Chapter: 1

FOUNDATIONS OF ENTREPRENEURSHIP DEVELOPMENT CONCEPT

AND NEED OF ENTREPRENEURSHIP DEVELOPMENT
BRIEF QUESTIONS:
a. Define entrepreneurship. Explain the need for entrepreneurship development.
Entrepreneurship is the propensity of mind to take calculated risks with
confidence to achieve a predetermined business or industrial objective. In
substance, it is the risk taking ability of the individual, broadly coupled with
correct decision-making.
According to Frank Knight, It involves a specialized group or persons who bear
risks and meet the uncertainty.
Need of entrepreneurship development:
1. Innovation: Innovation is a process of creating, changing, experimenting,
transforming and revolutionizing. Innovation is one of the key distinguishing
characteristics of entrepreneurial activity. The creative destruction process
of innovating leads to technological changes and employment growth.
Entrepreneurial firms act as these agents of change by providing an
essential source of new and unique ideas that might otherwise go.
2. Job Creation: We know that job creation is vital to the overall long-term
economic health of communities, regions and nations. Entrepreneurial
ventures play very important role in it. Small business create more jobs than
large business do. the creation of jobs by small businesses is expected to
continue into the future as new firms start small and grow.

3. Number of New Start-ups: All businesses whether they fit the definition of
entrepreneurial or not at one point in time were start-ups, the most
convenient measure we have of the role that entrepreneurship plays in this
economic statistic is to look at the number of new firms over a period of
time. The creation of new firms is important because these new firms
contribute to economic development through benefits such as productprocess innovations, increased tax revenues, social betterment, and job
creation.
4. Opportunity to Contribute to Society and Be Recognized for Your Efforts:
Business deals based on trust and mutual respect are the hallmark of many
established small companies. These owners enjoy the trust and recognition
they receive from the customers they have served faithfully over the years.
Entrepreneurship often deals with the difficult issues of social responsibility
and ethical problems. Entrepreneurship produces such goods and services
that protect consumer health and global environment and helps in creating
better living conditions in society.
5. Path of Creating Tomorrow: Peter Drucker Says, Entrepreneur has to seek
off yesterday and to render obsolete what already exists and is already
known. He has to create tomorrow. Making the business of tomorrow cannot
be a flash of genius. It requires systematic analysis and hard, rigorous work
today. The specific job of entrepreneurship is to make todays business
capable of making the future, of making itself into a different business.
6. Entrepreneurship Provides an Opportunity to Make a Difference and Create
Your Own Destiny: Increasingly, entrepreneurs are starting businesses
because they see an opportunity to make difference in a cause that is
important to them. Entrepreneurs are finding ways to combine their concerns
for social issues ad their desire to earn a good living. Owning a business

provides entrepreneurs the independence and the opportunity to achieve

what is important to them.
7. Entrepreneurship Serve Small Markets With New Technology: Large firms,
with their crippling overheads, do not find it profitable to serve small
populations. This is where small entrepreneurial firms serve an invaluable
role by providing specialized products to niche customers. Entrepreneurial
firms are usually faster to come to the market with radical new technologies.
Ultimately, this will lead to a better standard of living for the whole society.
8. Entrepreneurship Provides Opportunity to Reach Your Full Potential and
Reap Impressive Profit: Too many people find their work boring,
unchallenging and unexciting, but not entrepreneurs. To them, there is little
difference between work and play; the two are synonymous. Entrepreneurs
businesses become their instruments for self expression and self
actualization. They know that the only boundaries on their success are those
imposed by their own creativity, enthusiasm and vision. Most entrepreneurs
never become super-rich: but many of them do become quite wealthy.
9. Other Areas:
Improvement of the standard of living of different weaker sections in

the society.
Bring socio political change in the society.
Develop technological know-how.
Improve culture of business and expand commercial activities.
Develop a culture of achievement orientation.

b. Explain the importance and significance of growth of entrepreneur activities.

1. Development of managerial capabilities: The biggest significance of

entrepreneurship lies in the fact that it helps in identifying and developing
managerial capabilities of entrepreneurs. An entrepreneur studies a problem,
identifies its alternatives, compares the alternatives in terms of cost and
benefits implications, and finally chooses the best alternative. This exercise
helps in sharpening the decision making skills of an entrepreneur.
2. Creation of Organisations: Entrepreneurship results into creation of
organizations when entrepreneurs assemble and coordinate physical, human
and financial resources and direct them towards achievement of objectives
through managerial skills.
3. Improving Standards of Living: By creating productive organizations,
entrepreneurship helps in making a wide variety of goods and services
available to the society which results into higher standards of living for the
people. Possession of luxury cars, computers, mobile phones, rapid growth
of shopping malls, etc. are pointers to the rising living standards of people,
and all this is due to the efforts of entrepreneurs.
4. Means of economic development: Entrepreneurship involves creation and
use of innovative ideas, maximization of output from given resources,
development of managerial skills, etc. and all these factors are so essential
for the economic development of a country.
5. Entrepreneurs create businesses that hire people: This is the top most reasons
why entrepreneurs improve the economy. Their businesses require a number
of employees to help them run the business; from accountants to computer
programmers to human resource staffs all businesses have them.
6. Entrepreneurs pay taxes: The small businesses that the entrepreneurs
established are required to pay necessary local, state, and/or the federal
government taxes. The tax dollars from the businesses will be used by the

