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ENTREPRENEURSHIP
DEVELOPMENT
Part - 1
Dr.V.PUSHPALATHA M.Com.,M.Phil.,M.B.A.,P.hD
PRINCIPAL I/C
HEAD, DEPARTMENT OF COMMERCE,
EMG YADAVA WOMEN’S COLLEGE,
MADURAI
Entrepreneurship Development part 1
DEFINITION
• The term 'entrepreneurship' is often used synonymously with
'entrepreneur'. Though they are the two sides of the same coin,
conceptually they are different. The entrepreneur is essentially a
business leader and entrepreneurship is the function performed by
him.
• Robert Hisrich states 'Entrepreneurship is the process of creating
something new and assuming the risks and rewards'
• Arthur Cole states "Entrepreneurship is the purposeful activity of
an individual or a group of associated individuals, undertaken to
initiate, maintain and aggrandize profit by production and
distribution of economic goods and services."
• B. Higgins: "Entrepreneurship means the functions of seeking
investment and production opportunity, organising an enterprise to
undertake a new production process, raising capital, hiring labour,
arranging the supply of raw materials, finding site, introducing a new
technique and commodities, discovering new sources of raw materials
and selecting top managers of day to day operations of the enterprise."
• B.C Tondon: "Entrepreneurship is the ability to create something new,
organizing and coordinating and undertaking risk and handling economic
uncertainty."
Entrepreneurship Development part 1
Entrepreneurship Development part 1
Entrepreneurship Development part 1
Qualities of entrepreneurs
• Achievable goals: The
entrepreneurs have very positive
desires to achieve high goals. Such
high self motivation keeps them
strong and confident to face
various obstacles and misfortunes.
Hence they are successful in
setting a prosperous organisation.
• Future foresight: The
entrepreneurs have good foresight
to knw about the future market
development and the external
business environment. He can take
proper decision according to the
market situations and market
changes. This also helps them to
take timely actions.
• Intellectual Capabilities:
Mental ability consists of
intelligence and creative
thinking. To be an
entrepreneur, a person must
be intelligent and have the
ability of creative thinking.
This ability will help him to
take proper decision.
• Technical Knoweledge: An
entrepreneur should have
sufficient technical knowledge
about the products and his
plan to produce. Timely change
of technology should always be
updated to be in pace with the
market.
Qualities of entrepreneurs
• Hard Work: A successful
entrepreneur will always be
ready to work hard. Hard work
will always distinguish a
successful entrepreneur from
unsuccessful one. At the start
of any venture, the
entrepreneur has to work
tediously, for long hours and
independently handle the main
areas.
• Highly Optimistic: An
entrepreneur always thinks
positive in all the activities. He
is always optimistic with the
market situations even in failure
times. Such positive attitude
helps the enterprise to run
successfully.
• Communication Skills: This refers
to communicate effectively. It is
very important that the sender
and receiver of the message are
being understood perfectly. An
entrepreneur has to communicate
to various parties i.e. customers,
suppliers, creditors, employees,
etc.
• Creativity: Creativity is the ability
to bring something new into
existence. Innovation is the
process of doing new things, and
creativity is a prequisite to
innovation. An entrepreneur should
be creative, because ideas usually
evolve through creative process
whereby imaginative people bring
them into existence, grow them
and develop them positively.
Entrepreneurship Development part 1
Functions of Entrepreneur
• 1 Risk-bearing function:
• The functions of an entrepreneur as risk
bearer is specific in nature. The
entrepreneur assumes all possible risks of
business which emerges due to the
possibility of changes in the tastes of
consumers, modern techniques of
production and new inventions. Such risks
are not insurable and incalculable. In
simple terms such risks are known as
uncertainty concerning a loss.
• The entrepreneur, according to Kinght, "is
the economic functionary who undertakes
such responsibility of uncertainty which by
its very nature cannot be insured nor
capitalised nor salaried too."
• Richard Cantillon conceived of an
entrepreneur as a bearer of non-insurable
risk because he described an entrepreneur
as a person who buys things at a certain
price and sells them at an uncertain price.
• Thus, risk bearing or uncertainty bearing
still remains the most important function
of an entrepreneur which he tries to
minimise by his initiative, skill and good
judgment.
• 2. Organisational Function:
• Entrepreneur as an organiser and his
organising function is described by J.B.
Say as a function whereby the
entrepreneur brings together various
factors of production, ensures continuing
management and renders risk-bearing
functions as well. His definition associates
entrepreneur with the functions of
coordination, organisation and supervision.
