Entrepreneurial Management

The Entrepreneurial Perspective

Entrepreneur

Enterprendre French word- to undertake One who innovates, raises money, assembles inputs, chooses managers, sets organisation, with ability to identify them. Visionary and intergrated peroson with outstanding leadership qualities Desire to excel Priority to R&D

Who is Entrepreneur

A person who has possession of new enterprise venture or idea, Assumes significant accountability for the inherent risks and outcomes. Ambitious leader who combines land, labour & capital to often create & market new goods or services Undertakes an enterprise especially, intermediary between capital & labour.

Term Entrepreneur
1.
2. 3. 4.

Small industrialists Small business Traders Industrialists Engaged in

Manufacturing Distribution Service Founder-creator Risk-taker

Characteristics of Entrepreneur

Hard-work Desire for high achievement Highly optimistic Independence Foresight Good organiser Innovative Mental ability Clear objectives Business secrecy Human relations ability emotional stability,
personal relationship, consideration, tactfulness

Communication ability Technical knowledge Motivator Self-confidence Long-term involvement High energy level. Administrative ability Organisational skills Intelligence Creativity Persistent problem- solver Goal setter Moderate risk taker

Functions of an Entrepreneur

Idea generation & scanning of suitable idea Determination of business objective Product analysis & market research Determination of form of ownership Completion of promotional formalities Raising necessary funds Procuring machine and material Recruitment of men Undertaking business organisation

New concept of Entrepreneur

Perceives opportunities for profitable investments. Explores prospects of starting manufacturing enterprise. Obtains industrial licenses Arranges initial capital Provides personal guarantees to financial institutions Meets shortfall of capital Supplies technical know-how

Indian Entrepreneur
Jamsetji Tata Jamnalal Bajaj Laxmanrao Kirloskar Ghanshyamdas Birla

Visionaries, builders, thinkers, scientists

Types of Entrepreneurs

Innovative Entrepreneurs

New goods, new method of production, discovers new markets, reorgaises enterprise Adopt innovations by innovating entrepreneurs. imitates only when, failure to do so will result in loss of relative position in enterprise Refuse to adopt different opportunities or changes Work alone Enterprise as joint venture Interest in research & innovative activities Enter because of challenges present in market Buy ongoing ones Family enterprise, business

Imitative Entrepreneurs

Fabian entrepreneurs Drone Enterprise

Solo operators
Active partners Inventors Challengers Buyers Lifetimes

Key Element for Entrepreneurship

1.
2. 3. 4.

Innovation Risk-taking Vision Organising skill

Inter-related Continuous process in business Pursuit for operational excellence Innovative technology Being responsive to market place

Entrepreneurial Behaviour

Grasping opportunity Take initiative Solve problems creatively Managing autonomously Responsibility & ownership Seeing things through Judgement to take calculated risk Manage interdependence

Entrepreneurial Attributes
Achievement Orientation & ambition Self confidence & self esteem Perseverance Action orientation Hard-working Determination creativity

Entrepreneurial Skills
Problem solving Persuading Negotiating Selling Strategic thinking Intuitive decision-making under uncertainty networking

Intrapreneur

An Emerging groups of persons left big corporations & started their own small business in America either because their ideas were not accepted by their top bosses or because ideas were innovative enough to offer ample scope of making profit.These persons turned to entrepreneurs & achieved great success in their new ventures. These entrepreneurs came to be known as intrepreneur.

Entrepreneur/Intrapreneur

Independent Raises funds on his own initiative Takes profits of the business Bears the full risk of business Real owner of business Operates from outside the organisation Converts the ideas of Intrapreneur into viable opportunities

Semi-independent- on the owner Depends upon the industry in which he works for getting finance Does not take profit out of innovations but he can be provided with a variety of perquisite for their innovations Bears the risk of the business which is small part of the entire business Not the real owner of the business, rather he works for the business Operates within the organisation Takes responsibility of creating innovation of any kind from within the organisation

Entrepreneurship

Is a process undertaken to augment his business interest Is a composite skill, the resultant of a mix of many qualities and traits, include tangible factors as imagination, readiness to take risk and bring together and put to use other factors of production, capital, land, labour as also intangible factors & to mobilise scientific and technological advances.

Concept

Entrepreneur
Person

Entrepreneurship
Process

of action

Enterprise
object

Entrepreneurial Process

1.