government to provide people with basic services such as health care,

transportation, education, construction and so many others.
7. Entrepreneurs introduce new technologies to the market: This is the
disclosive nature or history-making practices of entrepreneurs. They come
up with new technologies, create new products and provide new services.
Steve jobs, the founder of Apple Computers, introduce us to Mac and iPod.
Bill gates founded Microsoft. The works of these two individuals led to the
creation of millions of other software program that we see today
8. Entrepreneurs stimulate the economy by instilling confidence in people: The
economic health of a nation generally depends on its GDP performance.
Entrepreneurs, through the jobs and businesses they create, are vital to the
GDP equation. Having a health economy makes a people confident to invest,
live and work in that place even in times of recession.
9. Industry Structure: Performance, in terms of economic growth, is shaped by
the degree to which the prevalent industry structure efficiently utilizes scarce
resources. The recent technological changes have to led to an industry
structure that is generally shifting towards a bigger role of small firms.
10. New technologies: this factor is related to the changes in industry structure.
Fundamental changes in nature of technological development have led to
diseconomies of scale.
11. Increasing demand for variety: Increased wealth has to the increased in the
demand for variety, which in turn is advantageous to the small firms.

c. What are the qualities of Entrepreneur?

Successful business people have many traits in common with one other. They are
confident and optimistic. They are disciplined self starters. They are open to any
new ideas which cross their path. Here are ten traits of the successful entrepreneur.

1. Disciplined: These individuals are focused on making their businesses

work, and eliminate any hindrances or distractions to their goals. Successful
entrepreneurs are disciplined enough to take steps everyday toward the
achievement of their objectives.
2. Confidence: The entrepreneur does not ask questions about whether they
can succeed or whether they are worthy of success. They are confident with
the knowledge that they will make their business succeed. They exude that
confidence in everything they do.
3. Open minded: Entrepreneurs realize that every event and situation is a
business opportunity. Ideas are constantly being generated about workflows
and efficiency, people skills and potential new businesses. They have the
ability to look at everything around them and focus it towards their goals.
4. Self starter: Entrepreneurs know that if something needs to be done, they
should start it themselves. They set the parameters and make sure that
projects follow that path.
5. Competitive: Many companies are formed because an entrepreneur knows
that they can do a job better than another. They need to win at the sports
they plan and need to win at the businesses that they create. An entrepreneur
will highlight their companys track record of success.
6. Creativity: One facet of creativity is being able to make connections
between seemingly unrelated events and situations. Entrepreneurs often
come up with solutions which are the synthesis of their items. They will
repurpose products to market them to new industries.
7. Determination: Entrepreneurs are not thwarted by their defeats. They look at
defeat as an opportunity for success. They are determined to make all of
their endeavors succeed, so will try and try again until it does. Successful
entrepreneurs do not believe that something cannot be done.

8. Strong people skills: The entrepreneur has strong communication skills to

sell the product and motivate employees. Most successful entrepreneurs
know how to motivate their employees so the business grows overall.
9. Strong work ethic: The successful entrepreneur will often be the first person
to arrive at the office and last one to leave. They will come in on their days
off to make sure that an outcome meets their expectations. Their mind is
constantly on their work, whether they are in or out of the workplace.
10. Passion: Passion is the most important trait of the successful entrepreneur.
They genuinely love their work. They are willing to put in those extra hours
to make the business succeed because there is a joy their business gives
which goes beyond the money. The successful entrepreneur will always be
reading and researching ways to make the business better.

d. What are the characteristics of Entrepreneur?

1. Motivation: Entrepreneurs are enthusiastic, optimistic and future-oriented.
They believe theyll be successful and are willing to risk their risk their
resources in pursuit of profit. They have high energy. And are sometimes
impatient. They are always thinking about their business and how to increase
their market share and are willing to face the challenges.