According to him, an entrepreneur is one
who combines the land of one, the labour
of another and the capital of yet another
and thus produces a product. By selling
the product in the market, he pays
interest on capital, rent on land and wages
to labourers and what remains is his/her
profit. In this way, he describes an
entrepreneur as an organiser who alone
determines the lines of business to expand
and capital to employ more judiciously. He
is the ultimate judge in the conduct of the
business.
Functions of Entrepreneur
• 3. Innovative Function:
• The basic function an entrepreneur performs
is to innovate new products, services, ideas
and informations for the enterprise. As an
innovator, the entrepreneur foresees the
potentially profitable opportunity and tries to
exploit it. He is always involved in the process
of doing new things. Whenever a new idea
occurs entrepreneurial efforts are essential to
convert the idea into practical application.
• The introduction of a new product in the
market with which the customers are not get
familiar with.
• Introduction of a new method of production
technology which is not yet tested by
experience in the branch of manufacture
concerned.
• The opening of a new market into which the
specific product has not previously entered.
• The discovery of a new source of supply of
raw material, irrespective of whether this
source already exists or has first to be
created.
• The carrying out of the new form of
oranisation of any industry by creating of a
monopoly position or the breaking up of it.
• 4. Managerial Function:
• Entrepreneur also performs a variety of
managerial function like determination
of business objectives, formulation of
production plans, product analysis and
market research, organisation of sales
procurring machine and material,
recruitment of men and undertaking, of
business operations. He also undertakes
the basic managerial functions of
planning, organising, co-ordinating,
staffing, directing, motivating and
controlling in the enterprise. He
provides a logical and scientific basis to
the above functions for the smooth
operation of the enterprise thereby
avoids chaos in the field of production,
marketing, purchasing, recruiting and
selection, etc. In large establishments,
these managerial functions of the
entrepreneur are delegated to the paid
managers for more effective and
efficient execution.
Functions of Entrepreneur
• 5. Decision Making Function:
• The most vital function an entrepreneur
discharges refers to decision making in various
fields of the business enterprise. He is the
decision maker of all activities of the
enterprise. A. H. Cole described an
entrepreneur as a decision maker and
attributed the following functions to him.
• He determines the business objectives suitable
for the enterprise.
• He develops an organization and creates an
atmosphere for maintaining a cordial
relationship with subordinates and all
employees of the organization.
• He decides in securing adequate financial
resources for the organisation and maintains
good relations with the existing and potential
investors and financiers.
• He decides in introducing advanced modern
technology in the enterprise to cope up with
changing scenario of manufacturing process.
• He decides the development of a market for
his product, develops new product or modify
the existing product in accordance with the
changing consumer's fashion, taste and
preference.
• 6. Research
• An entrepreneur is a practical dreamer and
does a lot of ground-work before taking a
leap in his ventures. In other words, an
entrepreneur finalizes an idea only after
considering a variety of options, analyzing
their strengths and weaknesses by applying
analytical techniques, testing their
applicability, supplementing them with
empirical findings, and then choosing the best
alternative. It is then that he applies his
ideas in practice. The selection of an idea,
thus, involves the application of research
methodology by an entrepreneur.
• 7. Development of Management Skills
• The work of an entrepreneur involves the use
of managerial skills, which he develops while
planning, organizing, staffing, directing,
controlling and coordinating the activities of
business. His managerial skills get further
strengthened when he engages himself in
establishing equilibrium between his
organization and its environment.However,
when the size of business grows considerably,
an entrepreneur can employ professional
managers for the effective management of
business operations.
•
Functions of Entrepreneur
• 8. Overcoming Resistance to
Change
• New innovations are generally
opposed by people because it
makes them change their
existing behavior patterns. An
entrepreneur always first tries
new ideas at his level.
• It is only after the successful
implementation of these ideas
that an entrepreneur makes
these ideas available to others
for their benefit. In this
manner, an entrepreneur paves
the way for the acceptance of
his ideas by others. This is a
reflection of his will power,
enthusiasm and energy, which
helps him in overcoming the
society’s resistance to change.
• 9. Catalyst of Economic
Development
• An entrepreneur plays an
important role in accelerating
the pace of economic
development of a country by
discovering new uses of
available resources and
maximizing their utilization.To
better appreciate the concept
of an entrepreneur, it is
desirable to distinguish him
from an entrepreneur and
promoter.
Entrepreneurship Development part 1
Types of Entrepreneur
• Innovating Entrepreneurs: This type of
entrepreneurship is characterized by
aggressive assemblage of information and
the analysis of results deriving from novel
combination of factors of production.
