UNDER CALCUTTA UNIVERSITY CBCS PATTERN B.COM STUDENTS WILL FIND AN ADDITIUONAL TO THEIR CHAPTERS. PURENTS OF ENTRPRENEURSHIP PROGRAMMES CAN ALSO GAIN KNOWLEDGE FROM THIS CONCEPT OF ENTRPRENEUR ; TYPES OF ENTRPRENEURS CREATIVITY AND INNOVATION

1. CHAPTER 1 INTRODUCTION TO
ENTREPRENEURSHIP
DEVELOPMENT
PROF. MAHUA MUKHERJEE

2. QUESTION PATTERN
 10 QX 1M = 10 MARKS
 15QX2M = 30 MARKS

3. DAVID H . HOLT
 REMAIN UNEMPLOYED
 GET AN EMPLOYMENT UNDER OTHERS
 ENTREPRENEURSHIP
With the growing unemployment and tough
competition, the third option has now become a
necessary choice for each individual particularly
in India.
Holt has aptly remarked that-”America was
discovered by entrepreneurs, nourished by
entrepreneurs and became a world economic
power by entrepreneurial activity.”

4. ECONOMICS AND
ENTREPRENEURSHIP
 Entrepreneurship is one of the four factors of
production-
1. LAND
2. LABOUR
3. CAPITAL
4. ENTRPRENEURSHIP (ORGANISER)
According to RICHARD CANTILLION a noted
French economist, for the very first time used
this term in business literature.It first occurred in
1723 in the French dictionary Dictionaire
Universel de Commerce

5. According to Richard Cantillion”AN
ENTREPRENEUR IS THE AGENT WHO BUYS
FACTORS OF PRODUCTION AT CERTAIN PRICES
IN ORDER TO COMBINE THEM INTO A PRODUCT
WITH A VIEW TO SELLING IT AT UNCERTAIN
PRICES IN THE FUTURE.”

6.  According to JOSEPH
SCHUMPETER , a noted Austrian and
American economist **“ an
entrpreneur is an innovator who brings
in economic development through new
combinations of factors of production.”
 Entrepreneurship is creative
destruction i.e an entrepreneur
destroys the old ways of getting things
done and establishes newer and
better ways of getting things done.

7. Definition
 The term entrepreneur is derived from
a French word “entreprendre” .
“entre” meaning between
“prendre” meaning to undertake
 The words were originally used to
describe people who undertake the
risks of starting a new venture.

8. Evolution of entrepreneurship
 17000 BCE – New Guinea exchange
of OBSIDIAN for tools, skin and food.
 Entrepreneurship is an instrumental
force triggering transformations in
various realms of society.
 We can summarise the evolution of
entrepreneurship as follows

9. PERSPECTIVES OF
ENTRPRENEURSHIP
CANTILLON
[FRENCH
ECONOMIST]
RICHARD CANTILLON (1730) used the term “entrpreneur” for the first
time in Economics and associated it with risk taking.(He balances
between supplies and demand of the economy.)
SAY
[FRENCH
ECONOMIST]
JEAN BAPTISE SAY (1827) associated entrepreurship with
the function of co-ordination.(The entrepreneur
shiftseconomic resources out of an area of lower to an area
of higher yield)
MENGER
[AUSTRIAN
ECONOMIST]
CARL MENGER (1871)Entrepreneurs bear uncertainities&
take purposeful decisions by the knowledge they posses.(A
co-ordinating agent)
SCUMPETER
[AUSTRIAN
POLITICAL
ECONOMIST]
JOSEPH SCHUMPETER (1965) said entrepreneurs are
innovators

10. ELEMENTS OF
ENTRPRENEURSHIP
 OPPORTUNITY
 IDEA
 INNOVATION
 RISK AND UNCERTAINITY
 ECONOMIC ACTIVITY
 DYNAMIC ACTIVITY
 PROFIT POTENTIAL
 VALUE MAXIMISATION
 TIME
 STRATEGY FORMULATION
Identification of opportunities to earn
profits or value creation – SWOT
ANALYSISA thought leading to a possible course of action
It is a process of implementation of new ideas
Ability to take calculated risks
with confidence
Utilisation of scarce resources in an
uncertain environment continuously
generating wealth
Not only generation but also
exploitation of new ideas
Expecting a level of return for undertaking
risk
It has a dimension aim to maximise
the purpose of its formation
Have patience
Developing strategies to
face challanges