2. Creativity and Persuasiveness: Successful entrepreneurs have the creative

capacity to recognize and pursue opportunities. They posses strong selling
skills and are both persuasive and persistent. They are willing to promote
their business tirelessly and look for new ways to get the word out about
their product or service.
3. Versatility: Company workers can usually rely on a staff or colleagues to
provide service or support. As an entrepreneur, one can typically start out as
a solopreneur, meaning he/she will be on his/her own for a while. They
may not have the luxury of hiring a support staff initially. Therefore they
will end up wearing several different hats, including secretary bookkeeper
and so on.
4. Superb Business Skills: Entrepreneurs are naturally capable of setting up the
internal systems, procedures and processes necessary to operate a business.
They are focused on cash flow, sales and revenue at all times. Successful
entrepreneurs rely o their business skills, know-how and contacts. They
should evaluate their current talents and professional network.
5. Innovative: entrepreneurs should undertake innovative ways to produce
goods to satisfy customers, changing demand for products.
6. Flexibility and open-mindedness: While entrepreneurs need a steadfast
vision and direction, they will face a lot of unknowns. They will need to be
ready to take any initial plans and strategies. They need to be open-minded
and flexible in the face of change.
7. Vision: One of the entrepreneurs responsibilities as founder and head of
their company is deciding where their business should go. That requires
vision. Without it, their boat will be lost at sea. They should always looks
ahead and see the big picture.
8. Decisiveness: As an entrepreneur, they wont have room for procrastination
or indecision. Not only will these traits stall progress, but they can also

cause them to miss crucial opportunities that could move them towards
success. They should make decisions quickly and seize the moment.
9. Hard work: Hard work distinguishes a successful entrepreneur from others.
Successful entrepreneurs work very hard especially in the beginning and the
same becomes their whole life.
10. Highly optimistic: The successful entrepreneurs are not affected by the
current problems faced by them. They are optimistic for the future that the
situation will become suitable in the business. They can run their enterprise
successfully in the future.
11. Independence: Entrepreneurs do not like to be guided by others and to
follow their routine. They like to be independent in their business.
12. Foresight: The entrepreneurs a good foresight to know how about the future
business environment. They can visualize the likely changes to take place in
the market, consumer attitude, technological developments, etc. and take
timely actions accordingly.
13. Good organizer: An entrepreneur should have the ability to bring together
all the resources required to start an enterprise and produce goods.

Chapter: 2
THEORIES OF ENTREPRENEURSHIP
SHORT NOTES:
a. Achievement Theory of McClelland.
According to McClelland the characteristics to entrepreneur has two features- first
doing things in a new and a better way and second decision making under
uncertainty. McClelland emphasizes achievement orientation as most important

factor for entrepreneurs. Individuals with high achievement orientation are not
influenced by considerations of money or any other external incentives.
Professor David McClelland, in his book The Achieving Society, has propounded a
theory based on his research that entrepreneurship ultimately depends on
motivation. It is the need for achievement (N-Ach), the sense of doing and getting
things done, that promote entrepreneurship. According to him a person acquires
three types of needs as a result of ones life experience. These three needs are:
Need for Achievement: A drive to excel, advance and grow.
Need for Power: A drive to dominate or influence others and situations.
Need for Affiliation: A drive for friendly and close inter-personal
relationships.
McClelland found that certain societies tended to produce a large percentage of
people with high achievement. There are five major components to the n-ach trait:

Responsibility for problem solving

Setting goals
Reaching goals through ones own effort
The need for and use of feedback, and
A preference for moderate levels of risk-taking.

The specific characteristics or a high achiever can be summarized as follows:

i.
ii.
iii.

They set moderate realistic and attainable goals for them.

They take calculated risks.
They prefer situations wherein they can take personal responsibility for

iv.
v.

solving problems.
They concrete feedback on how well they are doing.
Their need for achievement exist not merely for the sake of economic
rewards or social recognition rather personal accomplishment is intrinsically
more satisfying to them.

According to McClelland, motivation, abilities and congenial environment, all

combine to promote entrepreneurship. Since entrepreneurial motivation abilities
are long run sociological issues; he opined it is better to make political, social and
economic environments congenial for the growth of entrepreneurship in
underdeveloped and developing countries.

b .Innovation theory of Schumpeter

A dynamic theory of entrepreneurship was first advocated by Schumpeter who
considered entrepreneurship as the catalyst that disrupts the stationery circular flow
of the economy and thereby initiates and sustains the process of development.
Schumpeter introduced a concept of innovation as key factor in entrepreneurship in
adding to assuming risks and organizing factor of production. Schumpeter defines
entrepreneurship as a a creative activity. An innovator who brings new products
or services into economy is given the status of an entrepreneur. The concept of
innovation and its corollary development embraces five functions:
The introduction of a new product with which consumers are not yet
familiar or introduction of a new quality of an existing product.