Entrepreneurs falling in this class are
generally aggressive in experimentation and
exhibited shrewdness in putting attractive
possibilities into practice. They are the
entrepreneurs who have creative and
innovative ideas of starting a new
business. An innovating entrepreneur sees
the opportunity for introducing a new
technique or a new product or a new
market. He may raise money to launch an
enterprise, assemble the various factors,
and choose top executives and the set the
organization going. Schumpeter’s
entrepreneur was of this type. Innovative
entrepreneurs thus, results in the creation
of something new. They are the
contributors to the economic development
of a country. Innovating entrepreneurs are
very commonly frond in undeveloped
countries. There is dearth of such
entrepreneurs in developed countries.
Innovating entrepreneurs played the key
role in the rise of modern capitalism,
through their enterprising sprit, hope of
moneymaking, ability to recognize and
exploit opportunities, etc.
• Adoptive or Imitative Entrepreneur:
There is a second group of entrepreneurs
generally referred as imitative
entrepreneurs. The imitative entrepreneurs
copy or adopt suitable innovations made by
the innovative entrepreneurs. They does
not innovate the changes himself. They
only imitates technology innovated by
others. Such entrepreneurs are
particularly important in developing
courtiers because they contribute
significantly to the development of such
economies. Imitative entrepreneurs are
most suitable for the developing regions
because in such countries people prefer to
imitate the technology, knowledge and skill
already available in more advanced
countries. In highly backward countries
there is shortage of imitative
entrepreneurs also. People who can imitate
the technologies and products to the
particular conditions prevailing in these
countries are needed. Sometimes, there is
a need to adjust and adopt the new
technologies to their special conditions.
Imitative entrepreneurs help to transform
the system with the limited resources
available. However; these entrepreneurs
face lesser risks and uncertainty then
innovative entrepreneurs. While innovative
entrepreneurs are creative, imitative
entrepreneurs are adoptive.
Entrepreneurship Development part 1
Types of Entrepreneur
• Fabian Entrepreneur: The third type is
Fabian entrepreneur. By nature these
entrepreneurs are shy and lazy. This type
of entrepreneurs have neither will to
introduce new changes nor desire to adopt
new methods of production innovated by
the most entrepreneurs. They follow the
set procedures, customs, traditions and
religions. They are not much interested in
taking risk and they try to follow the
footsteps of their predecessors. Usually
they are second generation entrepreneur in
a business family enterprise.
• Drone Entrepreneur: The fourth type is
Drone entrepreneurs who refuse to copy or
use opportunities that come on their way.
They are conventional in their approach
and stick to their set practices products,
production methods and ideas. They
struggle to survive not to grow. They may
be termed as Laggards. In such cases the
organization looses market, their
operations become uneconomical and they
may be pushed out of the market.
• Business Entrepreneurs: They are the
entrepreneurs who conceive an idea for
a new product or service and then
create a business to materialize their
idea into reality. They tap the entire
factor of production to develop a new
business opportunity. They may set up
a big enterprise or a small scale
business. When they establish small
business units they are called small
business entrepreneurs. In a majority
of cases, entrepreneurs are found in
small trading and manufacturing
business.
• Industrial Entrepreneur: Industrial
entrepreneur is essentially a
manufacturer who identifies the needs
of customers and creates products or
services to serve them. He is product-
oriented who starts through an
industrial unit to create a product like
electronic industry, textile unit,
machine tools.
Entrepreneurship Development part 1
Types of Entrepreneur
• D. Corporate Entrepreneur: These
entrepreneurs used his innovative skill
in organizing and managing a corporate
undertaking. A corporate undertaking is
a form of business organisation which is
registered under some statute or Act
like a trust registered under the Trust
Act, or a company registered under the
Companies Act. These corporate work
as separate legal entity. He is thus an
individual who plans, develops and
manages a corporate body.
• Agricultural Entrepreneur: Agricultural
entrepreneurs are those who undertake
agricultural activities as through
mechanization, irrigation and application
of technologies to produce the crop.
They cover a broad spectrum of the
agricultural sector and include
agriculture and allied occupations.
• Technical Entrepreneurs: With the
decline of joint family business and the
rise of scientific and technical
institutions, technically qualified
persons have entered the field of
business. These entrepreneurs may
enter business to commercially exploit
their inventions and discoveries. Their
main asset is technical expertise. They
raise the necessary capital and employ
experts in financial, legal- marketing
and other areas of business. Their
success depends upon how they start
production and on the acceptance
• Professional Entrepreneur: Professional
entrepreneur is an entrepreneur who is
interested in establishing a business but
does not have interest in managing it
after establishment. A professional
entrepreneur sells out the existing
business on good returns and starts
another business with new idea. Such
an entrepreneur is dynamic and
conceives new ideas to develop
alternative projects.
