness and psychological health a person will show.

The needs, listed from basic (lowest-earliest) to most complex (highest-

latest) are as follows:

• Physiology (hunger, thirst, sleep, etc.)

• Safety/Security/Shelter/Health
• Belongingness/Love/Friendship
• Self-esteem/Recognition/Achievement
• Self actualization
Herzberg's two-factor theory:

Frederick Herzberg's two-factor theory, a.k.a. intrinsic/extrinsic motivation,

concludes that certain factors in the workplace result in job satisfaction, but
if absent, they don't lead to dissatisfaction but no satisfaction.[7]

The factors that motivate people can change over their lifetime, but "respect
for me as a person" is one of the top motivating factors at any stage of life.

He distinguished between:

• Motivators; (e.g. challenging work, recognition, responsibility) which

give positive satisfaction, and
• Hygiene factors; (e.g. status, job security, salary and fringe benefits)
that do not motivate if present, but, if absent, result in demotivation.

The name Hygiene factors is used because, like hygiene, the presence will
not make you healthier, but absence can cause health deterioration.

The theory is sometimes called the "Motivator-Hygiene Theory" and/or

"The Dual Structure Theory."
 Cognitive theories:

Goal-setting theory:

Goal-setting theory is based on the notion that individuals sometimes have a

drive to reach a clearly defined end state. Often, this end state is a reward in
itself. A goal's efficiency is affected by three features: proximity, difficulty
and specificity. An ideal goal should present a situation where the time
between the initiation of behavior and the end state is close. This explains
why some children are more motivated to learn how to ride a bike than to
master algebra. A goal should be moderate, not too hard or too easy to
complete. In both cases, most people are not optimally motivated, as many
want a challenge (which assumes some kind of insecurity of success). At the
same time people want to feel that there is a substantial probability that they
will succeed. Specificity concerns the description of the goal in their class.
The goal should be objectively defined and intelligible for the individual. A
classic example of a poorly specified goal is to get the highest possible
grade. Most children have no idea how much effort they need to reach that
goal

Expectancy Theory:

1 Individual 2 Organisati
Individual
Performan onal
Effort
ce Rewards

3
1. Effort-Performance relationship =
Expectancy
2. Performance-Rewards relationship = Personal
Instrumentality Goals
3. Rewards-Personal goals
relationship = Valence
Q. 5- What are the rules that you will consider while maintaining
entrepreneurial culture?
Ans. . An Entrepreneurial Culture (EC) is a system of shared values,
beliefs and norms of members of an organization, including valuing
creativity and tolerance of creative people, believing that innovating and
seizing market opportunities are appropriate behaviors to deal with problems
of survival and prosperity, environmental uncertainty, and competitors’
threats, and expecting organizational members to behave accordingly.

Entrepreneurial culture is defined by the norms and behaviors present in

the region toward economic activity, particularly new business start-ups, and
reflects the institutional and absorptive capacity of the region to respond to
economic opportunity. Ability is distinct from capacity, as the former
denotes the resulting new business creation; whereas the latter merely
measures a locale's potential to produce start-ups. Entrepreneurial culture is
measured by survey and interview data gauging perceptions of local
entrepreneurs and community stakeholders in this regard. Culture, defined
narrowly in terms of attitudes and norms alone, however, is not sufficient.
Successful regions also have particular formal institutions and informal
networks that reinforce (through positive feedback and virtuous cycles) and
maintain positive externalities for firms over time – such as the
aforementioned innovative coalitions and entrepreneurial networks.
Elements of Entrepreneurial Culture:

• People and empowerment focused

• Value creation through innovation and change
• Attention to the basics
• Hands-on management
• Doing the right thing
• Freedom to grow and to fail
• Commitment and personal responsibility
• Emphasis on the future

Q.6- Explain all the barriers during the growth of an enterprise.

OR
Give all the environmental factors creating negativity.

Ans. Recognizing a need and having an idea of how to fill it are rarely a
strong enough basis for launching a new venture, particularly if the would be
entrepreneur needs to borrow capital. Most successful entrepreneurs also
create a business plan, a formal document that contains a statement of
purpose, a description of the products or services to be offered a market
analysis, financial projections and some management procedures designed to
attain the firm’s goals. Before they can write a business plan, though,
entrepreneurs must be aware of the barriers entry.

Why do entrepreneurs fail? The most common reason is ‘lack of a viable

concept’. Another common problem is a lack of market knowledge.
Sometimes it is hard to attract the people with the best information because
they already have good jobs, are chained to their present employers by
‘golden handcuffs’ or are too complacent to feel a need to do truly first rate
or important work. Even a lack of technical skills can be a problem.

Then, too, there is the difficulty of finding the $25,000 to $100,000 a start up
typically needs. Capital is even harder for women to come by, because
women often start businesses in the service sector where, a start up costs are
lower, banks make less money on the smaller loans. Women borrowed also
complain about discrimination especially among venture capitalists. Some
banks, seeing the growing number of women owned business as a potential
lucrative market have risen the demand and set up special loan programs for
women and minorities with existing businesses. Bank of America and Harris
Trust are among the banks with such programs.

A certain number of entrepreneurs fail after start up because they lack

general business know how. Some would be entrepreneurs are deterred from
entering certain lines of work – for example, housecleaning by what they see
as a social stigma. In all, twelve common barriers to entrepreneurs can be
listed.