ENTREPRENEURIAL

BEHAVIOR:
TRANSFORMING AN INNOVATIVE IDEA INTO AN ENTREPRENEURIAL
PRODUCT
LESSON IV:
ENTREPRENEURIAL
COMPETENCIES
 ENTREPRENEURIAL COMPETENCIES

What is Entrepreneurial Competencies? A competence is an underlying

characteristic of a person that helps one perform better. Thus, the entrepreneurial
competence means one’s underlying.
Characteristic that helps the entrepreneur perform his entrepreneurial role in a better
or superior manner.
Entrepreneurial competence has three main components:
(i) Knowledge
(ii) Skill and
(iii) Motive
 ENTREPRENEURIAL COMPETENCIES

Knowledge - It means one’s awareness or familiarity with something through the collection and
retention of information and facts on it; but with knowledge, one also needs to have skills to translate
knowledge into action.
Skill - Skill is the ability to demonstrate a system and sequence of behavior which results in
something observable, something that one can see also. Both knowledge and skill are required to
perform a task effectively.
Motive - It is an urge or drive that makes one move to active the set goal. It is one’s achieving motive
that motivates one to make continuous efforts to achieve the set goal.
Thus, it becomes quite clear that in order to perform any task effectively including establishing
and running an enterprise, a person or say, an entrepreneur needs to possess a set of attributes,
namely knowledge, skill and motive which could together be called as competencies.
 MAJOR ENTREPRENEURIAL COMPETENCIES:

Initiative - The entrepreneur initiates a business activity i.e., he takes the first step to start
an enterprise.
Passion - The entrepreneur should possess a passion for his enterprise. He, therefore,
develops more than a casual interest in the enterprise of that he could overcome various
hurdles and obstacles coming on the way of starting an enterprise.
Tenacity Despite Failure - Because of hurdles and obstacles that must be over come, the
entrepreneur must be persistent and must not give up easily. Many successful entrepreneurs
succeeded only after they had failed several times.
Self-Confidence - Entrepreneur is a strong believer in his strengths and abilities. He
believes that he possesses the ability to accomplish whatever hastes out to do and achieve.
This confidence is not unfounded, however.
 MAJOR ENTREPRENEURIAL COMPETENCIES:

Sheer Grit And Strong Determination - The life history of successful entrepreneurs reveals that
they are characterized by self-motivation and strong determination in their goal. They act out of
choice. They are never victim of fate.
Creativity - One of the reasons that entrepreneurs are successful is that they have imagination and
can envision alternatives scenarios. They have the ability to recognize opportunities that other
people do not see.
Change Seeks - To the most of people change is often frightening and is something to be abided
but , successful entrepreneurs see change as normal and necessary.
High Need for Achievement - Successful entrepreneurs have high need for achievement” than the
general population. The achievement motive is converted into drive and initiative that results in
accomplishment.
 MAJOR ENTREPRENEURIAL COMPETENCIES:

Risk Taking Attitude - The life stories of successful entrepreneurs reveal that they take
high risks than the common people. It is their risk bearing attitude that makes them
tenacious achiever.
Team Spirit - Successful entrepreneurs build team and work with team makes. Team is a
group of individual who work in a face to face relationship to achieve a common goal they
share collective accountability of the outcome of the team’s effort.
 DEVELOPING ENTREPRENEURIAL

Competency can be developed and sharpened following a

procedure. This procedure involves the following four steps:-
Competency Recognition
Self-Assessment.
Competency Application.
Feed-back.
 DEVELOPING ENTREPRENEURIAL