 The introduction of new method of production that is not yet tested by

experience in the branch of manufacture concerned, which need by no
means be founded upon a discovery scientifically new and can also exist in
a new way of handling a commodity commercially.
The opening of new market that is a market on to which the particular
branch of manufacturer of the country in question has not previously
entered, whether or not this market has existed before.
Conquest of a new source of supply of raw material and v The carrying out
of the new organization of any industry.
Schumpeter is the first major theorist to put the human agent at the centre of the
process of economic development. He is very explicit about the economic function
of the entrepreneur. An inventor discovers new methods and new materials.
Wilken had added the concept of the changes that an entrepreneur brings:
Expansion of goods, products
Productivity of factors of production such as finance, labour, material.
Innovation in production such as, technology, process changes and
increase in human resource productivity.
Innovation in marketing area such as the composition of the market, size of
the markets and new markets.
It can be noted that this theory main figure, the innovating entrepreneur has
played an important role in the rise of modem capitalism. The entrepreneur has
been the prime mover for economic development process. On the criticism side,
this theory seems one-sided as its puts too much emphasis on innovative functions.
It ignores the risk taking and organizing aspects of entrepreneurship. An
entrepreneur has not only to innovate but also assemble the resources and put them
to optimum use.

In spite of these lacking, the theory supports the enterprising spirit of

entrepreneur to innovate. It is the act that endows resources with a new capacity to
create wealth. Drucker says, Innovation, indeed, creates a resource. It endows it
with economic value. Schumpeters views are particularly relevant to developing
countries where innovations need to be encouraged. The transformation of an
agrarian economy into an industrial economy required a great deal of initiative and
changes on the part of businessmen and managers.

Chapter: 3
EXTERNAL INFLUENCES ON ENTREPRENEURSHIP DEVELOPMENT
BRIEF QUESTIONS:
Discuss the external influences on entrepreneurship development.
1. Economic Factors: From the economic point of view, it can be said that the
same factors which promote economic development account for the
emergence of entrepreneurship also. Some of these factors are as follow:
Capital- Capital in finance and accounting, refers to the funds
provided by lenders to businesses to purchase real capital equipment
for producing goods/services. E.g. shovels for gravediggers, sewing
machines for tailors etc.

 Labour- The quality rather quantity of labour is another factor which

influences the emergence of entrepreneurship. It is observed that
cheap labour is often less mobile or immobile.
Raw materials- Raw material is the basic material from which a
product is manufactured or made, frequently used with an extended
meaning. For example, the term is used to donate material that came
from nature and is in unprocessed or minimally processed state.
Markets- The potential of the market constitutes the major
determinant of probable rewards from entrepreneurial function. The
size and composition of market both influence entrepreneurship.
The survival and success of each and every business enterprise depend fully on its
economic environment.
The main factors that affect the economic environment are:
a) Economic conditions: The economic conditions of a nation refer to a set of
economic factors that have great influence on business organizations and
their operations. All these help in improving the pace of economic growth.
b) Economic policies: All business activities and operations are directly
influenced by the economic policies framed by the government from time to
time.
c) Industrial policy: The industrial policy of the government covers all those
principles, policies, rules, regulations and procedures, which direct and
control the industrial enterprises of the country and shape the pattern of
industrial development.
d) Fiscal policy: It includes government policy in respect of public expenditure,
taxation and public debt.
e) Monetary policy: It includes all those activities and interventions that aim at
smooth supply of credit to the business and a boost to trade and industry.

f) Foreign Investment Policy: It includes all those activities and interventions

that aim at smooth supply of credit to the business and boost to trade and
industry.
2 .Political Factors- Political stability in an economy is booster of entrepreneurial
activities and lead to the development of entrepreneurial climate in that economy.
Further, ideology of the political party also influences business and related
activities to a great extent.
3 .SocioCultural Factors- Development of entrepreneurship in a society may take
place not just because of better economic factors but because of the presence of
positive social factors. The following social factors influence the development of
entrepreneurship in a society.
a) Social norms and values: a society sets certain norms and values for
the behavior of people who are part of that society. As a result, many
people are forced to accept certain types of jobs and tasks that reflect
the social environment.
b) Role models: Societies that celebrate entrepreneurship and felicitate
successful entrepreneurs in a way encourage many future generations
to take up entrepreneurial activities.
c) Respect and status: If societies accord recognition and respect to
people who dare to do something different and creative, it proves to be
an encouragement for others to do something enterprising.
d) Family background: This factor includes size of the family, type of the
family and economic status of family. Background of a family in
manufacturing provided a source of industrial entrepreneurship.
4 .Personal influences- McClelland assumes that achievement motivation is the
immediate cause of the origin of entrepreneurship. He explained entrepreneurial

growth in terms of need for achievement motivation. Thus he found correlation

between need for achievement and successful economic activities.

