Download - Entrepreneurship Management BMS
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Entrepreneurship and Management of Small & Medium Enterprise
TYBMS
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Paper PatternSection I
◦Concepts (3*5- 15 marks)◦Case study (15 marks)
Section II◦Any three 10 marks each (with or
without internal options)
*Reference book: Entrepreneurship and Management of Small & Medium Enterprise by Sunny Fernandes
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What is Entrepreneurship?Capacity to take risks
Ability to own and organize
Desire and capability to INNOVATE and diversify
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Who is an Entrepreneur?A person who organizes and
manages a business undertaking, assuming the risk for the sake of profit.
Any person who starts and operates a business is an entrepreneur.
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Definitions of EntrepreneurJ.B. Say
◦ An Entrepreneur is one who brings together the factors of production and combines them into a product.
E.E. Hagen◦ An entrepreneur is an economic man who
tries to maximize his profits by innovations. Innovations involve problem-solving and gets satisfaction from using his capabilities in attacking problems.
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Concept of Entrepreneurship
ENTREPRENEUR
OBJECTPROCESS OF
ACTIONPERSON
ENTREPRENEURSHIP ENTERPRISE
An Individual Collection of Activities
Result of the efforts of an
Entrepreneur. Creates an enterprise
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Definitions of Entrepreneurship Joseph Schumpter:
◦ Entrepreneurship as defined essentially consists in doing things that are not generally done in the ordinary course of business routine.
Peter Drucker:◦ Entrepreneurship occurs when resources are
redirected to progressive opportunities not used to ensure administrative efficiency. He further states that entrepreneurship is not natural; it is not creative. It is work. Entrepreneurship requires entrepreneurial management.
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Characteristics of a successful Entrepreneur
CreativityInnovationInterpersonal skillsLeadershipTeam BuildingAchievement, MotivationProblem SolvingGoal OrientationRisk taking and decision making abilityPositive Self Concept
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Continued…CommitmentLocus of controlSelf confidenceAbility to mobilize resourcesMental abilityBusiness PlanningBusiness secrecyHuman Relations AbilityTechnical Knowledge
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CLASSIFICATION AND TYPES OF
ENTREPRENEURS
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Classification Based on Functional Characteristics
Based on Type of Business
Based on Use of Technology
Based on Motivation
Based on Growth
Based on Stages of Development
Based on Area
Based on Gender
Based on Role of Operation
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Functional CharacteristicsInnovative Entrepreneur
Imitative Entrepreneur
Fabian Entrepreneur
Drone Entrepreneur
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Type of Business
Business Entrepreneurs: Printing house, Garments, etc
Trading Entrepreneurs: Export- Import
Industrial Entrepreneurs : Electronics , Machine tools, etc
Corporate Entrepreneurs: Eg: Ambani
Agricultural Entrepreneurs: Dairy, Plantation, etc
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Use of Technology
Technical Entrepreneurs
Non- Technical Entrepreneurs
Professional Entrepreneurs
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Motivation
Pure Entrepreneurs: Psychological and economic rewards
Induced Entrepreneurs: Incentives, Concessions
Motivated Entrepreneurs: Profit and innovation
Spontaneous Entrepreneurs: Confidence
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Growth
Growth Entrepreneurs: high growth industry
Super- Growth Entrepreneurs: growth performance is shown by liquidity of funds and profitability
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Stages of Development
First Generation Entrepreneurs
Modern Entrepreneurs
Classical Entrepreneurs
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Others Based on Area
◦ Urban Entrepreneurs◦ Rural Entrepreneurs
Based on Gender and Age◦ Men Entrepreneurs◦ Women Entrepreneurs
Based on Role of Operation◦ Small Scale Entrepreneurs◦ Large Scale Entrepreneurs
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Intrapreneurship
Making Big Companies More Entrepreneurial
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Introduction The term ‘Intrapreneur’ was coined in USA in late
seventies.
It is a creation of a system which will provide selected executives a status within the organization similar to that of an entrepreneur in the society.
Intrapreneur is defined as ‘any of the dreamers who do’.
Intrapreneurship involves the development of independent units designed to create a market, and expand innovative services, technologies or methods within the organization.