11. Determinants Of
Entrepreneurship
 FACTORS
1. Personal Level Factors – These are the
personal and pschological characteristics of the
individuals that have an effect on the
entrepreneurship environment in an economy.
2. Social Level Factors – These are the various
aspects and perspectives of the society that influence
entrepreneural culture.
3. Economy Level Factors – These are the
various macro economic factors that play a vital
role in development of entrepreneurship in an
economy.

12. PERSONAL LEVEL FACTORS
WILLINGNESS TO TAKE
RISKSTO EARN HIGH RETURNS
MOTIVES/GOALS-Besides
Profits >power,prestige,security
and service to society
ACHIEVEMENT NEEDS-
characterized by high
achievement orientation which
drives them to excel and grow
TYPE “A” PERSONALITY-
chronic incessant struggle to
achieve more in less amount of
time
LOCUS OF CONTROL-they
control their own lives,not fate
or luck
WITHDRAWAL OF STATUS
RESPECT creativity stimulates

13. SOCIAL LEVEL FACTORS
FAMILY BACKGROUND
EDUCATIONAL SYSTEM
SOCIETAL ATTITUDES
CULTURAL VALUES
SUB CULTURAL VALUES

14. ECONOMY LEVEL FACTORS
AVAILABILITY OF RAW
MATERIALS
AVAILABILITY OF LABOUR
CAPITAL INVESTMENT
FINANCIAL MARKET
MARKET CONDITIONS
INFRASTRUCTURE GROWTH

15. IMPORTANCE OF ENTREPRENEURSH
1. Growth of Entrepreneurship
 Entrepreneurship the advent of new venture
particularly small ventures in order to
materialize the innovative ideas of the
entrepreneurs.
 Thus, the growth or establishment of small
enterprises is the specific contribution of
entrepreneurship in every economy of the
world.
 The statistics reveal that in USA economy
nearly half a million small enterprise is
established every year. Our country is not an
exception in this regard.

16. 2. Creation of job opportunities
 Entrepreneurship firms contributed a
large share of new jobs. It provides
entry-level jobs so necessary fur training
or gaining experience for unskilled
workers.
 The small enterprises are the only sector
that generates a large portion of total
employment every year.
 Moreover, entrepreneurial ventures
prepare and supply experienced labour
to the large industries.

17. 3. Innovation
 Entrepreneurship is the incubator of the innovation.
Innovation creates disequilibria in the present state of
order.
 It goes beyond discovery and does implementation and
commercialization, of innovations.
 “Leapfrog” innovation, research, and development are
being contributed by entrepreneurship.
 Thus, entrepreneurship nurses innovation that
provides new ventures, product, technology, market,
quality of good etc. to the economy that increases
Gross Domestic Products and standard of living of the
people.

18. 4. Impact on community development
 A community is better off if its
employment base is diversified among
many small entrepreneurial firms.
 It promotes abundant retail facilities, a
higher level of home ownership, fewer
slums, better, sanitation standards
and higher expenditure on education,
recreation, and religious activities.
 Thus, entrepreneurship leads to more
stability and a higher quality of
community life.

19. 5. The consequence of business failure
 The collapse of large industry almost has
irresistible damage to the development of state
and to the state of the economy and to the
financial condition of the relevant persons.
 The incumbents lost their jobs: suppliers and
financial institutions face a crisis of recovery.
 Customers are deprived of goods, services, and
the government losses taxes. This could not
happen in the case of failure of entrepreneurship.
 There shall be no measurable effect upon the
economy and no political repercussions too.

20. 6. Spawns entrepreneurship
 Entrepreneurship is the nursing ground for
new inexperienced adventurists.
 It is the field where a person can start his/her
idea of the venture, which may be ended up
in a giant enterprise. All the large industrial
ventures started as a small entrepreneurial
enterprise.
 Therefore, entrepreneurship provides a wide
spectrum of ventures and entrepreneurs in
every economy. The vast open arena of
entrepreneurship thus acts as an incubator to
entrepreneurs.