SHORT NOTES:
Entrepreneurial culture
Culture is a hot buzzword among corporate and entrepreneurial companies alike.
Its what everyone is striving for, what brings on the loyalty, what attracts and
keeps the really awesome employees.
If done right, it seems so simple. But alas, theres the rub, and at once the
wonderful twist: Corporate culture cannot, does not and never will exist just
because.
This is especially true for entrepreneurial companies, where whats going on is the
building of a business as well as culture. Corporate culture must be led, nurtured,
constantly monitored and adjusted. Much like a culture in a petri dish, it requires
that you combine the right ingredients, in the right way, to ensure that what you
grow is not an aberration of your intentions.
Role of entrepreneurship culture is follows:

 Treat people with respect. This is very simple premise, which threads
through each and every complicated issue that can arise within a company.
Respect and trust provide the necessary base for a vibrant and sustainable
corporate culture.
Help employees stay healthy. When employees get sick, they miss work, so
it makes sense to offer health insurance as a benefit. We covered 100% of
employee health plans. I never want an employee to experience a
catastrophic illness and not be covered by insurance. You may also want to
add a wellness allowance for health-club membership.
Open doors to communication. Create an environment where people can
interact with each other, support each other and recognize each others
efforts and achievements. Provide positive rewards for positive behavior.
Share information so that employees are aware of the direction of the
company and are involved in it.
Use all-hands meetings for financial and operational information, teambuilding and social events. Offer incentive programs to reward effort and
improve quality of life.
Build camaraderie. Make time for people to get to know each other and the
company. We held an annual off-site meeting to build team spirit and discuss
where the company was going. At such events you can also distribute and
share your business plan and discuss issues and ideas raised by your
strategies.

Chapter: 4
TYPES AND CLASSIFICATION OF ENTREPRENEURS
BRIEF QUESTIONS:
Explain the Types and Classification of Entrepreneurs.
The term entrepreneur is defined as one who detects and evaluates anew situation
in his environment and directs the making of such adjustments in the economic
system as he deems necessary.
There are different types of entrepreneurs classified as per the nature of business
and their skills:
1. On the basis of business
Business Entrepreneurs- Individuals who conceive the idea of product
or service into reality are business entrepreneurs. They undertake
production as well as marketing resources in their search to develop a
new business opportunity.
Trading Entrepreneurs- These entrepreneurs undertake the trading
activities and are not concerned with the manufacturing work. They
undertake trading activities under national as well as international
level.

 Industrial Entrepreneurs- These entrepreneurs identifies the need of

the product in the market and fulfills the need as per requirement.
They undertake unit such as textiles, electronic industry, machine
tools.
Corporate Entrepreneurs- Corporate Entrepreneurs is a person who
uses his innovative skills in managing corporate undertakings. He
plans, develops and manages corporate body.
Agriculture Entrepreneur- They are persons those who undertake
agricultural activities. They are motivated to raise the productivity of
agriculture through mechanization, irrigation and use of technology.
2. On the basis of Ownership
Private entrepreneur- They are persons who start business using their
creative ideas and they bear risk of what happens to the business.
They help to solve the economic and social problems.
Public entrepreneur- In the underdeveloped countries, government
takes the initiative to share the enterprises.
3. On the basis of Enterprise
Small scale entrepreneur- They are mainly found in underdeveloped
countries. They do not possess necessary talents and skills to initiate
the large scale production.
Large scale production- It is mainly found in developed countries.
They possess the financial and required skills to undertake business in
large scale.
4. On the basis of Motivation
Pure entrepreneur- An individual who is motivated by psychological
and economic or monetary rewards is a pure entrepreneur.
Induced entrepreneur- Induced entrepreneur is one who is induced to
take up an entrepreneurial task due to the policy measures of the
government.

 Motivated entrepreneur- They are motivated by the desire of selffulfillment. They come into business because of the possibility of the
marketing.
5. On the basis of the use of technology
Technical entrepreneur- Technical entrepreneurs are the persons who
concentrate on production than on marketing.
Non-technical entrepreneur- Non-technical entrepreneurs are those
who are not concerned with technical aspects of the product.
Professional entrepreneur- This is a person who is interested in
establishing business but is not interested in managing or operating it
once it gets established.
6. On the basis of growth
Growth entrepreneur- These entrepreneurs take a high growth
industry.
Super-growth entrepreneur- These entrepreneurs have shown high
growth of performance in their venture.
7. On the basis of stage of development
First generation entrepreneur- This type of entrepreneur starts an
industrial unit by his innovative skills.
Modern entrepreneur- These entrepreneurs take venture that will go
well along with the changing demand in the market.
Classical entrepreneur- These entrepreneurs are concerned with the
customers and marketing needs through development of selfsupporting ventures.
8. On the basis of Clarence Danhof
Innovative entrepreneur- Innovative entrepreneurs are ones who
assembles information and introduces a new product.
Imitative entrepreneur- They are also called as adoptive entrepreneur.
Fabian entrepreneur- These entrepreneurs are timid and cautious.
Drone entrepreneur- This type of entrepreneurs have entrepreneurial
activity restricted to just one or two innovations.

