Entrepreneurship Development

Introduction To Financial Management The Entrepreneurship Development Perspective

Prof. Chinmaya Padhi

Who controls our business?

Who is entrepreneur?
Some inventors have a natural talent for business, but many more of them have been people who liked to make and discover things but did not know what to do when they succeeded. Capitalists may also be business executives, but their specific function is to provide the financial resources for an enterprise and many are content to do only that. Managers obviously are in business but a manager who takes over an existing operation is usually very different from a manager who starts one up. Example: Mr. Narayan Murthy a genius at computers, applied his knowledge to the founding of Infosys Technologies Ltd.

Objectives of industrialization

The greatest social tragedy in a poor country is the loss of will

Factors affecting industrialization

Government policies. Natural Resources

Mineral resources, Energy resources Forest resources Marine resources Water resources.

Natural Factors:
Geographical Climatic Technical.

Entrepreneurship. Human Resources. Finance and Capital. Market and Infrastructure.

Classification of Indian industries

Ownership basis: (i) Public sector, (ii) Private sector Size basis: (i) Tiny sector, (ii) Small sector, (iii) Medium sector. (iv) Large sector Nature of operation basis: (i) Manufacturing, (ii) Trading, (iii) Distributic (iv) Infrastructure, (v) Service sectors Jobs done basis: (i) Artists, (ii) Agents, (iii) Professionals, (iv) Agriculturists, etc.

Reason for self employment through entrepreneurship

It provides an opportunity to enter into a process which leads to the realization of individual's passion for innovation and development. To find a suitable employment, one has to knock many doors and soak many socks and even then, one may not succeed. But to be an entrepreneur one has to knock only one door, that is one's own-self and if the qualities and competencies are there in whatever small quantity, the prospects to succeed are there. The shocks are there entrepreneurship too, but they can be absorbed if one, has decided to be entrepreneur.

Reason for self employment through entrepreneurship

The Government of India and the states offers many facilities, incentives and schemes to help new entrepreneurs and particularly qualified individuals, be it technical, managerial or otherwise in taking up entrepreneurial career. As an entrepreneur, one is not only employed but creates employment for others, one is not only realizing the goal in his life but is also a source of livelihood for so many.

Emphasis on entrepreneurship in India

Entrepreneurship is not a matter of heritage, it is entirely a manifestation of such potentialities that any individual born in any caste, community and class can have. There is no need for such a person to be groomed from the very childhood for becoming an entrepreneur. Industrialization results from the interaction of technological change, innovation, entrepreneurial growth, specialisation and trade. Large industrial units and business houses also have an important role to play in developing and sustaining new entrepreneurship. Inspite of India having abundant natural and human resources, we are not a prosperous country because of ENTREPRENEURSHIP being still a comparatively scarce factor, as indeed in all developing countries. Government economic policies have an important impact on the growth of entrepreneurship. Among the prominent economic policies, to develop entrepreneurship has been the strategy to stimulate small scale sectors (SSI) to use it as a tool for economic growth. small units/enterprises. have made phenomenal progress during the last five decades and today occupy an important position in the industrial economy of India. Every new Industrial Policy Resolution (IPR) aims at entrepreneurship development through small scale industry' sector development.

Plan outlay for small industry development

Qualities and traits required to be a successful entrepreneur

Willingness to make sacrifices Leadership Decisiveness Confidence in the project Marketing orientation Strong ego

Chapter 2 The Entrepreneur

Definition
Entrepreneur is an initiator of action, stimulator of social economic changes, and a harnesser of resources and factors of production to create wealth. Entrepreneurship is neither a science nor an art.

Characteristics of an entrepreneur
Technical competence Initiative Good judgment Intelligence Leadership Confidence Energy Attitude Creative Fair Honest Tact Emotionally stable Motivator Long term involvement Persistent problem solver Goal setter Moderate risk taker

Qualities of an entrepreneur
He is an enterprising individual. He is energetic, hard working, resourceful, alert to new opportunities, able to adjust himself to changing conditions with ease and willing to assume risks involved in change. He is interested in advancing technologically and in improving the quality of his product or service. He is interested in expanding the scale of his operations by reinvesting his earnings. He visualizes change and adapts. He is a firm believer in planning and systematic work.

He works for the society at large and for the good of his fellow beings.

Entrepreneurs are born and not made

Since entrepreneurial qualities are to some extent innate i.e., inborn, hence entrepreneurs are born is partially true, however all qualities entirely are not inborn, some can be enhanced by training and some can be acquired by experience. Example: Analytical ability and computational skills can be enhanced by education at school and university, while practical knowledge and foresight skills can be enhanced by experience. Technical capabilities can be developed and skill can be acquired with practice, patience and perseverance.

Interpreneur
They are entrepreneurs who catch hold of a new idea for a product, service or process work to bring their vision to fruition within the framework of the organization.

Types of entrepreneur

The role of entrepreneur in modern economic development

The entrepreneur co-ordinates the factors of production (selection of the right type of factors, employment of each factor in the right quantity, use of the best technical devices. division of labor, reduction of waste, etc ) The entrepreneur takes risks Finally, the entrepreneur innovates. Innovation is different from invention. Invention the work of scientists. Innovation implies the commercial application of an invention

Innovation category by an entrepreneur

The introduction of a new goods or a new quality of goods The introduction of a new method of production The opening of a new market The conquest of a new source of supply of raw materials The carrying out of a new organization of any industry.

Entrepreneur self check test (>7)

Do you find yourself "selling" others your own ideas? Do you enjoy working independently? Can you handle a lot of things at the same time? Do you often come up with more than one solution to a problem? Do you consider yourself smarter than your boss? Are you willing to work long hours? Do you have skills or interests that others admire? Are you always willing to learn? Are you persistent? Do you feel that most events in your life are determined by you?

Chapter 3 Entrepreneurial Motivation

The basic elements of the process of motivation

Maslows need hierarchy theory

McClellands acquired need theory

According to David McClelland, a person acquires three types of needs as a result of one': life experience. These three needs are:
Need for Affiliation These refer to needs to establish and maintain friendly and warn' relations with others. Need or Power These mean that one's desire to dominate and to influence others using physical objects and actions. Need for Achievement This refers to one's desire to accomplish something with owr efforts. This implies one's will to excel in his/her efforts.

McClelland also suggests that these three needs may simultaneously be acting on an individual. But, in case of an entrepreneur, the high need for achievement is found as the dominating one.

Motivating Factors
Internal Factors Desire to do something new Educational background Occupational background or experience. External Factors Government assistance and support Availability of labor and raw material Encouragement from big business houses Promising demand for the product.

Factors which prompted new entrepreneurs to enter into entrepreneurship (survey results)

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