1. Competency Recognition - Acquisition of a new behavior begins with understanding and

recognition of what a particular behavior means.
2. Self-Assessment - Once the particular competence, the next step towards acquiring a
particular behavior is to see whether one possesses that particular competence or not.
3. Competency Application - In order to make a new behavior a part of one’s personality, the
particular competence needs to be applied frequently even in the simplest activities that one
performs in one’s day –to-day life . This is because practice makes a man perfect.
4. Feed Back - After understanding internalizing and practicing a particular behavior or
competence, one needs to make an introspection of the same in order to sharpen and strengthen
one’s competency this is called feed back.
Feed back means to know the strengths and weaknesses of one’s new behavior.
 ENTREPRENEURSHIP DEVELOPMENT
PROGRAMS (EDPS)
Meaning of EDP - EDP is a program meant to develop entrepreneurial abilities among he
people. In other words, it refers to inculcation, development, and polishing of entrepreneurial
skills into a person needed to establish and successfully run his/her enterprise. Thus, the
concept of entrepreneurship development program involves equipping a person with the
required skills and knowledge needed for starting and running the enterprise.
Need for EDPs - One of the important fact that made people to appreciate need for and
importance of the entrepreneurial training. Now popularly known as “EDPs” to induce
motivation and competence among the young prospective entrepreneurs was the “Kakinada
Experiment.”
 SIMILARITIES AND DIFFERENCES BETWEEN
ENTREPRENEURSHIP AND
INTRAPRENEURSHIP
Other famous authors have also pinpointed some differences between
entrepreneurship and intrapreneurship. Even though intrapreneurship is rooted in
entrepreneurship (Amo & Kolvereid, 2005; Antoncic, 2001; Davis, 1999; Honig, 2001), there
are several differences between these two concepts. In this context Antoncic & Hisrich (2003)
note that while intrapreneurs make risky decisions by using the resources of the company,
the entrepreneurs make risky decisions using their own resources (Antoncic & Hisrich, 2003).
Intrapreneurship takes place among employees from within an organization while
entrepreneurship tends to mainly be externally focused (Antoncic & Hisrich, 2003; Davis,
1999). Entrepreneurs prefer to develop tacit knowledge, in new organizations, instead of
using procedures and mechanisms from other companies. On the other hand intrapreneurs
work in organizations that have their own policies, procedures and bureaucracy (Antoncic &
Hisrich, 2003; Davis, 1999).
 COURSE, CONTENTS AND CURRICULUM OF
EDPS:
The course contents of an EDP are selected in line with objectives of the EDPs. The EDP
training program is usually for six weeks duration. It consists of following six inputs:
1. General Introduction to Entrepreneurship - First of all, the participants are exposed
to a general knowledge of entrepreneurship such as factors affection small – scale
industries, the role of entrepreneurs in economic development , entrepreneurial behavior
and the facilities available for establishing small – scale enterprises.
2. Motivation Training - The training inputs under this aim at inducing and developing the
need for achievement motive among the participants. This is, in fact a crucial point of
entrepreneurship training. Efforts are made to inject confidence and positive attitude and
behavior among the participants towards business.
 COURSE, CONTENTS AND CURRICULUM OF
EDPS:
3. Management skills - Running a business, whether large or small requires the managerial skills. Since a
small entrepreneur cannot employ management professionals to manage his business he needs to be imparted
basic and essential managerial skills in marketing human resource and production.
4. Support System and Procedure - The participants also need to be exposed the support available from
different institutions and agencies for setting up and running small-scale enterprises.
5. Fundamentals of Project Feasibility Study - Under this input, the participants are provided guidelines
on the effective analysis of feasibility of the particular project in view of marketing finance, organization and
social aspects.
6. Plant Visits - In orders to familiarize the participants with real life situations in small business plant visits
are also arrange.
On the whole, the ultimate objective of entrepreneurship training program is to make the trains
prepared to start their own enterprises after the completion of training program.
 PHASES OF EDPS:

An entrepreneurship development program consists of the

following three phases:-
1. Pre-training phase
2. 2. Training Phase
3. 3. Post-training Phase
 PHASES OF EDPS:

These are discussed in turn:

1. Pre-training Phases - The activities and preparations required to launch the training
program come under this phase. This phase, accordingly, includes the following:
 Selection of entrepreneurs.
 Arrangement of infrastructure.
 Tie-up of Guest faculty of the training purposes
 Arrangement of the inauguration of the program.
 Selection of necessary tools and techniques to select the suitable entrepreneurs.
 Formation of selection committee for selecting trainees
 PHASES OF EDPS:

 Arrangement of publicity media and campaigning for the program.