21. 7. Enhances standard of living
 Standard of living is a concept built on increasing
amount of consumption of a variety of goods and
services over a particular period by a household.
 So it depends on the availability of diversified
products in the market. Entrepreneurship provides
enormous kinds of a product of various natures by their
innovation.
 Besides, it increases the income of the people who
are employed in the entrepreneurial enterprises.
 That also capable employed persons to consume more
goods and services. In effect, entrepreneurship
enhances the standard of living of the people of a
country.

22. 8.Promotes research and development
 Entrepreneurship is innovation and hence the
innovated ideas of goods and services have to
be tested by experimentation.
 Therefore, entrepreneurship provides funds
for research and development with universities
and research institutions. This promotes the
general development, research, and
development in the economy.
 Entrepreneurship is the pioneering zeal that
provides events in our civilization.
 We are indebted to it for having prosperity in
every arena of human life- economic,
technological and cultural.

23. 3 KEY TERMS
 ENTRAPRENEUR
 INTRAPRENEUR
 MANAGER

24. CONCEPTS OF INTRAPRENEUR AND
MANAGER
 INTRAPRENEUR
 HE IS AN EMPLOYEE OF A LARGE
ORGANISATION
 HE THE ORGANISATION
 HE USES HIS ENTRAPRENEURAL SKILLS TO
DEVELOP NEW PRODUCTS,
PROCESSES,SERVICES AND SYSTEMS.
 SUCH A PERSON IS GIVEN ADEQUATE
FREEDOM AND RESOURCES TO INITIATE NEW
PRODUCTS, PROCESSES , SERVICES AND
SYSTEMS.
 THUS AN INTRAPRENEUR IS CONSIDERED TO
BE AN “INSIDE ENTREPRENEUR”

25. CHARACTERISTICS OF AN
INTRAPRENEUR
 Visionary and flexible
 Know how of the environment
 Think and develop management
options
 Stimulate and support team work
 Encourage suggestions and open
discussions

26. ENTREPRENEUR,INTRAPRENE
UR & MANAGER
BASIS ENTREPRENEUR INTRAPRENEUR
CAPACITY OWNER EMPLOYEE/MANAGE
R
STATUS OWN BOSS SALARIED
EMPLOYEE
DECISION TAKES DECISION EXECUTES
DECISIONS IN
CONCURRNCE WITH
OWNER/BOD
RISK BEARS THE RISK DOES NOT BEAR
THE RISKS
ASSOCIATED WITH
THESE ACTIVITIES
REWARD UNCERTAIN AND
UNLIMITED INCOME
FIXED SALARY AND
REWARDS

27. BASIS ENTREPRENEUR MANAGER
STATUS OWNER EMPLOYEE
MOTIVE START A VENTURE
BY SETTING UP AN
ENTERPRISE
RENDER SERVICES
TO AN
ENTREPRENEUR
INNOVATION ACT AS THE
INNOVATOR AND
CHANGE AGENT
MAY NOT ALWAYS
PLAN AN
INNOVATOR’S ROLE
RISK ASSUMES ALL RISKS
AND
UNCERTAINITIES
USUALLY DOES NOT
SHARE ANY RISK
INVOLVED
REWARD PROFIT SALARY

28. Classification of Entrepreneurs
ACORDING TO CLARANCE
DANHOFF
1. INNOVATIVE ENTREPRENEURS
2. ADAPTIVE ENTREPRENEURS
3. FABIAN ENTREPRENEURS
4. DRONE ENTREPRENEURS

29. According to Clarence Danhof
 1. Innovative Entrepreneur
 An innovative entrepreneur is one who introduces new
product, new service or new market.
 An innovative entrepreneur is also known as modern
entrepreneur.
 An innovative entrepreneur can work only when a certain
level of development is reached.
 They invent new products.
PROF.MAHUAMUKHERJEE

30. 2. Adaptive Entrepreneur
 Adaptive entrepreneur is one adapts the successful
innovations of innovative entrepreneur.
 These entrepreneurs imitate the techniques and
technologies innovated by others.
 These entrepreneurs can be seen both in
underdeveloped and developing countries.
 They also make small changes in relevance to their
market environment.