Some companies who promote intrapreneurial activities are General Motors, IBM, Dupont ,etc.
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Characteristics of Intrapreneur
Intrapreneur
Creates New
VenturesInnovates Products/ Services
Innovates Processes
Proactive
Risk Taking
Renews Organizati
on
Competitively
aggressive
Self Motivated
Self Confident
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Elements of Intrapreneurial Environment Organization operates on frontiers of technology Trial and Error Encouraged No opportunity parameters Resources available and accessible Multi discipline team work approach Long time horizon Volunteer Program Appropriate Reward System Sponsors available Support of top Management
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Difference between Entrepreneur and Intrapreneur
Entrepreneur Owner and operator of the
business. High Risk .
Primary motive is independence, opportunity to create, and make money.
Serves oneself and customers.
Personal Capital Investment
Owns the rewards
Generally a small enterprise set up
Intrapreneur Only operator of the business not
owner.
Moderate Risk.
Primary motive is independence, and ability to advance in the organization, and rewards.
Serves oneself, organization and customers.
Financial support from organization
May get increment, or reward but does not own the rewards
Big enterprise or a new unit of a big company
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WOMEN ENTREPRENEURSHIP
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Introduction
They are a woman or group of women who initiate, organize & operate a business enterprise.
According to Marshal, any woman or group of woman who innovates, initiates, or adopts an economic activity may be called a woman entrepreneur.
According to Government of India, it is an enterprise owned & controlled by woman or a woman having a minimum financial interest of 51% of the capital in the enterprise and giving at least 51% of the employment generated in the enterprise to women.
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Factors influencing Women Entrepreneurs
Greater freedom and mobility Establishing their own creativityEstablishing their own identityAchievement of ExcellenceBuilding confidenceDeveloping risk taking abilityMotivationEqual status in society Government SupportEducation
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Features of Women Entrepreneurs ImaginationAttribute to work hardPersistenceAbility and desire to take riskValue of Self fulfillment over moneySense of responsibilityHigh level of optimismTolerance for ambiguityFlexibilityOrganizing capacity
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Reasons for women starting an Enterprise Motivational Factors
◦ Economic necessity
◦ Self Actualization
◦ Independence
◦ Government policies and programmes
◦ Educational Qualification
◦ Self identity and social status
◦ Family occupation
◦ Success stories
◦ Self satisfaction
Facilitating Factors◦ Adequate financial facilities
◦ Innovative thinking
◦ Network of contacts
◦ Cooperation of family
◦ Support of family
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Continued…Push Factors
◦ Desire to do something new in life◦ Need for independence◦ Availability of finance◦ Concessions and subsidies
Pull Factors ◦ Death of husband or father◦ Financial problems◦ Family responsibilities
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Types of Women EntrepreneursChance
Natural
Created
Forced
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Trends Seventh Five year plan suggested the following :
◦ Treat women as specific target groups in all development◦ Increase women’s participation in decision making◦ Provide marketing assistance at the state level◦ Properly diversify vocational training facilities for women
to suit their needs and skills◦ Encourage appropriate technologies, equipments and
practice for reducing their drudgery and increase their efficiency and productivity.
New industrial policy recommends product and process oriented courses for women
Nationalized banks advance loans to women on preferential basis
SIDC provides loans, subsidies and grants to small scale women entrepreneur
National Alliance of Young Entrepreneurs (“NAYE”) assist women
Rural Employment Generation Programme by the Government.
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Problems faced Lack of Independence Family Responsibilities Social Attitude Low Mobility High cost of Production Lack of Education Low need for Achievement Shortage of finance Inefficient Arrangement for Marketing and Data Shortage of Raw Material Stiff Competition Lack of managerial and marketing skills Lack of Technical Know how Low risk bearing capability
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Strategies for the Development of Women EntrepreneursEducation and AwarenessBetter time managementSet up Home based BusinessEfficient use of ITOrganize Workshops and SeminarsGroup EntrepreneurshipSimplified ProceduresDispense Collateral SecurityFinance Cells Training
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Special SchemesSeed Capital SchemeNational Equity FundFinance Corporation SchemePrime Minister’s Employment Guarantee
Scheme, Central Government’s Scheme for Educated Unemployed
Women Industries Fund SchemeSingle Window Scheme Joint Loan SchemeDistrict Industries Centre SchemeTraining and Extension ServicesScheme for Refinance Assistance to Women
Entrepreneurs
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Financial Institutions supporting Women Entrepreneurs
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Development of Women Entrepreneurship through SHG
There are 2,60,000 SHGs in India.
