FOUNDATIONS OF

ENTREPRENEURSHIP
DEVELOPMENT
UNIT I
 Video
• Top 10 Internet Entrepreneur of India.mp4
Success Stories of Entrepreneurs
 Who is an Entrepreneur??
➢ A person who sets up a business or businesses, taking on financial risks in the hope
of profit.
➢ An entrepreneur is an individual who, rather than working as an employee, founds
and runs a small business, assuming all the risks and rewards of the venture. The
entrepreneur is commonly seen as an innovator, a source of new ideas, goods,
services and business/or procedures.
➢ These are the people who have the skills and initiative necessary to anticipate
current and future needs and bring good new ideas to market. Entrepreneurs who
prove to be successful in taking on the risks of a start-up are rewarded with profits,
fame and continued growth opportunities.
 Definitions of an Entrepreneur
➢ The Oxford English Dictionary:
One who undertakes an enterprise especially a contractor –
acting as intermediary between capital and labour.
➢ According to J.B. Say:
An entrepreneur is the one who brings together the factors of
production and combines them into a product.
➢ According to Peter P. Drucker:
An entrepreneur is one who always searches for changes,
responds to it and exploits it as an opportunity.
Characteristics of an Entrepreneur

Creativity

Team
Innovation
Building

Characteristics

Leadership Dynamic
Characteristics of an Entrepreneur

Achievement
and Motivation

Decision Problem
Making Solving
Ability
Characteristics

Risk Goal
Taking Oriented
Qualities of an Entrepreneur
Willingness
to Assume
Risk
Drive to
Achieve Leadership
and Grow

Qualities

Confidence
in Project Decisiveness

Creative
Thinking
Qualities of an Entrepreneur

Technical
Knowledge

Honesty Flexibility

Qualities

Determination Ability to
and Courage Organize
resources
Market
Orientation
Functions of an Entrepreneur

Innovation

Risk Taking and

Managerial
Uncertainty
Functions
Bearing

Taking
Business
Decision
 Definition of Entrepreneurship
➢According to Peter Drucker:
Entrepreneurship is neither a science nor and art. It is
a practice. It has a knowledge base. Knowledge in
entrepreneurship is a means to an end; that is, by the
practice.
Difference Between Entrepreneur and
Entrepreneurship
Importance and Significance of Growth of
Entrepreneurial Activity
Capital
Formation

Economic Employment
Independence Generation

Improvement Balanced
in Per Capita Regional
Income Development
Importance and Significance of Growth of
Entrepreneurial Activity
Increasing the
Export Trade

Improvement in
Increase in
the Standard of
Productivity
Living

Reduction in
Consumer
the Income
Benefit
Inequalities
CLASSIFICATION AND TYPES
OF ENTREPRENEURS
CLASSIFICATION
⚫ Based on Functional Characteristics

⚫ Based on Type of Business

⚫ Based on Use of Technology

⚫ Based on Motivation

⚫ Based on Growth

⚫ Based on Stages of Development

⚫ Based on Area

⚫ Based on Gender

⚫ Based on Role of Operation

FUNCTIONAL CHARACTERISTICS

Innovative Entrepreneur

Imitative Entrepreneur

Fabian Entrepreneur

Drone Entrepreneur
TYPE OF BUSINESS

Business Entrepreneurs: Printing house, Garments, etc

Trading Entrepreneurs: Export- Import

Industrial Entrepreneurs : Electronics , Machine tools, etc

Corporate Entrepreneurs: Eg: Ambani

Agricultural Entrepreneurs: Dairy, Plantation, etc

USE OF TECHNOLOGY

Technical Entrepreneurs

Non- Technical Entrepreneurs

Professional Entrepreneurs
MOTIVATION

Pure Entrepreneurs: Psychological and economic rewards

Induced Entrepreneurs: Incentives, Concessions

Motivated Entrepreneurs: Profit and innovation

Spontaneous Entrepreneurs: Confidence

GROWTH

Growth Entrepreneurs: high growth industry

Super- Growth Entrepreneurs: growth performance is shown by liquidity of

funds and profitability
STAGES OF DEVELOPMENT

First Generation Entrepreneurs

Modern Entrepreneurs

Classical Entrepreneurs
OTHERS Based on Area
⦁ Urban Entrepreneurs
⦁ Rural Entrepreneurs

Based on Gender and Age

⦁ Men Entrepreneurs
⦁ Women Entrepreneurs

Based on Role of Operation

⦁ Small Scale Entrepreneurs
⦁ Large Scale Entrepreneurs
 Making Big Companies
More Entrepreneurial

INTRAPRENEURSHIP
INTRODUCTION
⚫The term ‘Intrapreneur’ was coined in USA in late seventies.

⚫It is a creation of a system which will provide selected executives a status within the
organization similar to that of an entrepreneur in the society.

