This deck covers the definition of Entrepreneurship and what is means according to various thinkers, and what implications it might have. This is the second deck. Part of the course on Entrepreneurial Management that I taught at Bangalore University last Spring (2014).

1. Management
01 - Entrepreneurship
Suhas Dutta

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Sir Richard Branson
on Entrepreneurship

3. Syllabus Coverage
• Introduction
o Meaning & Definition of Entrepreneurship, Entrepreneur & Enterprise
o Differences between Entrepreneurship, Entrepreneur & Enterprise
• Functions of Entrepreneur
o Role of Entrepreneur for Economic Development
o Factors influencing Entrepreneurship
o Pros and Cons of being an Entrepreneur
• Differences between Manager and Entrepreneur
o Qualities of an Entrepreneur
o Types of Entrepreneur
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4. Learning objectives
• Who is an entrepreneur and
o What are his /her functions, qualities,
contribution
o What are the types of entrepreneurs
o Distinction between a manager and
an entrepreneur
o Highs / lows of being an
entrepreneur
• What is entrepreneurship
o What influences entrepreneurship
o What are entrepreneurial
competencies and how can the be
developed
• EntrepreneurVs.
EntrepreneurshipVs. Enterprise
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5. Entrepreneur
• Credit for coining the term, generally, goes to the
French economist Jean-Baptiste Say,
o But in fact the Irish-French economist Richard
Cantillon defined it first
• Cantillon defined the term as a person who pays
a certain price for a product and resells it at an
uncertain price: "making decisions about
obtaining and using the resources while
consequently admitting the risk of enterprise."
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Entrepreneur is originally a
French word - an
individual who organizes
or operates a business or
businesses.
The word first appeared in
the French dictionary
entitled "Dictionnaire
Universel de Commerce"
compiled by Jacques des
Bruslons and published in
1723.

6. Definitions of “Entrepreneur”
1734: Richard Cantillon Entrepreneurs are non-fixed income earners who pay known costs of production but earn
uncertain incomes
1803: Jean-Baptiste Say An entrepreneur is an economic agent who unites all means of production- 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 rent of land, wages to labour, interest on capital and what
remains is his profit. He shifts economic resources out of an area of lower and into an area of
higher productivity and greater yield.
1934: Schumpeter Entrepreneurs are innovators who use a process of shattering the status quo of the existing
products and services, to set up new products, new services.
1961: David McClelland An entrepreneur is a person with a high need for achievement. He is energetic and a
moderate risk taker.
1964: Peter Drucker An entrepreneur searches for change, responds to it and exploits opportunities. Innovation is
a specific tool of an entrepreneur hence an effective entrepreneur converts a source into a
resource.
1975: Howard H. Stevenson
(HBS)
Entrepreneurship is the pursuit of opportunity without regard to resources currently
controlled.
1975: Albert Shapero Entrepreneurs take initiative, accept risk of failure and have an internal locus of control.
2013: Ronald May An Entrepreneur is someone who commercializes his or her innovation.
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7. Definitions of “Entrepreneur” (Contd.)
• The common elements are:
o Innovation
o Risk taking
o Commercialization
o New products / services
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8. Relevance of an entrepreneur
• The need arises from the need to speed up and activate the
factors of production
o Leads to economic growth
o Develops backward and tribal areas by creating employment
opportunities
o Improves the standard of living of the weaker sections of the society
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9. Relevance of an entrepreneur
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47
1
8
9 2
3
6 5
1 Commercializing new
inventions, develop
technologies
2 Re-structuring and
transforming the economy
3 Breathe vitality into large
organizations, serve the
government
4 Reduce ossification of social
institutions, and
concentration of economic
power
5 Make markets more
competitive, stabilise static
and dynamic market efficiency
Stimulate redistribution of
wealth, income and
political power
6
Improve social welfare of a
country by harnessing
overlooked talent
7
Create new markets and
facilitate international
expansion
8
Help in job creation, raise
productivity
9

10. Functions of an entrepreneur
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PUBLIC RELATIONS
PROJECT DECISION
RAISING FINANCE
PRODUCTION PLANNING
MARKET RESEARCH
RISK BEARING
INNOVATION
MANAGERIAL FUNCTIONS

11. Characteristics of a successful entrepreneur
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Hard work Self confidence
Ambition Independent
Innovation Involvement
Intelligence Initiative
Creativity Business secrecy
Foresight Accepting challenges
Communication ability Risk taking
Technical knowledge Motivating
Administration &
Organizational capability
Determination &
perseverance
Public relations Goal oriented