2. 3.

4.

Leadership function which centres around dynamics of entrepreneurial growth and change. Stages Change in socio economic environment leading to changes in aspect of life creating needs for new goods and services. Starting new venture Intrapreneurship extend entreprises through new combination and exploiting new opportunities. Coordinating various activities to achieve entrepreneurial goal.

Entrepreneurial structure

Structure represents formal, official task relationship of people in entrepreneurial activities. Entrepreneurial activities policies, programmes, practices & measurement for innovation & growth. Planning, directing, controlling, marketing, leading, motivating , channelising activities Entrepreneurial goal.

Relationship entrepreneur/entrepreneurship

Person Organiser Innovator Risk-bearer Motivator Creator Visualiser Leader Initiator Technician Decision maker Planner administrator

Process Organisation Innovation Risk-bearing Motivation Creation Vision Leadership initiative Technology Decision Planning administration

Entrepreneur/Manager

Motive to start venture Status owner of enterprise Risk-bearing assumes all risks and uncertainty Rewards profits Innovations Qualifications high achievement motive, originality thinking, foresight, risk-bearing..

Motive is to render service Service of enterprise Does not bear any risk Salary certain and fixed Only executes the plans. Distinct qualificationsmanagement theory & practice

Entrepreneurs + factors of environment

Socio-economic environment Family background Standard of education and technical knowledge Financial stability Political stability and government policy Caste and religious affiliation Personality and personal skill Achievement motivation

Barriers to entrepreneurship

Market knowledge Technical skills Seed capital Business know-how Motivation Social stigma Lack of viable concept Times presence and distraction Legal constraints and regulations Monopoly and protectionism Inhibitions due to patents

Entrepreneurship - economic development

Promotes capital formation by mobilising idle saving Large scale employment reduce unemployment (major socio-economic problem) Balanced regional development Reduce the concentration of economic power Effective resource mobilisation of capital and skill Induces backward and forward linkages stimulates process of economic development Promotes country export An economy is the effect for which enterpreneurship is the cause

Characteristic of an ideal entrepreneur

Creativity Innovation Dynamism Leadership Team building Achievement, motivation Problem solving Goal orientation Risk taking & decision making ability.

Entrepreneurial skills
Technical skills Behavioural skills Conceptual skills Economic business skills Evaluating skills Implementing skills

Characteristics of intrapreneurial environment

Innovative ideas Encourage experimentation Initial opportunity parameter Availability of resources Encourage team work Evaluation No force Reward Alteration Support of top management

Intrapreneurial Qualities

Innovator Visionary Knowledgeable Flexibility Encourage team work Diplomatic Open to discussion & idea motivator

Intrapreneurs characteristics
Self motivated Self-confident & courageous Freedom Education Systems

Classification of Intrapreneur

Innovating, marketing, technical , manufacturing, financial service

Nature & importance of entrepreneurs

For growth, on going basis Rapid growth of employment & incomes

Analysis of nature & importance of entrepreneurs

Entrepreneurial qualities innate

Enhanced

by training, experience Indispensable quality imagination

Foresight Delegation skill & organizational skills

Entrepreneurial Functions

Product Development & organisation structure

Carries

activities of business New ideas, demand & exploit opportunities

Recognises commercial potential of product or service, design operating policies in marketing, production

functions
1.

Assumption of risk
Assumes all risk of business problems Taste of consumers, new inventions in market. Reduce them by initiative, skill, good judgement

2.

Business decision
nature /type of business decide Best prospects & produce..

3.

Managerial functions
Formulates production plan Finance Purchase of RM Production facilities Sales management Performs entrepreneurial function but different from managerial function.

Decision Maker

Develop of organisation, relation with employees/subordinates Adequate financial resources Good relation with existing & potential investors Determination of objective & if any changes required Use of efficient technological equipment Develop market for products Good relation with public authorities & society

Entrepreneurial decision
Despite recession, inflation, high rate of interest, lack of infrastructure, economic uncertainity etc. Stimulation for change comes from negative force- disruption

Women Entrepreneurs
US 25% of the business 1/3 in canada 1/5 France

Women Entrepreneur

Retail trade, restaurants, hotel, education, cultural, cleaning, insurance & manufacturing.

