Entrepreneurship

Prepared By:
Asst Prof. Niyati Rana Kher
A purposeful activity to initiate and develop a profit oriented business.

According to A Schumpeter “The entrepreneurship is essentially a

creative
activity or it is an innovative function”.

According to McClelland, entrepreneurship is doing things in a better

and new way and decision-making under the condition of uncertainty.

Entrepreneurship can be defined as a process of action an

entrepreneur undertakes to establish his enterprise.
“Entrepreneur” is a person who creates an enterprise or who
starts business.
To Eston Kimani, “A person who creates and manages change by the
recognition of opportunities(needs, wants, opportunities, problems and
challenges) and develops people and manage resources to take
advantage of the resources to take the opportunity and creates a
venture (profitable business).
The word „entrepreneur‟ is derived from the French verb „enterprendre‟. It
means “to undertake”.

Ducker's Views on Entrepreneur

“An entrepreneur is the one who always searches for change, responds
to it and exploits it as an opportunity. Innovation is the specific tool of
entrepreneurs, the means by which they exploit changes as an
opportunity for a different business or different service” .

Adam Smith :
The entrepreneur as an individual who forms an organization for
commercial purpose. He/She is proprietary capitalist, a supplier of
capital and at the same time a manager who intervenes between the
labor and the consumer.

“Entrepreneur is an employer, master, merchant but explicitly

considered as a capitalist”.
An entrepreneur is a person who brings in change through
innovation for the maximum social good. Entrepreneur is an
individual who organizes an enterprise or a business venture by
combining various factors of production for production of goods
or services with an aim of selling them at profit.

Entrepreneur as a risk bearer

Entrepreneur as an organizer
Entrepreneur as an innovator
Enterprise is that where Entrepreneurial activity is going on. Like:
Company, Industry, Firm, organization, office, agency, franchise,
Shops etc.

E — Energy P — Planning
N — Need to achieve R — Risk-taking
T — Task oriented I — Innovation
E — Empathy S — Skills
R— E — Endurance
Resourcefulness

Enterprise supports the recognition of new market opportunities as

well as develops the opportunity to change and develop at the
individual, business and industry/sector levels.
The various definitions of entrepreneurship innovation and
risk bearing.

(1)Innovation: Innovation is doing something new or

something different. Entrepreneurs constantly look out to
do something different and unique to meet the changing
requirements of the customers. Hence entrepreneurship
needs to apply inventions on a continuous basis to meet
customers changing demands for products.

(2)Risk Bearing: An entrepreneur needs to be bold enough

to assume the risk involved and hence an entrepreneur is
a risk-bearer not risk-avoider. This risk-bearing ability
keeps him to try on and on which ultimately makes him to
succeed.
WHAT ARE DIFFERENT OUTCOMES OF ENGAGING IN
ENTREPRENEURSHIP?

 Innovation or newness – Product or services

 Organizing resources – finance, people, physical and
information resources.
 Generating wealth
 Creating new product or service.
 Taking risk in business venture
 Prepared to face uncertainty
 Create job opportunity
 Increase the abundance of wealth generation for the
nation.
RELATIONSHIP BETWEEN ENTREPRENEUR AND
ENTREPRENEURSHIP

Entrepreneur Entrepreneurship
Person Process
Visualizer Vision
Creator Creation
Organizer Organization
Innovator Innovation
Planner Planning
Leader Leadership
Difference between Entrepreneur and Manager

Points Entrepereneur Manager

Motive The main motive of an Main motive of a manager is to
entrepreneur is to start a venture render services in an enterprise
for his personal gratification. already set by someone else.
Status Owner Servant
Risk Assumes risk and uncertainty Manager does not bear any risk
involved in enterprise.
Rewards Profits, which are highly uncertain Salary which is certain and fixed
and not fixed.
Innovation Entrepreneur himself thinks A manager simply executes plans
over prepared by the entrepreneur.
what and how to produce goods to
meet the changing needs of the
customers. Hence he acts as
innovator / change agent.
Qualificati An entrepreneur needs to possess A manager needs to possess
on qualities and qualifications like distinct
high achievement motive, qualifications in terms of sound
originality in thinking, foresight, knowledge in management
risk bearing ability etc. theory and practice.
Who is an Intrapreneur?

When we split the term we will get, intra + preneur stands for intra-corporate
entrepreneur. To heritage dictionary, “A person with in a large corporation who
takes direct responsibility for truning an idea into a profitable finished product
through assertive risk-taking and Innovation.”

Intrapreneur thinks like an entrepreneur or leaves to start a new company.

Difference between Entrepreneur and Intrapreneur?

Points Entrepreneur Intrapreneur
Dependency He is independent in his He is dependent on the entrepreneurs
operation. i.e. owner.
Raising of He himself raises funds required He does not raise funds for the
funds for the organization. organization.
Risk Entrepreneurs bears the risk He does not fully bear the risk
involved in the business. involved in the organization.
Operation An entrepreneur operates from An intrapreneur operates from
Outside inside.
Innovation Entrepreneurs converts the ideas Intrapreneurs takes the responsibility
into viable opportunities. of creating innovation.
Reward Entrepreneurs takes the profit of He is provided with a variety of
the business. perquisite for his innovation.
 Small businessman Entrepreneur
Engages in business activities
for the purpose of profit to Starts the venture, assumes
support his living and his leadership and expands the
family. venture to fulfill personal
goals and attain self
accomplishment.
Low risk-taker. Moderate risk-taker.
Follows others and invests Takes calculated risks
only in tested and proven
markets.
 QUALITIES OF A
SUCCESSFUL
(i) Initiative ENTREPRENEUR
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 t
here 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.

(vii) 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.
PROBLEMS FACED BY
ENTREPRENEURS
TYPES OF ENTREPRENEURS

• Innovative Entrepreneur: 
These are the ones who invent the new ideas, new products, new
production methods or processes, discover potential markets and
reorganize the company’s structure. These are the industry leaders and
contributes significantly towards the economic development of the
country. The innovative entrepreneurs have an unusual foresight to
recognize the demand for goods and services. They are always ready to
take a risk because they enjoy the excitement of a challenge, and every
challenge has some risk associated with it.
eg: Ratan Tata is said to be an innovative entrepreneur, who launched
the Tata Nano car at a considerably low cost.
• Imitating Entrepreneurs: The imitating entrepreneurs are those who
immediately copy the new inventions made by the innovative
entrepreneurs. These do not make any innovations by themselves; they
just imitate the technology, processes, methods pioneered by others.
These entrepreneurs are found in the places where there is a lack of
resources or industrial base due to which no new innovations could be
made. Thus, they are suitable for the underdeveloped regions where they
can imitate the combinations of inventions already well established in the
developed regions, in order to bring a boom in their industry.
• Fabian Entrepreneurs: These types of entrepreneurs are skeptical
about the changes to be made in the organization. They do not initiate
any inventions but follow only after they are satisfied with its success
rate. They wait for some time before the innovation becomes well tested
by others and do not result in a huge loss due to its failure.
• Drone Entrepreneurs: These entrepreneurs are reluctant to change
since they are very conservative and do not want to make any
changes in the organization. They are happy with their present mode
of business and do not want to change even if they are suffering the
losses.
• Thus, this classification is done on the basis of the willingness of an
entrepreneur to create and accept the innovative ideas