12. Qualities of an entrepreneur
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Motivation Dynamism Self confidence Ambition
Creativity Aptitude Intelligence Stress taking
Vision Adaptability Knowledge Clarity
Organising ability Will power Commitment Opportunity explorer
Pride Determination Instinct Integrity
Risk taking Tactfulness Foresight Dedication
Optimistic

13. Types of entrepreneurs
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Aggressive assemblage of ideas
Develops a business by novel combination of factors
INNOVATIVE ENTREPRENEUR
The adoptive entrepreneur
Imitates other successful models
IMITATIVE ENTREPRENEUR
Timid and cautious
Imitates other models carefully
FABIAN ENTREPRENEUR
Restricts entrepreneurial activity to one or two
innovations
DRONE ENTREPRENEURClarence H Danhof

14. Types of entrepreneurs (contd.)
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Little revolutionary, follows heuristics
EMPRICIAL ENTREPRENEUR
Qualified, well informed and introduces
revolutionary changes
RATIONAL ENTREPRENEUR
Timid, well informed and introduces some new
things after seeking advice and services of experts
COGINITIVE ENTREPRENEUR
Arthur H. Cole

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16. Types of entrepreneurs (contd.)
AREA Urban Rural
GENDER Male Woman
TECHNOLOGY Technical Non-technical Professional
BUSINESS Business Trading Industrial Corporate Agricultural
GROWTH Growth Super-growth
MOTIVATION Pure Induced Motivated Spontaneous
OWNERSHIP Private Public
DEVELOPMENT First generation Modern Classical
OTHERS Inherited Forced Immigrant
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17. EntrepreneurVs. Manager
Areas Entrepreneur Manager
Status Owner of the enterprise
Should be able to perform all
functions
Works for an enterprise
Appointed to manage
Risk Bears all risks No, or low risks
Motive Personal or social gain Renders service in lieu of
compensation
Rewards Rewards for risk bearing Salary as reward for work
Innovation Is the innovator Is the executor
Qualifications Should possess
entrepreneurial qualities
Should possess specific
qualification for the job
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The entrepreneur differs from the professional manager in that he undertakes a venture for his
personal gratification. Usually!

18. Women entrepreneurs
“A small scale industrial 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%
as partners /shareholders / directors of private
limited company / members of corporate
society”
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Ekta Kapoor
BalajiTelefilms
Shahnaz Hussain
Shahnaz Herbals
Swati Piramal
Piramal Healthcare
Kiran Mazumdar
Shaw
Biocon
Amira Shah
Metropolis
Healthcare
Sairee Chahal
Flexi-moms

19. Problems of women entrepreneurs
Problem of finance Low risk bearing capacity Limited mobility
Male dominated society Family involvement Competition
Lack of education Scarcity of raw materials Sexual harassment
Shortage of power High cost of production Recession
Initial hesitation and inhibition
Lack of experience and
information
Lack of freedom
Lack of encouragement False sense of security Fear of failure
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20. Pros and Cons of being an entrepreneur
Pros (Advantages) Cons (Disadvantages)
Love for doing independent business Risks
Self employment Time keeping
Source of income Long hours
Alternative wage employment Making decisions
Being one’s own boss Stress
Freedom
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21. Definitions of entrepreneurship
Source Definition
Knight (1921) Profits from bearing uncertainty and risk
Schumpeter (1934) Carrying out of new combinations of firm organization—new products,
new services, new sources of raw material, new methods of production,
new markets, new forms of organization
Hoselitz (1952) Uncertainty bearing...coordination of productive resources... Introduction
of innovations and the provision of capital
Cole (1959) Purposeful activity to initiate and develop a profit-oriented business
McClelland (1961) Moderate risk taking
Casson (1982) Decisions and judgments about the coordination of scarce resources
Gartner (1985) Creation of new organizations
Stevenson, Roberts, & Grousbeck (1989); The pursuit of opportunity without regard to resources currently controlled
Shane &Venkataraman (2000) A field of business seeks to understand how opportunities create
something new…
Kuratko & Hodgetts (2004) A dynamic process of vision, change and creation…
Allen (2006) A mindset or way of thinking that is opportunity focused, innovative and
growth-oriented. Can be found in large corporations and socially
responsible not-for-profits…
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22. Definitions of entrepreneurship (contd.)
• The common elements are:
o Creativity and innovation
o Resource identification, acquisition, and
marshaling
o Economic organization
o Opportunity for gain (or increase) under
risk and uncertainty
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23. Forbes 20 most promising entrepreneurs in Africa 2014
Christian Ngan SenaiWolderufael Eric Kinoti Nick Kaoma Ronak Shah
Cameroon
Madlyn Cazalis
(bio cosmetics)
Ethiopia
Feed Green Ethiopia
ExportsCompany
(spice blends)
Kenya
Shades System East Africa
(tenting)
South Africa
Head HonchoClothing
(apparel)
Kenya
Kronex Chemicals Ltd
(household cleaning
supplies)
Patrick Ngowi Heshan de Silva JulieAlexander
Fourie
Sangu Delle Uche Pedro
Tanzania
HelveticGroup
(solar power systems)
Kenya
DSGVenCap
(travel insurance with bus
tickets)
South Africa
iFix
(Apple, samsung phone
repair)
Ghana
Golden Palm Investments
(early stageVC)
Nigeria
BellaNaija
(new media)
Bankole Cardoso Isaac Oboth Barclay Paul Seth Akumani Jonathan Liebmann
Nigeria
EasyTaxi Nigeria
(Taxi mobile app)
Uganda
Media256
(telly production)
Kenya
Impact Africa Industries
(low cost sanitary pads)
Ghana
ClaimSync
(claims processing
software)
South Africa
Propertuity
(real estate)
IssamChleuh Tebogo Ditshego Tunde Kehinde Adii Pienaar Zaheer Cassim
Mali
Africa Impact Group
(socially relevant
investing)
South Africa
Ditshego Media
(PR firm)
Nigeria
Jumia Nigeria
(online retailer)
South Africa
Woothemes
(Wordpress themes,
plugins)
South Africa
OneWay Up Productions
(telly production)
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Of the next 10,
there are
5 Kenyans,
1 Nigerian,
2 Egyptians,
1 South African,
and
1 Cameroonian