Leadership qualities

Accept challenges Ambitious Drive Enthusiastic Hardwork Patience Industrious Motivator skilful

Unquenchable optimisim Adventurous Conscious Determination to excel Keenness to learn Experienced Intelligent Perseverance studious

importance
Generating employment in unorganised sectors Status of women

Function & role of women entrepreneur

Prospectus of starting a new enterprise New innovations or invitation of successful one. Undertaking risks & handling of economic & non economic uncertainties Co-ordination, administration & control Supervision & provide leadership.

Development of women entrepreneur

new industrial policy Product and process oriented courses. Upliftment of status in economic and social field. Providing of credit facility with concession terms and on priority basis.

Common features of women entrepreneurs in india

Majority are married Unmarried women face financial difficuties Low income group Small families women Lack vocational training Economic necessity Gender discrmination Prefer diversification to specialisation Security oriented > growth oriented Stabilisation of income & minimisation of risk maximisation of income

Problems faced

Family responsibilities Social attitude Low mobility High cost of production Lack of education Low need for achievement Shortage of finance Inefficient arrangement for marketing and data Shortage of raw materials Stiff competition

WOMEN ENTREPRENEURSHIP DEFINED

Definition An enterprise owned and controlled by a women having a minimum financial interest of 51 per cent of the capital and giving at least 51 per cent of the employment generated by the enterprise to women, Government of India

A woman entrepreneur can be defined as a confident, innovative and creative woman capable of achieving self economic independence individually or in collaboration, generates employment opportunities for others through initiating, establishing and running the enterprise by keeping pace with her personal, family and social life. Kamal Singh

Factors Influencing Women Entrepreneurs

Economic independence Establishing their own creativity Establishing their own identity Achievement of excellence Building confidence Developing risk-taking ability Motivation Equal status in society Greater freedom and mobility

Strategies for development of women entrepreneurs.

Education and awareness Better time management Set-up home based business Efficient use of information techonology Organise workshops and seminars Group entrepreneurship Simplified procedures Dispense collateral security Finance cells

 Women with small families are more likely to become entrepreneurs. A majority of women entrepreneurs are married. Unmarried women face difficulties in getting financial support to launch their enterprises. Many women entrepreneurs belong to the low-income group. A large number of women with little or no education enter Into business without undergoing any training. Most of these practicing women entrepreneurs lack vocational education. Working capital Is limited and profit margins are low. Women from the low-income group exercise greater freedom in making the decision to start business as compared to middle-class women who suffer from cultural constraints. Many women become entrepreneurs out of economic necessity. Womens hard work Is generally responsible for the launch and sustainability of the business. Support systems do not effectively handle their important need for vision and confidence building and also for developing better business orientation and skills. Gender discrimination Is encountered at every stage of business development. Women entrepreneurs are security oriented rather than growth oriented. Women prefer diversification to specialization. Women prefer stabilization of income and minimization of risk over maximization of income. Though the trend Is changing, It is not uncommon to find enterprises owned by women but run by men. In the field of technology women have made a conscious decision to set up technology-based enterprises. Many have ventured Into hi-tech areas such as manufacturing solar thermals, vacuum reactors, television boosters, air compressors1 voltage stabilizers, and amplifiers as reflected In the data collected about women entrepreneurs. However, for most women their businesses remain micro-enterprises.

Common Features of Women Entrepreneurs in India

WOMEN ENTREPRENEURSHIP ENVIRONMENT

context of women entrepreneurship development described in three different spheres Micro sphere Meso sphere Macro sphere

Micro sphere

In many South Asian countries, women experience an unequal power relationship with men which is often reflected in persistent inter-family inequalities in the distribution of tasks. Male possessiveness and dominance also weakens a womens extra household bargaining power. This amounts to deprivation of influence at all levels. Gender relations also determine the ascription to men and women of different abilities, attitudes, desires, personality traits, behavior and so on. These factors are seen to be important in women entrepreneurship development.

Organisation tend to militate(fight) against women and their economic empowerment, as most are based on path lineal and paralegal relationships where women rarely have access to property succession rights from fathers or husbands; where a women moves and lives close to the husbands place of work; and where a woman is obliged to live close to the husbands family, even, if he has passed away. In the household where women are expected to carry out the household work, childcare and other tasks also restrict their economic opportunities. The requirement that women stay close to home inevitably limits their potential to operate in business, involving as it does travel, even over short distances, to procure supplies and meet customers. This is another strong reason for disempowerment of women entrepreneurship.