 Development of application form.
 Finalization of training syllabus.
 Pre-potential survey of opportunities available in the given environmental conditions.
 SELECTION PROCEDURE OF EDP TRAINEES

Selection of the trainees is the most vital component in an entrepreneurship

development program (EDP). Initially, the selection procedure for EDP
trainees comprises of the following:
Psychological Tests like thematic Appreciation Tests (TAT), risk-taking,
personal efficacy.
Find out the social-economic background of the candidates and
Personal interviews.
 SELECTION PROCEDURE OF EDP TRAINEES

Realizing that an entrepreneur is required to perform a number of activities

starting from self-management to human and technical management, if was
decided to assess the suitability of the trainers by making the use of the
following methods:
1. Analysis of the application blank.
2. Psychological tests.
3. Group planning exercise and
4. Personal interview.
 SELECTION PROCEDURE OF EDP TRAINEES

1. Analysis of Application Blank - Like most of other selection application, application

blank comprises of questions relating to demographic, educational, family-back-ground,
previous-experience, social participation, and level o0f aspiration of candidate.
2. Psychological Test - The different psychological tests developed and used to assess the
suitability of the candidate to attend the EDP training are:
(a) TAT (thematic Appreciation Test) - This is used to assess the need for achievement or
the need for power a candidate has. It is basically a semiprojective test in the sense that in this test
six deliberately thematic pictures are shown the candidate for a short period usually 30 seconds.
Then, the candidate is asked to write a story about each picture within a short time for 5 minutes.
Based on experiments, it is assumed that a careful analysis of this test may give an indication
about the candidates need for achievement.
 SELECTION PROCEDURE OF EDP TRAINEES

(b) Ring Toss Game - The ring toss game is played with three rings and one peg the
trainer marks the distance form the peg and asks the candidates to select any distanced for
throwing all the three rings. The risk of the candidates is scored according to the distance chosen
and the amount of risk perceived by the respondents from that distance.
(c) Locus Of Control - The locus of control is measured by administering a well-structured
and developed questionnaire consisting of 29 pairs of statements representing internal and
external locus of control, in simple words, the persons who believe. That they are the makers of
their dusting or they are responsible of what happens with them is not under their control and it is
their destiny is called persons with external locus of control’ the candidate’s responses to the
statements are given scores. It is assumed that a high score on internal locus of control is
indicative for entrepreneurial behavior.
 SELECTION PROCEDURE OF EDP TRAINEES

3. Group Planning Exercise - In this exercise, the trainer assigns a task to the candidate and
explains the objectives to be accomplished. The resources required to perform the task are made
available to the candidates to complete the task with in a definite period of time. The trainers-
observers observe the candidate’s behavior while performing the task. The key behaviors
observed are the candidate’s commitment to task, planning and organizing ability and decision
making ability. the average score in respect of each aspect is computed and the respondents are
categorized as:
(i) Above Average (ii) Average and (iii) Below Average
4. Personal Interview - It is conducted to assess the knowledge, interest and skill required by
the candidates. The interviewer’s score for each of the above mentioned aspects are recorded.
Finally, score given to all candidates are averaged.
 EVALUATION OF EDPS

Developing entrepreneurship has become a movement in India in the

recent years. EDPs have been considered as an effective instrument of
developing entrepreneurship in the countryside. Hundreds of EDPs are
conducted by some 686 organizations to import entrepreneurial training to
participants in thousands. It seems necessary to see whether the objectives
of EDPs are fulfilled or not. In simple words, there is a need to have a
retrospective look into how many participants have actually started their own
enterprises after completing the training. This calls for the evaluation of EDPs.
 EVALUATION OF EDPS

One way of evaluating the EDPs is to assess their effectiveness in developing evaluation of EDPs the behavioral scientists are the following
criteria to asserts the effectiveness of EDPs in motivating the entrepreneurs:

• Activity level of the respondents.

• Investments in fixed assets made

• Total investments made

• Number of people employed

• Number of jobs created

• Increase in profit.

• Increase in sales.

• Quality of products / service improved.

• Quicker repayment of loans.

• New enterprise established.

 EVALUATION OF EDPS

In other behavioral experiments, the impact of EDPs is measured with the

help of indices relating to the entrepreneurial behavior. The entrepreneurial
behavior is measured on the following four dimensions:
• Planning Orientation.
• Achievement Orientation.
• Expansion Orientation.
• Management Orientation.
 PROBLEMS OF EDPS:

EDPs suffer on many counts. The problems and lacuna are on the part of all those who are
involved in the process, be it the trainers and the trainees, the ED organizations, the supporting
organizations, and the state governments the important problem EDPs face are as follows:
• Trainer-motivations are not found up to the mark in motivating the trainees to start their own
enterprises.
• ED organizations lack in commitment and sincerity in conducting the EDPs.
• Non-conducive environment and constraints make the trainer-motivators role ineffective.
• The antithetic attitude of the supporting agencies like banks and financial institutions serves as
stumbling block in the success of EDPs.
• Thus, it is clear that the problems are not with the strategy but with its implementation.
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