9. On the basis of Aruther H.Cole

Empirical entrepreneur- These entrepreneurs follows the rule of
thumb and hardly introduces anything revolutionary.
Rational entrepreneur- They are well informed about the general
economic conditions and introduces the changes that looks
revolutionary.
Cognitive entrepreneur- They are well informed, draws upon the
advice and services of experts and introduces changes that reflect
complete break from the existing scheme of enterprise.
10.On the basis of Area
Urban Entrepreneur
Rural Entrepreneur

Explain/Enumerate the Qualities/Characteristics of an Intrapreneur.

Intrapreneurs are the people who think and act like entrepreneurs while working
for a large organization. They take the initiative, often on their own, to create new
products, processes, policies and services for their organization, while still abiding
by its mission, values and objectives.

Pinchot (1984) defined intrapreneurs as dreamers who do. Those who take handson responsibility for creating innovation of any kind, within a business
Characteristics/Qualities of an Intrapreneur
i.

Vision: Intrapreneurs possess the ability to visualize the steps from ideas to
actualization. They ride to the discovery of successful ventures on this

ii.

strength of their vision.

Motivation: Intrapreneurs want freedom. They are self-motivated but
respond to corporate rewards and recognition. Money is not an incentive for

iii.

their efforts but the measures of their success.

Skills: Intrapreneurs understand the business very intimately. They have
technology, marketing, or services background and in role of Intrapreneurs,

iv.

they take the responsibility of all aspects of the business.

Action oriented: Intrapreneurs by nature are action oriented. Instead of being
entangled in the organizational planning, they do things to realize their

v.
vi.

dreams. They look for incremental achievement.

Control system: Intrapreneurs generally dislike the controlling system but
they learn to cope up with them and later to manipulate with it.
Risk taking: Intrapreneurs are moderate risk takers. They dislike
uncontrolled risk and avoid it as far as possible. Because of their selfconfidence, they are willing to accept that risk which depends entirely on
their skill. Corporates cannot afford to have Intrapreneurs who are wild risk

vii.

takers.
Failures and mistakes: Intrapreneurs are sensitive to the need to appear
orderly in the organization. They will attempt to hide risky projects or ideas
from the public view and to ensure to learn from mistakes without political
cost of public failure. They will quickly adjust and develop a
multidisciplinary team within the organization.

viii.
ix.

Status: Intrapreneurs mundane work that is part of every new project.

Instead of delegation, they often do things faster by themselves.
Goal settings: Intrapreneurs are self-determined goal setters who will often
take the initiative to do things that no one asked them to do.

SHORT NOTES:
Women Entrepreneurship
Women entrepreneurship is the process where women organize a business or
industry and provide employment opportunities to others. Women entrepreneurs
can engaged in both unorganized and organized sectors.

In India only 8 percent of the small scale-manufacturing units are run exclusively
by women entrepreneurs which is proportionately very small as compared to others
developed and developing countries. In USA about 50 percent of the business is
owned by women.
Entrepreneurship development of women through SHG
Strength and weakness, both are the different sides of the same coin. Hence, all
involved group members of SHG must realize that they all work with their own
individual strengths and weaknesses. No one should be blamed for one weakness
i.e. all SHG members are equally responsible for success and failure of their
entrepreneur. The group provides a platform to women for income generation with
co-operative and mutual helping attitude.
SELF-HELP GROUP
The definition of SHG as approved by NABARD the apex banking body in India,
is An SHG is a small, economically homogenous affinity group of rural poor
voluntarily formed to save and mutually agree to contribute common fund to be
lent to its members as per group decision for their socio-economic development.
Group itself becomes a base to convey necessities and sort out social economical
problems of their group members. Main aim SHG is to make group members self
sufficient and self reliant by self-empowerment through group dynamics.
Principle of SHG
Unity is Strength
Self-help group is a best way to get strengthen. Ex:- A single wooden piece can be
easily broken, but a bundle of 15-20wooden pieces cant be broken easily. As like

this a group of people can easily sort out any of the problem, because group
decisions carry more weightage than individual decision.
Characteristics of an ideal SHG
1. An ideal SHG compromises 15-20 members.
2. All the members should belong to the same socio-economic strata of society.
3. Rotational leadership should be encouraged for the distribution of power and
to provide leadership opportunities to all the members.
4. The procedure of decision-making in SHG should democratic in nature.
5. The group frames rules and regulations, which are required in its effective
functioning.
6. Transparency in account keeping and accounts should be maintained and
updated regularly.
7. An SHG should be socially viable institution.

Problems faced by Women Entrepreneur

1. Problem of finance- Finance is regarded as a life-blood of any
oragnisation. There are two reasons why women suffer from shortage of
finance:
a) Women generally do not own any property which they can use as
collateral for obtaining funds from the external sources.
b) The banks also consider women less credit worthy and discourage
them on the belief that they can leave the business any time.