• of their products in the market.
Entrepreneurship Development part 1
Types of Entrepreneur
• Women Entrepreneurs: Women as
entrepreneurs have been a recent
phenomenon in India. The social norms
in India had made it difficult for
women to have a professional life. Now
this has changed. Progressive laws and
other incentives have also boosted the
presence of women in entrepreneurial
activity in diverse fields. In 1988, for
the first time, the definition of Women
Entrepreneurs’ enterprise was evolved
that termed an SSI unit/industry-
related service or business enterprise,
managed by one or more women
entrepreneurs in proprietary concerns,
or in which she/they individually or
jointly have a share capital of not less
than 51 per cent as partners /
shareholders / directors of a private
limited company / members of a
cooperative society, as a Woman
Enterprise.
• Social Entrepreneur: Social
entrepreneur is one who recognizes
the part of society which is stuck
and provides new ways to get it
unstuck. Be it dedicated efforts
for child upliftment, fighting for
the conservation of Assam’s
rainforests, working for the
betterment of the blind or
initiatives to empower women, the
entrepreneur’s passion is very
strong. Freedom, wealth,
exposure, social mobility and
greater individual confidence are
driving this huge wave of social
innovation and entrepreneurship.
After all are tired with the
Inefficiency of governments and
the indifference of corporate, and
want to make a change and this is
the case everywhere.
Entrepreneurship Development part 1
Entrepreneurship Development part 1
Role of Entrepreneurs in Economic
Development• Bringing Economic Growth and
Prosperity:
• Entrepreneur bring economic growth and
prosperity in the country through
generation of employment opportunities,
capital and wealth creation, increasing
per capita income and GDP,
improvement in quality of life by raising
the standard of living, growth of
infrastructural facilities, forward and
backward linkages in society,
development of backward regions,
economic independence. George gilder
observes, “The ‘heroic creativity of
entrepreneur came to seem essential to
our economic well-being in a global
economy”. Baumback and Mancuso
write, “In underdeveloped nations,
entrepreneurs often hold the key to
economic growth for a whole society.
So entrepreneur is not a dirty word or
a fast buck opportunist, but, rather
the backbone of the capitalist system”.
• Bringing Social Stability and Balanced
Regional Development:
• Entrepreneurs play a crucial and unique
role in bringing about social stability
and balanced regional development
through absorption of workforce in
industries, removal of poverty,
improving health and education
facilities, creating fair competition,
equitable distribution of income,
creation of social infrastructures,
empowering women and weaker sections
of the society and supply of qualitative
goods and services Although
entrepreneurs are criticized as self
interested exploiters.
Role of Entrepreneurs in Economic
Development
• Innovator in Economic Growth:
• by bringing new ideas, combinations,
products techniques, organizations,
new markets, making full use of
technical knowledge, balanced
growth, systematic innovation,
technological advancement,
implementation of mechanical skills,
an entrepreneur play very crucial
role in encouraging entrepreneurship
and economic development. Peter
Drucker writes, “Just as management
has become the specific organ of all
contemporary institutions and the
integrating organ of our society of
organizations, so innovation and
entrepreneurship have to become an
integral life-sustaining activity in our
organizations, our economy, and our
society”.
• Increase Productivity with Modern
Production System: Play an important
role in raising productivity. John
Keudrick writes, “Higher productivity is
chiefly a matter of improving
production techniques, and this task is
the entrepreneurial function par
excellence”. Two keys to higher
productivity are research and
development and investment in new
plant and machinery. But there is a
close link between R & D and
investment programmes, with a higher
entrepreneurial input into both”. George
Gilder in The Spirit of Enterprise said
that: “Entrepreneurs are innovators
who evoke demand’. They are makers
of markets, creators of capital, and
developers of opportunity and producers
of new technology.
Role of Entrepreneurs in Economic
Development
• Creation of Employment
Opportunities: Entrepreneurs play a
significant role in generation of
employment opportunities by
establishing new units in manufacturing,
trading and service sectors, laying
emphasis on small scale industries,
utilizing the surplus labour force in
varied industrial and/or service
activities, upholding self-employment as
a core objective. Entrepreneur
integrates resources and technologies
into profitable business ventures and
creates job opportunities.
• Export Promotion and Import
Substitution: Liberalization,
privatization and globalization [LPG] has
opened the arena of export promotion
and import substitution to
entrepreneurs by establishing industries
producing import substitution goods,
establish new industries, especially for
export, products, exploration of new
global markets, earning foreign
exchange reserves, utilizing the
available productive resources.