⚫Intrapreneur is defined as ‘any of the dreamers who do’.

⚫Intrapreneurship involves the development of independent units designed to create a market,

and expand innovative services, technologies or methods within the organization.

⚫Some companies who promote intrapreneurial activities are General Motors, IBM, Dupont
,etc.
CHARACTERISTICS OF INTRAPRENEUR
Creates
New
Ventures
Innovates
Self
Products/
Confident
Services

Self
Innovates
Motivate
Processes
d
Intrapreneur

Competit
ively
Proactive
aggressiv
e

Renews
Risk
Organiza
Taking
tion
 ELEMENTS OF INTRAPRENEURIAL ENVIRONMENT
Organization operates on frontiers of technology
Trial and Error Encouraged
No opportunity parameters
Resources available and accessible
Multi discipline team work approach
Long time horizon
Volunteer Program
Appropriate Reward System
Sponsors available
Support of top Management
 DIFFERENCE BETWEEN ENTREPRENEUR AND
INTRAPRENEUR
Entrepreneur
Intrapreneur
⚫ Owner and operator of the business.
⚫ Only operator of the business not owner.
⚫ High Risk .

⚫ Moderate Risk.
⚫ Primary motive is independence, opportunity
to create, and make money.
⚫ Primary motive is independence, and ability to
advance in the organization, and rewards.
⚫ Serves oneself and customers.

⚫ Serves oneself, organization and customers.

⚫ Personal Capital Investment

⚫ Financial support from organization

⚫ Owns the rewards

⚫ May get increment, or reward but does not own
the rewards

⚫ Generally a small enterprise set up ⚫ Big enterprise or a new unit of a big company
ENTREPRENEURIAL
DECISION MAKING
ACTIVITIES
Decision Making Process
Articulate the Decision

Gather Information

Identify Your Options

Evaluate the Information

Select Your Decision

Implement the Decision

Review Your Decision

 Role Models
➢Influencing entrepreneurs in their career choices
➢Parents, Relatives or other successful entrepreneurs
➢Invaluable source of counsel and advice

• In order to define your role models, you should:

1. List the people you admire, both inside the business sector you operate and outside of it
2. Identify their best qualities, and why they inspire you
3. Review the processes they followed to get where they are today
 Mentor
➢ A mentor is a person who can support, advise and guide you. They typically take the time to get to know you and the challenges
you're facing, and then use their understanding and personal experience to help you improve.

➢ This relationship is additional to a manager or boss, and benefits from a more personal and confidential structure. Mentors have the
potential to become life long friends, or the relationship might only last until you've achieved a goal, there's no one size fits all.

Mentoring Definition:

➢ The act or process of helping and giving advice to another person, typically one younger or less experienced.

What is the purpose of a mentor?

➢ The purpose of a mentor is to help you excel in your career and become the best version of yourself. This may involve helping you
achieve your goals, introducing you to new ways of thinking, challenging your limiting assumptions, teaching you life lessons, and
much more.
 Schumpeter’s Innovation Theory
➢ According to Joseph Schumpeter, Innovation refers to
any new policy that an entrepreneur undertakes to
reduce the overall cost of production or increase the
demand for his products.

➢ Thus, innovation can be classified into two categories;

➢ The first category includes all those activities which

reduce the overall cost of production such as the
introduction of a new method or technique of
production, the introduction of new machinery,
innovative methods of organizing the industry, etc.

Dr. Khushnuma Tata

 Schumpeter’s Innovation Theory
➢ The second category of innovation includes all such
activities which increase the demand for a product, such
as the introduction of a new commodity or new quality
goods, the emergence or opening of a new market,
finding new sources of raw material, a new variety or a
design of the product, etc.

➢ The innovation theory of profit posits that the

entrepreneur gains profit if his innovation is successful
either in reducing the overall cost of production or
increasing the demand for his product.

Dr. Khushnuma Tata

 Criticism of Schumpeter’s Innovation Theory
➢ The innovation theory of profits has been criticized on the following grounds;

➢ It ignores the element of uncertainty.

➢ In addition to innovations, there are many other factors which give rise to profits.

➢ In modern enterprises, it is the entrepreneur who bears the risk, not the capitalist as Professor Schumpeter believes.

Dr. Khushnuma Tata

Dr. Khushnuma Tata
Dr. Khushnuma Tata
 External Influences on Entrepreneurship Development
(PESTLE)

Dr. Khushnuma Tata

 How does Culture affect Entrepreneurship Development

Attitude and
Behaviour

Working of Acceptance
Employees Level

Product
Traditions
Designing

Dr. Khushnuma Tata

 How does Culture affect Entrepreneurship Development

India

Singapore China
Important
Countries
Discussion

Canada U.S

Dr. Khushnuma Tata

 THANK YOU

Dr. Khushnuma Tata