2. Shortage of raw materials- Shortage of raw materials lead to closure of the

business. There were problems of high price and difficulty of getting raw
materials at a discount.
3. Competition- Due to shortage of finance women entrepreneurs are not in a
position to advertise their products. They have to face competition to market
their products which results mostly in the liquidation of the enterprise.
4. Limited Mobility- officials humiliating attitude towards women
entrepreneurs and cumbersome struggle to start an enterprise leads to giving
up on the idea of starting a business.
5. Family ties: In India, its the women who looks after her family. She has to
strika a balance between the family and business. Her total involvement in
family leaves no energy and time to devote for business. Support and
approval of the family members also is necessary to enter into a business.
6. Lack of education: Illiteracy is the root cause of socio-economic problems.
In India 60% of the women are illiterate. Due to lack of education, they are
not aware of business, technology and market knowledge. It results in low
morale in them.
7. Male dominated society: In some parts of India, even today women are
looked as weak in all respect. They are not treated as equal to men. They
suffer from male reservations about womens role, ability, capacity and are
treated accordingly.
8. Low risk bearing ability: In India most womens are less educated and
economically not self dependent. This leads to inability to take risk in the
business, as risk bearing is an important requisite of a successful
entrepreneur. Apart from this inadequate infrastructure, shortage of power,
high cost of production, social attitude, low need for achievement, socio
economic constraints etc hold them back from starting a business.
9. Emotional in business decisions: Women are more emotional by nature.
Hence, their business decisions are flavored by emotions. Thus the

objectivity which is required in business decisions is missing, leading to

business failures or unwanted complications.
10.Limited understanding of legal issues: very few women have group of the
legal issues. Their understanding on legal matters is limited due to lack of
interest as they are often pre-occupied with household or educational
activities.

Examples of successful Women Entrepreneurs

1. Suchi Mukherjee: Suchi is the founder and CEO of the online social
discovery platform for women, LimeRoad. She is extremely about building
consumer technology products. With LimeRoad, she has an aim of
revolutionizing the way lifestyle products are discovered and bought by
people online in India. Before founding LimeRoad.com Suchi have worked
with companies like Skype, Gumtree, eBay and Virgin Media.
Suchi post graduated from London School of Economics and graduated from
St. Stephens College, Delhi. In his life Suchi received many awards and
recognition like K.C. Nag Economics Prize for best student in Economics,
George K. George Memorial Scholarship for overall contribution, all at St.
Stephens College, Delhi Scholarship for merit, both at Cambridge

University and British Chevening Scholarship, at the London School of

Economics.
2. Ajaita Shah: Ajaita is the Frointer Markets started in 2009 by focusing on
energy products and connecting with a microfinance partner in Karnataka.
She has a goal of making high quality, affordable products and goods
available to rural India. She has an experience of over 5 years in
microfinance with esteemed organizations like Ujjivan financial services and
SKS Microfinance behind her back.
Ajaita was also awarded with the title of being the most influential leader
under 30 in microfinance by Business week, and Business Weeks 30 under
30 award, and most recently, Forbes Magazines top 30 under 30s Social
Entrepreneur of the year.
3. Gloria Benny: Gloria is the co-founder of Make A Difference, which is
considered one of Indias largest volunteer networks. India is country with
most difficult Gloria is determined to take this problem head on. She has an
aim of inspiring about 360 million people in giving at least 1 hour per week
in helping underprivileged children across India. In 2013, the organization
had around 1,300 volunteers teaching and mentoring about 5,400 orphaned
and underprivileged kids in across 20 cities of India.
Gloria was born in Kochi, Kerala a southern most state in India and lived for
a few year in the gulf as well, where she completed her High School
education. After graduation she even worked with Google for 5 years. She
then in 2006 started her social venture MAD with help of 20 second year
college students in Kochi to teach communicative English to 100 poor
students.
4. Sapna Chouhan: Sapna is the founder and head of THE READING TREE
PRE-PRIMARY SCHOOL, which is accredited with International School
Award 2012-2015 by the British Council. The number of students is approx.

200 in the age group of 2-6 years. She has conducted various workshops on
Internet and Aptitude test for students of STD IX and X, WROKSHOPS on
Parenting, Play and Dance Therapy, Art therapy, Brain Gym, handwriting,
etc. She has been awarded with series of awards such as:
2015-2018 British Council, International School Award
2012-2015 British Council, International School Award
2013
AIESAC, New Delhi
2014
Sevachakra Puraskar for outstanding achievements and social
responsibilities.