• Entrepreneur Plays a Role of Catalytic
Agent:
• As Joseph Schumpeter says,
entrepreneur’s task is “creative
destruction”. He destroys to create
new things. He changes and transmutes
values. He searches change and
responds to it. He is a change creator.
Ralph Harwitz writes in his book
Realities of Profitability’, “The
entrepreneur makes a happening, wants
piece of action, is the growth man.
Without him there is no happening, no
action, and no growth”.
• 8. Augmenting and Meeting Local
Demands:
• Entrepreneurs also play a significant
role in augmenting local demands and
meeting them satisfactorily. Towards
this entrepreneurs focus their attention
to manufacture service through
indigenous technology, skill, resources
and experiences.
Entrepreneurship Development part 1

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Entrepreneurship Development part 1

  • 1. ENTREPRENEURSHIP DEVELOPMENT Part - 1 Dr.V.PUSHPALATHA M.Com.,M.Phil.,M.B.A.,P.hD PRINCIPAL I/C HEAD, DEPARTMENT OF COMMERCE, EMG YADAVA WOMEN’S COLLEGE, MADURAI
  • 3. DEFINITION • The term 'entrepreneurship' is often used synonymously with 'entrepreneur'. Though they are the two sides of the same coin, conceptually they are different. The entrepreneur is essentially a business leader and entrepreneurship is the function performed by him. • Robert Hisrich states 'Entrepreneurship is the process of creating something new and assuming the risks and rewards' • Arthur Cole states "Entrepreneurship is the purposeful activity of an individual or a group of associated individuals, undertaken to initiate, maintain and aggrandize profit by production and distribution of economic goods and services." • B. Higgins: "Entrepreneurship means the functions of seeking investment and production opportunity, organising an enterprise to undertake a new production process, raising capital, hiring labour, arranging the supply of raw materials, finding site, introducing a new technique and commodities, discovering new sources of raw materials and selecting top managers of day to day operations of the enterprise." • B.C Tondon: "Entrepreneurship is the ability to create something new, organizing and coordinating and undertaking risk and handling economic uncertainty."
  • 7. Qualities of entrepreneurs • Achievable goals: The entrepreneurs have very positive desires to achieve high goals. Such high self motivation keeps them strong and confident to face various obstacles and misfortunes. Hence they are successful in setting a prosperous organisation. • Future foresight: The entrepreneurs have good foresight to knw about the future market development and the external business environment. He can take proper decision according to the market situations and market changes. This also helps them to take timely actions. • Intellectual Capabilities: Mental ability consists of intelligence and creative thinking. To be an entrepreneur, a person must be intelligent and have the ability of creative thinking. This ability will help him to take proper decision. • Technical Knoweledge: An entrepreneur should have sufficient technical knowledge about the products and his plan to produce. Timely change of technology should always be updated to be in pace with the market.
  • 8. Qualities of entrepreneurs • Hard Work: A successful entrepreneur will always be ready to work hard. Hard work will always distinguish a successful entrepreneur from unsuccessful one. At the start of any venture, the entrepreneur has to work tediously, for long hours and independently handle the main areas. • Highly Optimistic: An entrepreneur always thinks positive in all the activities. He is always optimistic with the market situations even in failure times. Such positive attitude helps the enterprise to run successfully. • Communication Skills: This refers to communicate effectively. It is very important that the sender and receiver of the message are being understood perfectly. An entrepreneur has to communicate to various parties i.e. customers, suppliers, creditors, employees, etc. • Creativity: Creativity is the ability to bring something new into existence. Innovation is the process of doing new things, and creativity is a prequisite to innovation. An entrepreneur should be creative, because ideas usually evolve through creative process whereby imaginative people bring them into existence, grow them and develop them positively.