31. 3. Fabian Entrepreneur
 A fabian entrepreneur is one who responds to changes
only when he is very clear that failure to respond to
changes would result in losses.
 Such entrepreneurs do not introduce new changes.
 They also do not desire to adopt new methods.
 They are very shy and stick to old customs.
 They are very cautious

32. 4. Drone Entrepreneurs
 These entrepreneurs do not make any changes.
 They refuse to utilize the opportunities and may
also suffer losses.
 They are very conventional.
 They refuse to introduce changes.
 They even make losses but avoid changes.
 Sometimes they may be pushed out of the market.

33. According to the type of the
business
 Business Entrepreneurs
 Trading Entrepreneurs
 Industrial Entrepreneurs
 Corporate Entrepreneurs
 Agricultural Entrepreneurs
 Retail Entrepreneurs
 Service Entrepreneurs
 and Social Entrepreneurs.

34.  1. Business Entrepreneurs
 Business entrepreneurs are those who conceive an idea to
for a new product or service and then create a business
to convert their ideas into reality.
 These entrepreneurs may be found in small business units
or big enterprises.
 They concentrate both on production and marketing
activities.
 Example: A Printing Press, bakery or a textile unit.

35. 2. Trading Entrepreneurs
 Trading Entrepreneurs are those who undertake trading
activities.
 These entrepreneurs do not concentrate on
manufacturing activities.
 They give more emphasis on distribution and
marketing of goods.
 They identify potential markets, create demand for
the product and influence people to buy the
product.
 Example: Agents and Wholesalers

36. 3. Industrial Entrepreneurs
 Industrial Entrepreneurs are those who concentrate in
industrial and production activities.
 They identify the needs of the customers and manufacture
a product according to their needs.
 They are generally a product-Oriented entrepreneur.
 Example: A manufacturer of Automobile spare parts,
computer accessories

37. 4. Corporate Entrepreneur
 Corporate entrepreneurs are those who exhibit innovative
skills in organizing and managing corporate undertaking.
 Example: A Trust registered under the Trust Act.
5. Agricultural Entrepreneur
 An agricultural entrepreneur is one who concentrates on
agricultural activities.
 These entrepreneurs concentrate on activities like raising
agricultural production, marketing of fertilizers etc.

38. 6. Retail Entrepreneurs
 Retail entrepreneurs are those who undertake trading
activities.
 They have direct contact with customers and hence
they are customer oriented.
 Example: An entrepreneur running a departmental
store
7. Service Entrepreneur
 A service entrepreneur is one who provides services
to customers.
 They make profit by rendering services.
 Example: An entrepreneur running a hotel or dry
cleaning unit.

39. 8. Social Entrepreneur
 A social entrepreneur is one who provides importance to
the society by serving them.
 He concentrates on social issues and does not aim to
make profit.
 Example: A person running an orphanage.

40. According to the Stages of
Development
1. First Generation Entrepreneur
2. Modern Entrepreneurs or
Innovative Entrepreneurs
3. Classical Entrepreneur
4. Inherited Entrepreneurs

41.  1. First Generation Entrepreneur
 A first generation entrepreneur is one who sets up
an enterprise by his innovative skill.
 He combines various factors of production and
provides marketable product or services by
adopting innovative ideas and start an enterprise
on his own.
 Though such a person may have the family
background of some business, such entrepreneurs
may also establish a certain business which may
be unrelated to their family business.

42. 2. Modern Entrepreneurs or Innovative
Entrepreneurs
 A modern entrepreneur is a dynamic entrepreneur.
 He always looks for changes and responds to the
changing demand of the market.
 His business ventures suits the current marketing
needs.

43. 3. Classical Entrepreneur
 Classical entrepreneur is a stereo type
entrepreneur. He aims at maximizing profits
at a consistent level. There may or may not
be an element of growth. Survival of the firm
is given more importance by these
entrepreneurs.
 4. Inherited Entrepreneurs
 These entrepreneurs have inherited family
business or possess experience from their
family business. These entrepreneurs may
like to diversify a little from their family
business.