24. Entrepreneurship – influencing factors
South
Africa, 7
Kenya, 9
Nigeria, 4
Egypt, 2
Ghana, 2
Tanzania, 1
Cameroon,
2
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25. Entrepreneurship – influencing factors
South
Africa, 7
Kenya, 9
Nigeria, 4
Egypt, 2
Ghana, 2
Tanzania, 1
Cameroon,
2
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ECONOMIC FACTORS
Capital
Labour
Raw Materials
Market
NON-ECONOMIC
FACTORS
Social Conditions
Social Mobility
Marginality
Security
PSYCHOLOGICAL
FACTORS
Need Achievement
Withdrawal of status /
respect
OTHER FACTORS
Availability – tech know
how
State of art / culture
Existence of market
Government policies

26. Entrepreneurship
• Entrepreneurship, is the control and deployment of resources
to create an innovative economic organization (or network of
organizations) for the purpose of gain or growth under
conditions of risk and uncertainty.
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INPUT
Resources
OUTPUT
Innovative
Economic
Organization
PROCESS
Control & Deployment
GAIN
and / or
GROWTH
UNCERTAINTY
RISK

27. Entrepreneurship – creation & innovation
• Schumpeter’s categories of “new
combinations” are:
o A new product or service offered?
o A new method or technology employed?
o A new market targeted and opened?
o A new source of supply of raw materials and
resources used?
o A new form of industrial organization
created? (rarest of all ?)
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28. Entrepreneurship – then and now
Then Now
Small-business founder
Boss
Lone Ranger
Secretive
Self-reliant
Seat of the pants
Snap decisions
Male ownership
True entrepreneur
Leader
Social and business networker
Open
Inquisitive
Business plan
Consensus
Mixed ownership
Idea Execution
Knows the trade Knows the business
Automation Innovation
Born with it Made with practice
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29. Entrepreneurial competencies
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The characteristics possessed by an entrepreneur which result in
superior performance are called “Entrepreneurial competencies”
Collection and retention of
information in one’s mind.
Entrepreneur also needs
skills to translate
knowledge into action
Ability to translate and
transform a system.
Both knowledge and skills
are needed.
Tool which helps in activating
goals. The concern of
achievement of goals leads a
person to perfection.
Knowledge
Skill
Motive

30. Entrepreneurial competencies (contd.)
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GOAL
ORIENTED
INDEPENDENT
COMMITTED
EFFECTIVE
STRATEGIST
PROBLEM
SOLVER
SELF
CONFIDENT
INITIATIVE
INFORMATION
SEEKER
OPPORTUNISTIC
QUALITY
CONSCIOUS
PERSISTENCE
EFFICIENCY
SEEKER
ASSERTIVE
EMPLOYEE
WELL WISHER
PERSUASIVE
PLANNER

31. Developing competencies
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Competencies
thru EDPs
Self
assessment
Feedback Practice

32. Discussion
• What is the relationship between an entrepreneur,
entrepreneurship and an enterprise?
• What could cause a discord between these three?
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Stranzex Consulting
O Bangalore, Mumbai & NCR Delhi
W 3nayan.in
E suhas@3nayan.in
Suhas Dutta
Experience . Agility. Passion