  • 10. Functions of Entrepreneur • 1 Risk-bearing function: • The functions of an entrepreneur as risk bearer is specific in nature. The entrepreneur assumes all possible risks of business which emerges due to the possibility of changes in the tastes of consumers, modern techniques of production and new inventions. Such risks are not insurable and incalculable. In simple terms such risks are known as uncertainty concerning a loss. • The entrepreneur, according to Kinght, "is the economic functionary who undertakes such responsibility of uncertainty which by its very nature cannot be insured nor capitalised nor salaried too." • Richard Cantillon conceived of an entrepreneur as a bearer of non-insurable risk because he described an entrepreneur as a person who buys things at a certain price and sells them at an uncertain price. • Thus, risk bearing or uncertainty bearing still remains the most important function of an entrepreneur which he tries to minimise by his initiative, skill and good judgment. • 2. Organisational Function: • Entrepreneur as an organiser and his organising function is described by J.B. Say as a function whereby the entrepreneur brings together various factors of production, ensures continuing management and renders risk-bearing functions as well. His definition associates entrepreneur with the functions of coordination, organisation and supervision. According to him, an entrepreneur is one who combines the land of one, the labour of another and the capital of yet another and thus produces a product. By selling the product in the market, he pays interest on capital, rent on land and wages to labourers and what remains is his/her profit. In this way, he describes an entrepreneur as an organiser who alone determines the lines of business to expand and capital to employ more judiciously. He is the ultimate judge in the conduct of the business.
  • 11. Functions of Entrepreneur • 3. Innovative Function: • The basic function an entrepreneur performs is to innovate new products, services, ideas and informations for the enterprise. As an innovator, the entrepreneur foresees the potentially profitable opportunity and tries to exploit it. He is always involved in the process of doing new things. Whenever a new idea occurs entrepreneurial efforts are essential to convert the idea into practical application. • The introduction of a new product in the market with which the customers are not get familiar with. • Introduction of a new method of production technology which is not yet tested by experience in the branch of manufacture concerned. • The opening of a new market into which the specific product has not previously entered. • The discovery of a new source of supply of raw material, irrespective of whether this source already exists or has first to be created. • The carrying out of the new form of oranisation of any industry by creating of a monopoly position or the breaking up of it. • 4. Managerial Function: • Entrepreneur also performs a variety of managerial function like determination of business objectives, formulation of production plans, product analysis and market research, organisation of sales procurring machine and material, recruitment of men and undertaking, of business operations. He also undertakes the basic managerial functions of planning, organising, co-ordinating, staffing, directing, motivating and controlling in the enterprise. He provides a logical and scientific basis to the above functions for the smooth operation of the enterprise thereby avoids chaos in the field of production, marketing, purchasing, recruiting and selection, etc. In large establishments, these managerial functions of the entrepreneur are delegated to the paid managers for more effective and efficient execution.
  • 12. Functions of Entrepreneur • 5. Decision Making Function: • The most vital function an entrepreneur discharges refers to decision making in various fields of the business enterprise. He is the decision maker of all activities of the enterprise. A. H. Cole described an entrepreneur as a decision maker and attributed the following functions to him. • He determines the business objectives suitable for the enterprise. • He develops an organization and creates an atmosphere for maintaining a cordial relationship with subordinates and all employees of the organization. • He decides in securing adequate financial resources for the organisation and maintains good relations with the existing and potential investors and financiers. • He decides in introducing advanced modern technology in the enterprise to cope up with changing scenario of manufacturing process. • He decides the development of a market for his product, develops new product or modify the existing product in accordance with the changing consumer's fashion, taste and preference. • 6. Research • An entrepreneur is a practical dreamer and does a lot of ground-work before taking a leap in his ventures. In other words, an entrepreneur finalizes an idea only after considering a variety of options, analyzing their strengths and weaknesses by applying analytical techniques, testing their applicability, supplementing them with empirical findings, and then choosing the best alternative. It is then that he applies his ideas in practice. The selection of an idea, thus, involves the application of research methodology by an entrepreneur. • 7. Development of Management Skills • The work of an entrepreneur involves the use of managerial skills, which he develops while planning, organizing, staffing, directing, controlling and coordinating the activities of business. His managerial skills get further strengthened when he engages himself in establishing equilibrium between his organization and its environment.However, when the size of business grows considerably, an entrepreneur can employ professional managers for the effective management of business operations. •
  • 13. Functions of Entrepreneur • 8. Overcoming Resistance to Change • New innovations are generally opposed by people because it makes them change their existing behavior patterns. An entrepreneur always first tries new ideas at his level. • It is only after the successful implementation of these ideas that an entrepreneur makes these ideas available to others for their benefit. In this manner, an entrepreneur paves the way for the acceptance of his ideas by others. This is a reflection of his will power, enthusiasm and energy, which helps him in overcoming the society’s resistance to change. • 9. Catalyst of Economic Development • An entrepreneur plays an important role in accelerating the pace of economic development of a country by discovering new uses of available resources and maximizing their utilization.To better appreciate the concept of an entrepreneur, it is desirable to distinguish him from an entrepreneur and promoter.