44. Classification of
Entrepreneurs According to
Motivational Aspects
.1. Induced Entrepreneur
2. Pure Entrepreneur
3. Motivated Entrepreneurs and
4. Spontaneous Entrepreneurs

45.  1. Pure Entrepreneur
 A pure entrepreneur is a person who is motivated
by psychological and economic factors.
Entrepreneurial task is undertaken by them due
to certain reasons. Ability to handle risk, desire to
enjoy better status, desire to get recognition in
the society, thirst for making money motivates a
person to take up entrepreneurial activities.
 2. Induced Entrepreneur
 Induced entrepreneur are those who takes up
entrepreneurial task due to the incentives and
subsides granted by the government. Financial
and technical assistance provided by the
government motivates a person to start new
ventures

46.  Motivated Entrepreneur
 They are motivated by the desire far their
self-fulfillment. They emerge because of the
possibility of producing and, selling new
products. They are also motivated by
economic factors.
 4. Spontaneous Entrepreneur
 A person, turns out to be an entrepreneur,
because of the natural talent vested in him.
These entrepreneurs have self confidence
and emerge as challengers. They take up
entrepreneurial activity in order to tap their
talents. They have great self confidence in
their talent and are highly resourceful.

47. Classification of Entrepreneurs
according to Technological Aspects
According to Technical Aspects,
Entrepreneurs shall be classified as
1. Technical Entrepreneurs,
2. Non-Technical Entrepreneurs and
3. Professional Entrepreneurs.

48. 1. Technical Entrepreneur
 A technical entrepreneur is one who concentrates more
on production activities.
 He has got sound technical knowledge. He utilizes his
technical knowledge and demonstrates his innovative
capabilities.
 He is also known as technocrat.
2. Non-Technical Entrepreneur
 A non-technical entrepreneur concentrates more on
marketing activities.
 He tries to find out new strategies for marketing goods.
 He also promotes his business by employing various
marketing methods.

49. 3. Professional Entrepreneur
 Professional entrepreneur is a person who
applies innovative ideas in setting up of a
business.
 He is interested in establishing the
enterprises rather than managing it.
 Once the business is established. the
entrepreneur will sell the business to some
one else.

50. ENTREPRENEURSHIP AND CREATIVE BEHAV
INVENTION
CREATION OF
SOMETHING
NEW
RESULTS IN NEW
KNOWLEDGE
INNOVATION
TRANSFORMATION
OF AN IDEA INTO AN
USEFUL
APPLICATION
RESULTS IN NEW
PRODUCTS ,
SERVICES OR
PROCESSES

51.  Creativity is the seed that inspires
entrepreneurship
 Innovation is the process
 According to Peter Drucker innovation is
the means by which entrepreneurs
create new wealth producing
resources.
 Invention is the verified result of an
creative idea
 Innovation consists of something new
into useful goods and services

52.  Innovators include not only who
create new products but also those
who identify new technological
processes, new forms of plant life
new designs etc.
 Each of these ideas can lead to new
patents.
 Innovation is the development
process
 It is translation of an idea into
application.

53. INVENTION = CREATING
SOMETHING NEW + PATIENCE +
INTELLIGENCE
INNOVATION = CREATIVITY + RISK
TAKING ABILITY + THINKING

54. CHARACTERISTICS OF INNOVATIO
 COLLABORATIVE PROCESS
 INTENTIONAL PROCESS
 CHANGE FOR BETTERMENT
 CREATES VALUE
 EXPLORES OPPORTUNITIES
 ADVANTAGE
 IMPLEMENTATION OF IDEAS
 POSES CHALLANGE
 CUSTOMER FOCUS
 CREATIVITY
 CULTURE

65. CONFLICT IN FAMILY
BUSINESS
A family conflict can
 impede business relations and
decisions;
 a difference at work can make
interacting in the family more difficult.
 Business families need to manage
issues in all three spheres and be
disciplined to not let conflict in one area
infect another area of the family's life.

66.  One of the goals of a business
family is to learn how to manage
conflict inside the family so that
good family decisions surface,
individuals grow in healthy ways,
and relationships achieve their
potential.

67.  CONFLICT in a family businerss
arises in the form of disaggrements
on strategic or tactical issues and
differences in opinions.