Meso sphere

There are a large number of organisations involved in providing support services to entrepreneurs. However, for a variety of reasons, many of the organisations tend to act as barriers when it comes to providing assistance to women entrepreneurs. In some cases this can be attributed to a lack of awareness about womens concerns and insensitivity towards gender issues. It is at the meso level that it is found that the lack of support for women entrepreneurs by many of the organisations which implement poLicies and operational programmes contribute greatly to their continuing disempowerment. The State might formulate gender progressive laws and policies, but the resistance offered by the bureaucracy, judiciary and other such official organisations, might hinder the implementation of these measures.

Macro sphere which women entrepreneurs The macro environment within

develop and grow comprises many interconnecting structures and dynamics, including laws and regulations, economy, international trade, including market liberalisation and globalisation, availability of finance and credit, labour market, human capital resources, technology, physical infrastructure and natural resources. This environment has an impact on all enterprises, large and small, run by both women and men. There is much evidence to indicate that women are more at a disadvantage than men in relation to the opportunities and barriers arising from these structures and dynamics. It is partly because womens ability to bargain in the labour market, as in other arenas, is critically affected by predominant gender ideology and practices. Bargaining takes place over wages, conditions of work, and workers rights. However womens bargaining power in the work place, as compared to that of men, is constrained not only by gender gaps in skills and education, but also by the employers assumption regarding their abilities, work commitment, efficiency, and needs, which is further exacerbated by the unequal sharing of family responsibilities at the micro level. This contributes towards disempowermnent of women.

STRATEGIES FOR THE DEVELOPMENT OF WOMEN ENTREPRENEURS

In small and medium enterprises due to limited sources, majority of the functions have to be performed by the owners themselves. In case of women entrepreneurs, the problems get compounded because certain functions have gender dimensions attached to them. Domestic commitments and child-care support are the two main responsibilities of women. This, along with the still narrow outlook of society in accepting woman as an entrepreneur makes her life more difficult. Some suggestions to meet these challenges and to encourage women entrepreneurship are given below.
To overcome the resistance from husband and members of the family at the time of setting up of their venture, prospective women entrepreneurs are advised to maintain their cool and persistently convince them, without confronting them, regarding the benefits of setting up of an enterprise. The woman requires to have a strong will power under the circumstances, The inflow of money will eventually solve this problem. Shouldering the dual responsibilities of an entrepreneur and a homemaker can be effectively undertaken by a women entrepreneur through better time management. The members of the family can also be involved in the business. which will help in sharing the burden of entrepreneurial work. Moreover, the women entrepreneur must try to make her husband and children self-sufficient at home. With tact and diplomacy, she should solicit cooperation in running the enterprise from the family.

women can start her business when her children are grown up enough to take care of their own small needs. This gives the women enough time enough to manage her enterprise. Women must acquire education and go through confidence-building training to get rid of the traditional feeling that they are inferior to men and are dependent on men. For marketing her products, a women entrepreneur must establish her credibility in terms of quality and competitiveness of product or service. She should acquire relevant techniques and skills to win customers loyalty. Ecommerce businesses will also help greatly in this regard. For publicity and advertisement, the women entrepreneur can work on alternatives like cable TV, pamphlets, leaflets, slides in cinema halls, banners at strategic locations, and so on. Effective and efficient use of information technology like the Internet can help in assimilating information about the variety, range, and quality of say competing products, and publicity and marketing of products and services. Workshop and seminars should be organised frequently for the officials of financial and support agencies and for women entrepreneurs to make their relations more cordial. Procedures for financial assistance by banks and government organisations must be simplified. Women inspectors, if available, should be asked to inspect women enterprises. It has been observed, that there is a tendency to project a higher value of sales, production, and profits in project reports to impress the bankers. Such a project profile is not appropriate from a financial management point of view. So. women entrepreneurs need to undertake training in various aspects of financial management to understand its finer implications.

