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IT Entrepreneurship andSupply chain Management

BIM VII Semester

Chapter 1: Overview of Entrepreneurship

Courseware Introduction to Entrepreneurship Entrepreneurial Decision ProcessRole of Entrepreneurship in Economic

DevelopmentIntrapreneurshipEthics and Social Responsibility of

Entrepreneurship

Overview

ReferencesManagement

Information SystemManaging the digital firm

by: Laudon & LaudonManagement

Information System

by: James O’ Brien

Main Books Entrepreneurship

by: R. D. Hishrich & M. P. Peters

Supply Chain ManagementStrategy, Planing and Operation

by: Sunil Chopra & Peter Meindl

Books to Follow

ITE & SCM| Prepared by BIBHOR BARAL

The lecture slides and other learning contents provided by the teacher are reference materials. The students are encouraged to

study them in detail. These materials can be taken as starting points in the learning

journey.However, these materials should

NOT be taken as the supplementary to the text

book(s). An in-depth study of the text book(s) is mandatory.

What is Entrepreneurship?

Who is an Entrepreneur?

Earliest PeriodMiddle Ages17th Century18th Century19th & 20th Centuries

Nature & Development of Entrepreneurship

Change in Present Life Style Desirability of New Venture Formation Possibility of New Venture Formation

Entrepreneurial Decision Process

Role of Entrepreneurship in Economic Development

Concept and Definitions of Entrepreneur

the word ‘entrepreneur’- taken from French language means an organizer of musical or other entertainments defined as the director or a manager of a public musical

institution Early 16th century: application to military expedition Beginning of 18th century: used in economic aspect various views and ways of use of the word classification of views into three groups

Concept of Entrepreneur (contd.)

a. Risk -Bearer: early 18th century by Richard CantillonRichard Cantillon:

the first person, introduced the term ‘entrepreneur’ as a risk bearer, purchases factors of production at a

certain prices and resell it at an uncertain price as an agent , buys factors of production in order to

combine into a product and sell it in future Merchants, entrepreneurs, buy product at certain price

and sell at uncertain price Entrepreneurs: uncertainty bearer

Concept of Entrepreneur (Contd.)

b. An Organizer: developed by Jean Baptiste Say Jean Baptiste Say: associates entrepreneur with the function of

coordination, organization and supervision efficient and effective organization of factors of

production to operate the business factors of production such as land , labor and capital combination of land, labor and capital by entrepreneur

Concept of Entrepreneur (contd.)

c .As an Innovator: developed by Joseph A. Shumpeter Joseph A. Shumpeter: investigator and founders of new ideas and methods brings dynamic changes into the society with innovation of new

combination of production utilizes investigation and discovery the differences between an inventor and innovator innovator: who utilizes inventions and discoveries inventor: who discovers new methods and materials

Definitions of Entrepreneur

International labour Organization( ILO):“Entrepreneurs are people who have the abilities to see and evaluate business opportunities , together with the necessary resources to take advantage of them, and to ensure appropriate action to ensure success.”David H. Holt:“ An entrepreneur is a person who starts a new venture , taking the imitative and risk associated with it and does so by crating something new to provide value to customers.”

Concept of Entrepreneurship

various views and ways of use of Entrepreneur:as a risk beareras an organizeras an innovator

entrepreneurship is related to:coordination, innovation and performance of the

entrepreneura system of creating new business referred to the various activities ,done for the

establishment and operation of an enterprise

Concept of Entrepreneurship (contd.)

Definitions:A.H. Cole : “Entrepreneurship is the purposeful activity of an individual or a group of associated individuals, undertaken to initiate, maintain or aggrandize profit by production or distribution of economic goods and services”Joseph A. Schumpeter : “ Entrepreneurship is based on purposeful and systematic innovation. It included not only the independent businessman but also company directors and managers who actually carry out innovative functions.”

Concept of Entrepreneurship (Contd.)