68. OWNERSHIP
 Handing over ownership of the family
business is an emotionally sensitive
process with the potential to create
significant conflict between parents
and their children and between
siblings.

69. BUSINESS
 Given the complexity of ownership
transition, the question of who has
control represents a crucial decision.
“Insider” and “Outsider” owners (i.e.
owners who work in the business and
owners who don’t) typically have
different perspectives on share
ownership. Outsiders often regard the
insiders as plunderers of their legacy.

70. FAMILY
 Left unresolved, envy has the
potential to fragment the family and do
real damage to the business.
Commonly when there is envy
between siblings it can be seen by
other family members and is often
evidenced in snide comments and put
downs

71. RESOLVING FAMILY
CONFLICTS
1. Leverage formal governance
structures to mitigate conflict
 One issue that we have seen arise in
many family businesses is that family
members may lack a forum for
discussing issues in the business.
Formal structures like family councils,
boards and family forums can offer
family members a safe, organised way to
bring up issues and negotiate conflict.
Formal governance can also help
mitigate family and financial issues by
separating ownership of the business
from its management functions.

72. 2.Give family members space
(and permission) to air
grievances
 One problem that we frequently see in
businesses with a first-generation matriarch
or patriarch is that family members may lack
a safe way to express their needs and
concerns. When people don’t feel listened to
or appreciated, seemingly small problems
can mushroom into major business and
family drama.
 To help prevent conflicts, family leaders
should actively encourage family members to
air concerns constructively and give them the
space they need to disagree. Senior leaders
should come prepared to listen without
judgment and be willing to fairly consider
what is being brought up.

73. 3: Don’t let business bleed
into family time (too much)
 It’s very challenging to keep from
bringing business home, but one way
that conflicts turn into family drama is by
failing to keep them separate. Family
business leaders must set the example
by separating business and family time
as much as possible.
 One way to make this separation
possible is by having formal spaces and
structured times to discuss business
issues. Explicitly making other times no-
business zones can help family
members relax into their personal roles
and get away from work.

74. 4: Communicate early and
often about issues
 Many large complications start as
small problems that could have been
resolved with early intervention.
Sometimes, spotting issues early and
addressing them through clear
communication can be enough to
prevent a conflict from developing.

75. 5: Bring in experts to mediate
major conflicts
 Some issues simply cannot be
resolved internally. When family
members become entrenched and
constructive dialogue isn’t possible, an
objective expert who is trained to help
resolve conflict can help cut through
the emotions and focus on issues. A
mediator can also help guide a family
through initial conversations all the
way to a final resolution.

76. MSMEs and entrepreneurship in
India
The Government of India has enacted the Micro, Small and Medium Enterprises
Development (MSMED) Act, 2006 in terms of which the definition of micro, small
and medium enterprises is as under :-
Classification of
the MSME
New Classification
(annual turnover)
Previous classification –
Ceiling on Investment in
Plant and Machinery (in
Rs)
Micro
Not exceeding Rs 5
crores
Below 25 lakhs
Small
Between Rs 5
crores to Rs 75
crores
25 lakhs to 5 crores
Medium
Rs 75 to Rs 250
crores
5 crores to 10 crores

77.  Under the previous classification a
separate methodology was adopted
for service sector. Now the
classification was made similar to the
goods MSMEs as the general
turnover-based criteria was made
applicable to service sector also.
 In 2015, the government has
introduced an amendment bill to
change the limit in all categories and it
was adopted in February 2018.

78.  MSME- an abbreviation of Micro, Small &
Medium enterprises- is the pillar of economic
growth in many developed, and developing
countries in the world.
 Often rightly termed as “the engine of growth” for
India.
 MSME has played a prominent role in the
development of the country in terms of creating
employment opportunities.
 MSME has employed more than 50 million
people, scaling manufacturing capabilities,
curtailing regional disparities, balancing the
distribution of wealth, and contributing to
the GDP-MSME sector forms 8% of GDP.

79.  The advantage of this sector is it
requires less investment, thus creating
employment on a large scale, and
reducing the employment and
underemployment problems.
 Moreover, this sector has survived
almost all threats emerging out of still
completion from both domestic and
international market.