Entrepreneurship introduction Meaning Definition ..., Exams of Entrepreneurship

Download Entrepreneurship introduction Meaning Definition ... and more Exams Entrepreneurship in PDF only on Docsity! 18BCO5EL-GENERAL COMMERCIAL KNOWLEDGE I-UNIT-III Entrepreneurship-meaning-types-qualities of an entrepreneur-factors influencing entrepreneurship-functions of entrepreneur. Entrepreneurship introduction The term entrepreneurship denotes the process of setting up one's own business venture as distinct from pursuing any other economic activity or any employment or practicing some profession. The person who establishes business is termed as entrepreneur. The output of an entrepreneurial process ends up in establishing an enterprise. Meaning Entrepreneurship generates employment opportunities to many people besides providing self-employment to the entrepreneur. Any business venture started triggers a variety of economic activities like purchasing raw material, creating employment opportunities and so on. Thus, entrepreneurship become crucial for overall economic development of a nation. Entrepreneurship can be regarded as one of the four major factors of production besides the other three namely land, labour and capital. Definition According to J.A. Schumpeter Joseph A. Schumpeter, "Entrepreneurship is essentially a creative activity. It consists of doing such things as are generally not done in ordinary course of business. An entrepreneur is one who innovates, i.e. carries out new combination or enterprise. As per Mary Coulter, "Entrepreneurship is the process whereby an individual or group of individuals use organised efforts to pursue opportunities to create value and grow by fulfilling wants and needs through innovation and uniqueness, no matter what resources the entrepreneur currently has." Entrepreneurship plays a pivotal role in the economic development of a country. Characteristics of Entrepreneur The following points highlight the characteristics of entrepreneurship. 1. Spirit of Enterprise Entrepreneur should be bold enough to encounter risk arising from the venture undertaken. Entrepreneur should not get discouraged by setbacks or frustrations emerging during the course of entrepreneurial journey. 2. Self Confidence Entrepreneur should have a self confidence in order to achieve high goals in the business. The negativities like inconvenience, discomfort, disappointments, rejections, frustrations and so on should not weaken his steely resolve to make the venture a grand success. 3. Flexibility Entrepreneur should not doggedly stick to decisions in a rigid fashion. Entrepreneur should change the decisions made already in the light of ever-changing business environment. 4. Innovation Entrepreneur should contribute something new or something unique to meet the changing requirements of customers namely new product, new method of production or distribution, adding new features to the existing product, uncovering a new territory for business, innovating new raw material etc., 5. Resource Mobilisation Entrepreneur should have the capability to mobilise both tangible inputs like manpower, money materials, technology, market, method etc., which are scattered over a wide area and certain intangible inputs like motivation, morale and innovativeness cannot be purchased in the market outright. Entrepreneur has to marshal all these tangible and intangible inputs to produce a product successfully. Thus entrepreneurship is a function Of gap filling and input completion. 6. Hard work Entrepreneur should put in strenuous efforts and constant endeavours to accomplish the goals of the venture successfully. They have to courageously face uncertainties, risks and constraints. They should not blame the uncontrollable factors for the misfortunes experienced during the course of their entrepreneurial venture. They should spend their energy in addressing the issues to stay successful. 7. Leadership Entrepreneur should be able to influence team members by showing sympathy and empathy so as to enable them to contribute positively towards the goals of the venture. Entrepreneur should lead others from the front and by personal example and should walk the talk and effectively take all the followers to activate the goals of the venture. 8. Foresight Entrepreneur should have a foresight to visualise future business environment. In other words, Entrepreneur should foresee the likely changes to take place in market, consumer attitude, technological developments etc., and take timely actions accordingly. 9. Analytical Ability Entrepreneurs should not make decisions on the basis of own prejudice or personal likes and dislikes. Entrepreneur should be able to objectively analyse the situation and act accordingly. FACTORS AFFECTING ENTREPRENEURIAL GROWTH There are large number of varied factors which contribute to the growth of entrepreneurship. These factors can be broadly classified into five. PSYCHOLOGICAL FACTORS: - Inspiration for achievement prepares an entrepreneur to set higher goals and achieve them. The important psychological factors influencing entrepreneurial growth may be outlined as below: • Need for Achievement • Personal Motives • Recognition • Need of Authority CULTURAL FACTORS: - Culture consists of Tangible man – made objects like furniture, buildings etc . Intangible concepts like Laws, morals, knowledge etc .Values and behaviour acceptable within the society. • Culture • Religious Belief • Minority Groups • Spirit of Capitalism SOCIAL FACTORS: - What mould a man into an entrepreneur is the sociological and environmental factors during childhood, and at the school, personal experience in adult life at the college and job environments, the mobility, occupation and support from parents. The social factors include: • Legitimacy of Entrepreneurship • Social Marginality • Family, Role Models and Association with Similar Type of Individuals • Caste System • Occupation • Education and Technical Qualifications: - Education • Social Status • Social Responsibility ECONOMIC FACTORS: - Economic factors also influence the growth of entrepreneurship. The important economic factors are: • Infrastructural Facilities • Financial Resources • Availability of Material and Know – How • Labour Conditions • Market • Support System • Government Policy PERSONALITY FACTORS: - The supply of entrepreneurship in a society is largely influenced by the presence of individuals with the imitativeness, foresightedness and organizing and managerial competence. The following personality factors contribute to the entrepreneurial development: • Personality • Independence • Compulsion QUALITIES OF A SUCCESSFUL ENTREPRENEUR To organize and run it successfully, the entrepreneur must possess some qualities and traits. They are as following: 1) Willingness to Make Sacrifices and Assume Risks: - A new venture is full of difficulties and unanticipated problems. In such an inhospitable environment entrepreneur has to be prepared to sacrifice his time, energy and resources in order to carry out the venture and make it success. 2) Hard Work: - Willingness to work hard distinguishes a successful entrepreneur from an unsuccessful one. For example, Assim Premji (chairman of Wipro) works in his office fourteen hours every day. He is a successful entrepreneur. He is one of the richest persons in India. 3) Optimism: - Successful entrepreneurs are not worried by the present problems that they face. They are optimistic about the future. This enhances their confidence and drives them towards success. Some of the world’s greatest entrepreneurs failed before they finally succeed 4) Self Confidence: - This is the greatest asset of a successful entrepreneur. He must have the confidence to make choices alone and bounce back when he fails. 5) Leadership: - Successful entrepreneur generally has strong leadership qualities. He should be a good judge of human nature and a good leader. He must be able to select, train and develop persons who can properly manage and control the labour force. FUNCTIONS OF AN ENTREPRENEUR Entrepreneur is a lead player in the drama of business. According to Kilbt, an entrepreneur has to perform four groups of functions: EXCHANGE RELATIONSHIP: • Perceiving market opportunities • Gaining command over scare resources. • Purchasing inputs. • Marketing of the products and responding to competition. POLITICAL ADMINISTRATION: • Dealing with public bureaucracy (concession, licences and taxes) • Managing the human relation within the firm. • Managing customer and supplier relations. MANAGEMENT CONTROL: • Managing finance. • Managing production. TECHNOLOGY: • Acquiring and overseeing assembly of the factory • Industrial engineering. • Upgrading process and product quality. • Introducing new products According to Arther H. Cole, an entrepreneur performs the following functions: • Determining the objectives of the enterprise and revising the objectives in the light of changed circumstances. • Developing an organization including efficient relations with subordinates and all employees. • Securing adequate finance. • The requisition of efficient technological equipment • Developing a market for the products and devising new products to meet customers demand. • Maintaining good relations with public authorities and with society.