Entrepreneurship :- a process, involves various actions, taken by entrepreneur to establish enterprise- a process of giving birth to a new enterprise- involvement of two basic elements; innovation and risk- bearing.Innovation:- does something new and different, seeking to do something different and unique, try to meet the changing requirements of customers

Concept of Entrepreneurship (Contd.)

Risk – Bearing:- involvement of risk in new enterprise- incurrence of profit or loss- various factors effects the profit and loss ie. - increasing competition- changes in customers’ preferences- shortage of raw materialsSo, entrepreneur must be able to assume the risk involved in the enterprise, needs to be a risk taker not an avoider, should have ability of risk bearing .

Role of Entrepreneurship in economic development

Economic Development: increment of per capita income of country increment in living standard of the people of the

country role of entrepreneurship in economic development

varies from economy of the nation depends on available resources, industrial climate and

political system etc. contribution of entrepreneurship to economic

development in different ways.

Role of Entrepreneurship….(contd.)

1. Capital formation:- promotion of capital formation- collection and mobilization of capital- capital, prerequisite for any activities2. Employment opportunities:- generation of employment opportunities- initiation of business- reduction of the problem of unemployment- increase income and living style of people

Role of Entrepreneurship…..(contd.)

3. Balanced regional development:- reduction of regional imbalance (rural – urban migration)- mobility of entrepreneurs- movement of business activities on the basis of availability of recourses and facilities4. Reduce concentration of economic power:- reduction of economic power of a certain group- reduction in exploitation of people as well as other small entrepreneur

Role of Entrepreneurship…..(contd.)

5. Promote foreign trade:- promotion of country’s export trade- production and introduction of new product- supports in revenue collection by exporting the good6. Optimum utilization of resources:- use of available resources - brings the resources together and use and utilization of land , labor and capital

Role of Entrepreneurship…..(cont.)

7.Industrialization:- no. of industries , running in the country- helps to increase economic activities- establishment of industries , consumption of

variety of goods at cheaper price, remove unemployment, high level of income

Meaning of Intrapreneur

Intrapreneur refers to corporate entrepreneur A person , who handles ventures based on innovation should be creative , visionary and flexible Must be able to work within the existing corporate structure

and climate Commitment to intraprenuership is a must Adoption of entrepreneurships for innovation and growth of the

firm salaried employees of the firm work with top level

management.

Intrapreneurship

- a new breed of entrepreneur- emergence of intrapreneur from within an existing enterprise- in organizations, top executives, encouraged to generate new ideas and convert into products through research and development activities- the concept, becoming popular in developed countries like America- intrapreneurs : leaving their jobs and starting own enterprises- many of the, becoming successful in their venture

Intrapreneurship (contd.)

Difference Entrepreneur Intrapreneur1. Dependency independent dependent2. Raising of raises funds funds are not

raise funds3. Risk bears the risk doesn’t fully bear4. Operation operates from within the

outside organization

The entrepreneurial decision process

Deciding to become an entrepreneur by leaving present activity

Difficulty in bringing ideas to the market and create new venture

Formation of millions of ventures despite recession, inflation, high interest rates, lack of infrastructure, economic uncertainty and high probability of failure

Entrepreneurial decision process: entails a movement from something to somethingMovement from a present lifestyle to forming a new

enterprise

entrepreneurial decision process (contd…..)

1. Change from present lifestyle: Decision to leave career or lifestyle: a great deal of

energy and courage to change and do something new and different

Start up business with familiar areas Importance of two working environment:

Research and developmentMarketing

Research and development: working with technology Development of new product ideas and processes


Change the form of company No acceptance of new ideas by the employees

Marketing: Becoming familiar with the market Customers’ unfulfilled needs and want Start up new enterprises to fulfill the needs


Source of leaving present lifestyle to something new: negative force-disruption

Formation of companies: by retired, relocated due to moving and fired from the job

Study in major city in USA: increment of new business by 12 percent, listing in yellow pages

Formation of business, cause of frustration from job (no promotion)