  • 15. Types of Entrepreneur • Innovating Entrepreneurs: This type of entrepreneurship is characterized by aggressive assemblage of information and the analysis of results deriving from novel combination of factors of production. Entrepreneurs falling in this class are generally aggressive in experimentation and exhibited shrewdness in putting attractive possibilities into practice. They are the entrepreneurs who have creative and innovative ideas of starting a new business. An innovating entrepreneur sees the opportunity for introducing a new technique or a new product or a new market. He may raise money to launch an enterprise, assemble the various factors, and choose top executives and the set the organization going. Schumpeter’s entrepreneur was of this type. Innovative entrepreneurs thus, results in the creation of something new. They are the contributors to the economic development of a country. Innovating entrepreneurs are very commonly frond in undeveloped countries. There is dearth of such entrepreneurs in developed countries. Innovating entrepreneurs played the key role in the rise of modern capitalism, through their enterprising sprit, hope of moneymaking, ability to recognize and exploit opportunities, etc. • Adoptive or Imitative Entrepreneur: There is a second group of entrepreneurs generally referred as imitative entrepreneurs. The imitative entrepreneurs copy or adopt suitable innovations made by the innovative entrepreneurs. They does not innovate the changes himself. They only imitates technology innovated by others. Such entrepreneurs are particularly important in developing courtiers because they contribute significantly to the development of such economies. Imitative entrepreneurs are most suitable for the developing regions because in such countries people prefer to imitate the technology, knowledge and skill already available in more advanced countries. In highly backward countries there is shortage of imitative entrepreneurs also. People who can imitate the technologies and products to the particular conditions prevailing in these countries are needed. Sometimes, there is a need to adjust and adopt the new technologies to their special conditions. Imitative entrepreneurs help to transform the system with the limited resources available. However; these entrepreneurs face lesser risks and uncertainty then innovative entrepreneurs. While innovative entrepreneurs are creative, imitative entrepreneurs are adoptive.
  • 17. Types of Entrepreneur • Fabian Entrepreneur: The third type is Fabian entrepreneur. By nature these entrepreneurs are shy and lazy. This type of entrepreneurs have neither will to introduce new changes nor desire to adopt new methods of production innovated by the most entrepreneurs. They follow the set procedures, customs, traditions and religions. They are not much interested in taking risk and they try to follow the footsteps of their predecessors. Usually they are second generation entrepreneur in a business family enterprise. • Drone Entrepreneur: The fourth type is Drone entrepreneurs who refuse to copy or use opportunities that come on their way. They are conventional in their approach and stick to their set practices products, production methods and ideas. They struggle to survive not to grow. They may be termed as Laggards. In such cases the organization looses market, their operations become uneconomical and they may be pushed out of the market. • Business Entrepreneurs: They are the entrepreneurs who conceive an idea for a new product or service and then create a business to materialize their idea into reality. They tap the entire factor of production to develop a new business opportunity. They may set up a big enterprise or a small scale business. When they establish small business units they are called small business entrepreneurs. In a majority of cases, entrepreneurs are found in small trading and manufacturing business. • Industrial Entrepreneur: Industrial entrepreneur is essentially a manufacturer who identifies the needs of customers and creates products or services to serve them. He is product- oriented who starts through an industrial unit to create a product like electronic industry, textile unit, machine tools.
  • 19. Types of Entrepreneur • D. Corporate Entrepreneur: These entrepreneurs used his innovative skill in organizing and managing a corporate undertaking. A corporate undertaking is a form of business organisation which is registered under some statute or Act like a trust registered under the Trust Act, or a company registered under the Companies Act. These corporate work as separate legal entity. He is thus an individual who plans, develops and manages a corporate body. • Agricultural Entrepreneur: Agricultural entrepreneurs are those who undertake agricultural activities as through mechanization, irrigation and application of technologies to produce the crop. They cover a broad spectrum of the agricultural sector and include agriculture and allied occupations. • Technical Entrepreneurs: With the decline of joint family business and the rise of scientific and technical institutions, technically qualified persons have entered the field of business. These entrepreneurs may enter business to commercially exploit their inventions and discoveries. Their main asset is technical expertise. They raise the necessary capital and employ experts in financial, legal- marketing and other areas of business. Their success depends upon how they start production and on the acceptance • Professional Entrepreneur: Professional entrepreneur is an entrepreneur who is interested in establishing a business but does not have interest in managing it after establishment. A professional entrepreneur sells out the existing business on good returns and starts another business with new idea. Such an entrepreneur is dynamic and conceives new ideas to develop alternative projects. • of their products in the market.
