Technocrat -

Entrepreneur

Submitted to: Prof. Kavita Chavali

Submitted by: Vani Vyas (08PG353)

1. What is the background of the promoter?

In the given case, Mr. Saha, a technocrat entrepreneur started his job at a
mechanical workshop. He had an excellent educational background and
wanted to start a business of manufacturing staple removers. He is a
highly qualified Mechanical engineer, with post-graduate degrees and
diplomas in Industrial Management and Industrial Engineering from some
leading universities of the world, including the famous MIT. He also has
practical experience in leading companies in the United States, Britain and
India.

2. What were the difficulties faced by the promoter in the initial stages?

 Problem due to location (shed) requirement: At first Mr. Saha was

looking for a shed measuring 2000 sq.ft but wasn’t able to locate a
suitable shed. The current requirement was only 1000sq.ft; but he
needed extra shed space for future expansion plans.

 Products rejected due to quality issues: initially most of the products

were getting rejected by the customers which annoyed Mr. Saha
and let him loose his wrath upon the workers.

3. How was the relationship of the promoter with the bank?

Initially Mr. Saha was in good terms with the bank. He was one of the
first technocrats to receive financial assistance from bank under a
special scheme on the basis of his impressive background, belief in his
integrity and confidence. Funds kept coming in whenever his project
needed them. It was because of such strong relationship that his book
debts were raised to the extent of Rs. 80000. But eventually over 6
months the relationship deteriorated since Mr. Saha refused to follow
bank’s advice. He hid essential information from the bank and the bank
 was forced to withdraw further assistance to him. His account was
transferred to another branch and to consider the question of recalling
the advance, filing a suit against Mr. Saha and invoking the RBI
guarantee.

4. What are your views on the entrepreneurial qualities of the promoter?

The promoter possesses the following entrepreneurial qualities:

Concern for high quality of work: Mr. Saha was conscious for high
quality of work. It was because of his quality concern that made him
appoint senior engineer and inspectors for quality control.

Initiative: Mr. Saha was bold enough to give up his job and start up a
new venture with the industry experience and expertise what he had
gained over the years.

Persuasion: He was able to convince bank in providing financial

assistance and even extending his book debt to Rs. 80000. Also he was
able to enter into contract.

Self confidence: Mr. Sinha didn’t want to share the credit of starting his
own firm with someone else since he was confident of being successful.

5. What were the reasons for the promoter for facing difficulties with the
bank?

Mr. Saha had a tough time with the lending bank due to the following
reasons:

 Expensive lifestyle, location and overheads.

 Customers’ rejections of products and delaying of payments.

 Failing to adhere to the norms of the bank.

 Ignoring the warnings and suggestions; thereby forcing the bank to

take immediate actions.
 Untimely disclosure of operational activities to the bank.