Entrepreneurial Management & Entrepreneurs by Prof G. Surender Reddy

1. UNIT I
Entrepreneurial Management
and Entrepreneurs
Prof. G. Surender Reddy
Director, EDC, SNIST

2. Management
• Management is the process of reaching organizational goals
by working with people and other resources. Another
definition could be – knowing what you want people to do,
and then getting them to do it the best way. Managers must
concentrate on reaching organizational goals, and they should
use their resources to accomplish those goals.
• For many years the management process has been divided
into principles, sometimes called functions. The four
functions are: planning, organizing, influencing, and
controlling. Some people use decision making as a fifth
principle, but decision making can be seen as part of the
planning process. Also, some use leading instead of
influencing, but the term influencing is better. These
management principles are universal and applicable to all
types of businesses and organizations.

3. Four Principles of Management
• Planning – determining the organization’s goals and deciding how best to achieve them.
Planning involves choosing tasks that must be performed and how and when they will be
performed. Decision making is also included with planning because it involves selecting
the best course of action to achieve success.
• Organizing - assigning tasks to various individuals or groups; puts plan into action.
People are given work assignments that contribute to achieving the goals. Organizing
involves using your resources appropriately to reach the organization’s goals. Organizing is
the primary way managers activate their plans.
• Influencing – guiding the activities of the organization’s members. Over the years,
influencing has been referred to as motivating, directing, or leading. One way to influence
people is through effective communication.
• Controlling – in the context of management, controlling is making things happen as
planned. Controlling is the continuing process of monitoring the progress being made by
your workers. Managers must make sure that the organization is performing as planned
and will accomplish its goals. Controlling involves gathering information and measuring
performance.

4. MEANING OF ENTREPRENEURSHIP
• Entrepreneurship is the capacity and willingness to
develop, organize and manage a business venture along
with any of its risks in order to make a profit. The most
obvious example of entrepreneurship is the starting of
new businesses.
• Entrepreneurship combined with land, labor, natural
resources and capital can produce profit.
Entrepreneurial spirit is characterized by innovation and
risk-taking, and is an essential part of a nation's ability to
succeed in an ever changing and increasingly
competitive global marketplace.

5. Meaning (Contd.)
• Jean-Baptiste Say, the French economist who is
credited with coining the word Entrepreneur around
1800, defined an entrepreneur thus:
“Entrepreneurs shift economic resources
from an area of lower productivity into an
area of higher productivity and greater
yield.”
• So, entrepreneur is actually from a French word,
whose rough translation is supposed to be
“undertaker” or “adventurer”, and has come to mean
more commonly “one who attempts to profit by
taking risk and initiative.”

6. Meaning (Contd.)
Joseph Schumpeter (1883–1950), an economist, defined an
entrepreneur as one who introduces something new in the
economy:
• A new method of production
• A new or improved product
• New sources of inputs, or
• New markets, and the like.
Management Guru Peter Drucker (1909-2005) took this
idea further, describing the entrepreneur as someone
who actually searches for change, responds to it, and
exploits change as an opportunity.
Resources + Entrepreneur = Results

7. ENTREPRENEURIAL MANAGEMENT
(EM)
Managing a new venture differs from managing an
existing operation along five key management
issues:
• Strategic orientation
• Commitment to opportunity
• Commitment of resources
• Control of resources
• Management structure

8. Vital Management Issues in EM
• What is this venture about? (mission and values
statement)
• Where should it go? (goals and objectives)
• How will it get there? (growth strategy)
• What does it need to get there? (people and
resources)
• What structure is best? (organizational capabilities)
• How much money does it need and when?
(financing strategy)
• How will it recognize the final destination? (vision of
success)

9. ADVANTAGES OF BEING AN
ENTREPRENEUR
• Often people do not feel fully compensated for
the work they do. Becoming an entrepreneur
means you can reap the benefits of all your
hard work.
• Having control over your work schedule
means that you can choose when to take time off
and work the schedule that suits you best.
(Contd.)

10. Advantages (Contd.)
• Entrepreneurs are able to make all of the
decisions relating to their company themselves;
they have complete control. This allows for a
huge degree of independence and a chance
to shape one’s own career.
• Becoming an entrepreneur is a very exciting
time, from the idea and start-up to the
development and realisation of the product or
service.

11. Advantages (Contd.)
The advantages can be said to be:
• Create their own destiny
• Make a difference
• Reach their full potential
• Generate impressive profits
• Contribute to society and be recognized for their
efforts
• Do what they enjoy and have fun at it!

12. DISADVANTAGES OF BEING AN
ENTREPRENEUR
• Becoming an entrepreneur means you have to leave
behind the security of having a paycheck each
month.
• Although entrepreneurs benefit from a flexible
schedule they often have to work very long hours
particularly in the start-up phase. Furthermore
entrepreneurs’ work schedules are never predictable
and they must deal with emergencies that may occur
at any time.
(Contd.)

13. Disadvantages (Contd.)
• Being responsible for all decisions can be quite
stressful and handling such responsibility can
be difficult.
• There is also great risk attached to
entrepreneurship. The success or failure of the
business rests with the entrepreneur.

14. Disadvantages (Contd.)
The disadvantages can be said to be:
• Uncertainty of income –”The entrepreneur is the
last one to be paid.”
• Risk of losing their entire investment
• Long hours and hard work
• Lower quality of life until the business gets
established
• High levels of stress
• Complete responsibility
• Discouragement

15. FACTORS FEEDING
THE ENTREPRENEURIAL FIRE
The rapid increase in entrepreneurs has been a result
of:
• Considering entrepreneurs as heroes
• Entrepreneurial education
• Demographic and economic factors
• Shift to a service economy
• Technological advancements
• Independent lifestyles
• Commerce and the Internet
• Additional international opportunities

16. Riddle for the Day
• I’m tall when I’m young and I’m short when I’m
old. What am I?

17. Answer to the Riddle
• A candle

18. A Brain Teaser for You
• If an electric train is travelling south, which way
is the smoke going?

19. Answer to the Brain Teaser
• There is no smoke, it’s an electric train!

20. Thought for the Day
“If you want to be an entrepreneur, it's not a job,
it's a lifestyle. It defines you. Forget about
vacations, about going home at 6 pm - last thing
at night you'll send emails, first thing in the
morning you'll read emails, and you'll wake up
in the middle of the night. But it's hugely
rewarding as you're fulfilling something for
yourself.”
- Niklas Zennstrom

21. Assignment #1
• How important is management as a factor of
production?