Chapter: 4
ENTREPRENEUR PROJECT DEVELOPMENT & BUSINESS PLAN
BRIEF QUESTIONS:
Explain the concept of Innovation.
The process of translating an idea or invention in to a good or service that creates
value or for which customers will pay. To be called an innovation, an idea must be
replicable at an economical cost and must satisfy a specific need. Innovation
involves deliberate application of information, imagination and initiative in
deriving greater or different values from resources, and includes all processes by
which new ideas are generated and converted into useful products. In a social
context, innovation helps create new methods for alliance creation, joint venturing,
flexible work hours, and creation of buyers purchasing power.
Innovations are divided into two broad categories-

1. Evolutionary innovations that are brought about by many incremental advances

in technology or processes and
2. Revolutionary innovations which are often disruptive and new.
Innovation is synonymous with risk-taking and organizations that create
revolutionary products or technologies take on the greatest risk because they create
new markets.
Imitators take less risk because they will start with an innovators product and take
a more effective approach. Examples are IBM with its PC against Apple Computer,
Compaq with its cheaper PCs against IBM, and Dell with its still-cheaper clones
against Compaq.
In business and economics, innovation is the catalyst to growth. With rapid
advancements in transportation and communications over the past few decades, the
old world concepts of factor endowments and comparative advantage which
focused on an areas unique inputs are outmoded for todays global economy.
Economist Joseph Schumpeter, famously asserted that creative destruction is the
essential fact about capitalism. In addition, entrepreneurs continuously look for
better ways to satisfy their consumer base with improved quality, durability,
service, and price which come to fruition in innovation with advanced technologies
and organizational strategies. In the organizational context, innovation may be
linked to positive changes in efficiency, productivity quality, competitiveness, and
market share. However, recent research findings highlight the complementary role
of organizational culture in enabling organizations to translate innovative activity
into tangible performance by providing work groups opportunities and resources to
innovative, in addition to employees core job tasks. Peter Drucker wrote that
Innovation is the specific function of entrepreneurship, whether in an existing

business, a public service institution, or a new venture started by a lone individual

in the family kitchen. It is the means by which the entrepreneur either creates new
wealth-producing resources or endows existing resources with enhanced potential
for creating wealth.

Explain business idea/plan.

Within the overall outline of the business plan, the executive summary will follow
the title page. The summary should tell the reader what you want. This is very
important. All too often, what the business owner desires is buried on page eight.
Clearly state what you are asking for in the summary. The statement should be kept
short and businesslike, probably no more than half page. Within that space, youll
need to provide a synopsis of your entire business plan.
Key elements that should be included are
1. Business concept. Describes the business, its product and the market it will
serve. It should point out just exactly what will be sold, to whom and why the
business will hold a competitive advantage.
2. Financial features. Highlights the important financial points of the business
including sales, profits, cash flows and return on investment.

3. Financial requirements. Clearly states the capital needed to start the business and
to expand.
4. Current business position. Furnishes relevant information about the company, its
legal form of operation, when it was formed, the principal owners and key
personnel.
5. Major achievements. Details any developments within the company that are
essential to the success of the business. major achievements include items like
patents, prototypes, location of a facility, any crucial contracts that need to be in a
place for product development, or results from any test marketing that has been
conducted.
SHORT NOTES:
Invention
An invention is a novel or unique device, method, composition or process. The
invention process is a process within an overall engineering and product
development process. It may be an improvement upon a machine or a product, or a
new process for creating a object or a result. An invention that achieves a
completely unique function or result may be a radical breakthrough. Such works
are novel and not obvious to others skilled in the same field. An inventor may be
taking a big step in success or failure.
Some inventions can be patented. A patent legally protects the intellectual property
rights of the inventor and legally recognizes that a claimed invention is actually an
invention. The rules and requirements for patenting an invention vary from country
to country, and the process of obtaining a patent its often expensive.

Another meaning of invention is cultural invention, which is an innovative set of

useful social behaviors adopted by people and passed on to others. The institute for
social inventions collected many such ideas in magazines and books. Invention is
also an important component of artistic and design creativity. Inventions often
extend the boundaries of human knowledge, experience or capability.

Creativity
Creativity is a phenomenon whereby something new and somehow valuable is
formed the created item may be intangible or an original physical object.
Scholarly interest in creativity involves many definitions and concepts pertaining
to a number of disciplines: psychology, cognitive science, education, philosophy,
technology, theology, sociology, business studies, song writing, and economics,
covering the relations between creativity and general intelligence, mental and
neurological processes, personality type and creative ability, creativity and mental
health; the potential for fostering creativity through education and training,
especially as augmented by technology; and the application of creative resources to
improve the effectiveness of teaching and learning.

SWOT Analysis
A SWOT analysis is a structured planning method used to evaluate the strengths,
weaknesses, opportunities and threats involved in a project or in a project or in a
business venture or project and identifying the internal and external factors that are
favorable and unfavorable to achieve that objective. Some authors credit SWOT to
Albert Humphery, who led convention at the Stanford Research Institute in the
1960s and 1970s using data from Fortune 500 companies
1. Strengths: Characteristics of the business or project that give it an advantage
over others.
2. Weaknesses: Characteristics that place the business or project
at a disadvantage relative to others.
3. Opportunities: Elements that the project could exploit to its
advantage.

4. Threats: Elements in the environment that could cause trouble

for the business or project.