A Self help group is a small, economically homogenous and significant group of rural/urban poor, voluntarily formed to save and mutually agreed to contribute to a common fund to be lent to its members.
It is a collection of 20 members who form a group facilitated by a NGO, MFO or a bank.
It helps women save on daily basis.
These groups may set up micro enterprises.
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Famous Women Entrepreneurs in IndiaNeeta Ambani- Dhirubhai Ambani International
SchoolKiran Mazumdar Shaw- BioconShahnaz Hussain- Shahnaz Herbals IncEkta Kapoor- Balaji TelefilmsNeelam Dhawan- HP IndiaSimone Tata - Lakme Indu Jain- The Times Group Priya Paul- Apeejay Park HotelsVidya Manohar Chhabria- Jumbo GroupSulajja Firodia Motwani – KineticVimalben Pawale- Sri Mahilla Udyog Lijjat Papad
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Theories of Entrepreneurship
Economic Theory
Sociological Theory
Psychological Theory
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Economic TheoryEntrepreneurship and economic growth take
place when the economic conditions are favorable
Economic incentives are the main motivators for entrepreneurial activities
Economic incentives include taxation policy, industrial policy, sources of finance and raw material, infrastructure availability, investment and marketing opportunities, access to information about market conditions, technology etc
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Sociological TheoryEntrepreneurship is likely to get a boost in a
particular social culture.
Society’s values, religious beliefs, customs, taboos influence the behaviour of individuals in a society
The entrepreneur is a role performer
according to the role expectations by the society
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Psychological Theory Entrepreneurship gets a boost when society
has sufficient supply of individuals with necessary psychological characteristics.
The psychological characteristics include need for high achievement, a vision or foresight, ability to face opposition.
These characteristics are formed during the individual’s upbringing which stress on standards of excellence, self reliance and low father dominance.
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McClelland’s Views on Entrepreneurship/ Theory of Achievement Motivation Two Characteristics of Entrepreneurship:
◦ Doing things in a new and better way; and◦ Decision making under uncertainty
Such people are not influenced by money or external incentives
They consider profit to be a measure of success and competency
According to McClelland, a person has three types of needs at any given time, which are: –Need for achievement (get success with one’s own efforts)–Need for power (to dominate, influence others)–Need for affiliation (maintain friendly relations with others)
The need for achievement is the highest for entrepreneurs
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Schumpter’s views on Entrepreneurship/ Entrepreneurship Innvovation TheoryTheory by Joseph Schumpeter who believes that
entrepreneur helps the process of development in an economy
He says that an entrepreneur is the one who is innovative, creative and has a foresight
According to him, innovation occurs when the entrepreneur –Introduces a new product–Introduces a new production method–Opens up a new market–Finds out a new source of raw material supply–Introduces new organisation in any industry
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Continued..The theory emphasizes on innovation,
ignoring the risk taking and organizing abilities of an entrepreneur
Schumpeter’s entrepreneur is a large scale businessman, who is rarely found in developing countries, where entrepreneurs are small scale businessmen who need to imitate rather than innovate
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Hagen’s views on EntrepreneurshipCreative Innovation or changeWithdrawal of Status RespectFour different Personalities arise:
◦ Retreatist : Indifferent◦ Ritualist: Defensive◦ Reformist: Rebel ◦ Innovator: Creative
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Factors affecting Entrepreneurial GrowthEconomic Factors
Social Factors
Psychological Factors
Cultural Factors
Personality Factors
Government
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Economic FactorsCapitalLabourRaw MaterialsMarket
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Social FactorsSocial norms and valuesRole ModelsSocial PressureRespect and StatusSecurity
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Psychological FactorsNeed for AchievementWithdrawal of Status Respect
◦ Retreatist : Indifferent◦ Ritualist: Defensive◦ Reformist: Rebel ◦ Innovator: Creative