Formation of enterprise by individual as perception of desirable and possible


2. Desirability of New Venture Formation: Aspects of a situation that make it desirable to start a new

company Perception of starting new company as desirable from: Culture, subculture, family, teachers and peers Culture: variability in culture of places creating new business, value on being one’s own boss,

having individual opportunities, being success and making money in one place

No value of establishment of new business and making money in other places

Afraid of disgrace of failure


Desirability of New Venture Formation (contd…..)Subculture: shape value systems operate within a cultural

framework Entrepreneurial subculture widely recognized in US i.e. Route

128(Boston), Silicon Valley (California), North Carolina Triangle, less known entrepreneurial centers i.e. Los Angeles, Denver, Cleveland and Austin.

Support and promote entrepreneurship from subculture to form new company as one of the best occupations

Active plan for new enterprise with supportive environments


Desirability of New Venture Formation (contd…..) Variation in subculture to form business In Silicon Valley, caused by family traits Indication of the studies made in different companies throughout

the world, value of independence of fathers and mothers Giving encouragement and value to company formation Influence and stimulation of teachers to entrepreneurship as

desirable and viable career path Courses in entrepreneurship and innovation develop

entrepreneurs and drive in entrepreneurial environment

entrepreneurial decision process (contd…)

Desirability of New Venture Formation (contd…..)Peer: an entrepreneurial pool and a meeting place

where entrepreneurs and potential entrepreneurs Discussion on ideas, problems, solutions to spawn new

companies important in decision to form a company


Possibility of New Venture Formation(contd……) Importance of education system for business knowledge Question: are entrepreneurs born or develop? Marketing: have crucial role in forming a new company Need of sufficient size of market Need of putting together total package of product, price,

distribution, and promotion for successful venture Role model: powerful influences in marketing company formation Seeing someone else succeed, engagement in similar activity


Possibility of New Venture Formation(contd……)Financial resources: need of financial resources Sources of finance: personal savings, credit, friends,

relatives Need of additional seed capital Essential role of Risk-capital availability in the

development and growth of entrepreneurial activity

Ethics and Social Responsibility of Entrepreneurs

Business ethics: the study of behavior and morals in a business situationNeed to take risks with own capital for different purposes

such asto sell and deliver products by an entrepreneur

expending greater energy to innovate Face daily stressful situation and difficulties Need to balance between ethical exigencies, economic

expediency and social responsibilities Differences at balance depends on moral stance of business

manager

Ethics and Social Responsibility of Entrepreneurs (contd….)

Relation of Manager’s attitude concerning corporate responsibilities to the organizational climate, perceived to be supportive of laws and professional code of conduct

New entrepreneurs with role of model develop an internal ethical code

Determination of ethically appropriate course of action depends on the personal value system of their own

Sensitive to peer pressure, social norms in the community and from the competitors in value system

reflection of norms and values of the communities and countries in value system(U.S. managers-individualistic and less communitarian values then German and Austrian)


Relation between concept of culture and ethics Ethics: Originated from Greek “ethos”, means “custom and

usage”, more originated from “swedhethos”, concern with individual, morality and behavioral habits, identified as essential quality

study of whatever is right and good for humans The broad field of study exploring the general nature of

morals and the specific moral choices to be made by individual in relationship with others

Business ethics: concern with the investigation of business practices in light of human values


Credit by western authors to Greek philosophers Socrates(469-399 B.C.), Plato (427-347 B.C.), and Aristole (384-322 B.C.)as earliest writings upon ethical concepts

Judaism (1800 B.C.) and Hiduism (1500B.C.): findings of earlier writings on moral codes and laws

Classification of business ethics into four types:1. pedagogical oriented inquiry: theory and empirical

studies2. theory-building without empirical testing


3. empirical research, measuring the attitudes and ethical beliefs of students and academic faculty

4. empirical research within business environments, measuring the attitudes and ethical views, within the large organization

Questions & Discussion

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Leadership & Management