  • 21. Types of Entrepreneur • Women Entrepreneurs: Women as entrepreneurs have been a recent phenomenon in India. The social norms in India had made it difficult for women to have a professional life. Now this has changed. Progressive laws and other incentives have also boosted the presence of women in entrepreneurial activity in diverse fields. In 1988, for the first time, the definition of Women Entrepreneurs’ enterprise was evolved that termed an SSI unit/industry- related service or business enterprise, managed by one or more women entrepreneurs in proprietary concerns, or in which she/they individually or jointly have a share capital of not less than 51 per cent as partners / shareholders / directors of a private limited company / members of a cooperative society, as a Woman Enterprise. • Social Entrepreneur: Social entrepreneur is one who recognizes the part of society which is stuck and provides new ways to get it unstuck. Be it dedicated efforts for child upliftment, fighting for the conservation of Assam’s rainforests, working for the betterment of the blind or initiatives to empower women, the entrepreneur’s passion is very strong. Freedom, wealth, exposure, social mobility and greater individual confidence are driving this huge wave of social innovation and entrepreneurship. After all are tired with the Inefficiency of governments and the indifference of corporate, and want to make a change and this is the case everywhere.
  • 24. Role of Entrepreneurs in Economic Development• Bringing Economic Growth and Prosperity: • Entrepreneur bring economic growth and prosperity in the country through generation of employment opportunities, capital and wealth creation, increasing per capita income and GDP, improvement in quality of life by raising the standard of living, growth of infrastructural facilities, forward and backward linkages in society, development of backward regions, economic independence. George gilder observes, “The ‘heroic creativity of entrepreneur came to seem essential to our economic well-being in a global economy”. Baumback and Mancuso write, “In underdeveloped nations, entrepreneurs often hold the key to economic growth for a whole society. So entrepreneur is not a dirty word or a fast buck opportunist, but, rather the backbone of the capitalist system”. • Bringing Social Stability and Balanced Regional Development: • Entrepreneurs play a crucial and unique role in bringing about social stability and balanced regional development through absorption of workforce in industries, removal of poverty, improving health and education facilities, creating fair competition, equitable distribution of income, creation of social infrastructures, empowering women and weaker sections of the society and supply of qualitative goods and services Although entrepreneurs are criticized as self interested exploiters.
  • 25. Role of Entrepreneurs in Economic Development • Innovator in Economic Growth: • by bringing new ideas, combinations, products techniques, organizations, new markets, making full use of technical knowledge, balanced growth, systematic innovation, technological advancement, implementation of mechanical skills, an entrepreneur play very crucial role in encouraging entrepreneurship and economic development. Peter Drucker writes, “Just as management has become the specific organ of all contemporary institutions and the integrating organ of our society of organizations, so innovation and entrepreneurship have to become an integral life-sustaining activity in our organizations, our economy, and our society”. • Increase Productivity with Modern Production System: Play an important role in raising productivity. John Keudrick writes, “Higher productivity is chiefly a matter of improving production techniques, and this task is the entrepreneurial function par excellence”. Two keys to higher productivity are research and development and investment in new plant and machinery. But there is a close link between R & D and investment programmes, with a higher entrepreneurial input into both”. George Gilder in The Spirit of Enterprise said that: “Entrepreneurs are innovators who evoke demand’. They are makers of markets, creators of capital, and developers of opportunity and producers of new technology.
  • 26. Role of Entrepreneurs in Economic Development • Creation of Employment Opportunities: Entrepreneurs play a significant role in generation of employment opportunities by establishing new units in manufacturing, trading and service sectors, laying emphasis on small scale industries, utilizing the surplus labour force in varied industrial and/or service activities, upholding self-employment as a core objective. Entrepreneur integrates resources and technologies into profitable business ventures and creates job opportunities. • Export Promotion and Import Substitution: Liberalization, privatization and globalization [LPG] has opened the arena of export promotion and import substitution to entrepreneurs by establishing industries producing import substitution goods, establish new industries, especially for export, products, exploration of new global markets, earning foreign exchange reserves, utilizing the available productive resources. • Entrepreneur Plays a Role of Catalytic Agent: • As Joseph Schumpeter says, entrepreneur’s task is “creative destruction”. He destroys to create new things. He changes and transmutes values. He searches change and responds to it. He is a change creator. Ralph Harwitz writes in his book Realities of Profitability’, “The entrepreneur makes a happening, wants piece of action, is the growth man. Without him there is no happening, no action, and no growth”. • 8. Augmenting and Meeting Local Demands: • Entrepreneurs also play a significant role in augmenting local demands and meeting them satisfactorily. Towards this entrepreneurs focus their attention to manufacture service through indigenous technology, skill, resources and experiences.