 Since complicated and lengthy procedures make it difficult to acquire loans from government financial agencies and banks, it is suggested that women entrepreneurs search for non-formal sources of finance like private financiers, relatives, friends, and others. Banks and financial institutions must maintain a minimum target of loan to be disbursed to women entrepreneurs. Collateral security should be dispensed with in the case of women entrepreneurs because many women hardly have any property or other assets in their name to keep as guarantee. Margin money for projects to be undertaken by women entrepreneurs should not exceed 10 per cent. Subsidies should also he given to women entrepreneurs at the initial stage itself. Women entrepreneurs should acquire relevant training in technology and in details of their plant and machinery. They should be knowledgeable about the functioning of machines and processes. They should be more assertive with their employees. They should employ more women workers in their enterprises. They must undergo training in management skills to handle human resources as well as training in effective communication skills and practices and the legal aspects of running a business. Group entrepreneurship is a viable option for the weaker sections of the society and it helps woman to overcome their poverty. It empowers women and provides the necessary confidence for entrepreneurship. Womens organisations. womens cooperatives, and NGOs should be promoted to assist self- employment for poor women.

Institutions supporting women entrepreneurship

In India are: Consortium of Women Entrepreneurs of India (CWEI), Federation of Indian Women Entrepreneurs (FIWE), Federation of Ladies Organisation (FLO), Womens India Trust (WIT), Central Bank of India Credit Schemes, National Bank for Agriculture and Rural Development (NABARD). State Government Schemes for Development of Women and Children In Rural Areas (DWCRA). Small Industries Development Bank of India (SIDBI), Self-Employment Women Association (SEWA), Association of Women Entrepreneurs of Karnataka (AWAKE).

International Entrepreneurship Opportunities

International business means Cross border business translations International business entails satisfying different needs or tastes or preferences of people in different countries.
Thus, simple and common definition of international business is that it is business across national borders. As includes exports and import to goods and services or international sourcing of factors

BENEFITS OF INTERNATIONAL BUSINESS OPPORTUNITIES

Competing in the global marketplace benefits, such as. I. Increased sales: The entrepreneur will attract new buyers and widen the customer base. He may also import unique products that local customers can buy 2. Reduced cost: The entrepreneur may sell the goods at reduced price. Manufacturers in other countries can produce goods at a lower cost because of low labour cost or availability of raw materials. 3 decreased dependence on current markets and suppliers: When the economic conditions of a country suddenly change workers. exports might help to sell the products and services abroad till the economy stabilize. 4. achieving higher rate of profit : When the domestic market do not provide a higher rate of profits, the entrepreneur can expand the operations to foreign countries where there is higher rate of profit 5. limited home market: Due to the size of population or due to lower purchasing power of the people etc.. size of the home market becomes limited. under such circumstances entrepreneur has no option other than exports. Example European countries. 6. Severe competition in the domestic market: When there is severe competition from the other competitors in the domestic country. it may not be possible to survive for a long period. The best option is to enter the new markets . 7, Availability of technology & managerial competence: When the availability of technology and managerial skills are lacking in some countries the entrepreneur prefers to so abroad to set that benefit 8, To increase market share: To larger companies expand their business operation abroad to increase the market share. Example Coca-cola. Pepsi. unilever etc.

9. availability of raw material : One of the major reasons for attracting the companies from other countries is the availability of raw-material abundantly in a country Example: Minerals. Petroleum etc. I0. availability of human Resources: When there is quality human resource available in a country at a lesser cost, the entrepreneur prefers to start the operations in that country Example: Software industry

II. Tarrifs and import quotas: Imports of products

depends on the governments policies towards tariffs or duties and import quotas to reduce the competition to the domestic companies from foreign companies Therefore, there is an opportunity to the entrepreneur the country where there is no such, restrictions. 12. Political stability There is bright business opportunities in those countries where there is Continuation of same policies of the government. even there is change of political parties

MODES OF INTERNATIONAL BUSINESS OPPORTUNITIES

International trade is one way the entrepreneur can become part of the global marketplace. he can export or import the products or services

Modes of international entrepreneurship opportunities. A, General Classification I Importing 2. Exporting B. Non-equity Arrangements 3, Licensing 4. Turn-Key Project 5.Management Contracts C. Direct Foreign investment 6. Minority Interest 7. Majority Interest 8. 100% ownership 9. Joint Ventures D. Mergers & Acquisitions
Horizontal Vertical Product extension Diversified activity

E. II. Using world wide web F Other modes

12. Strategic alliance 13. Third country location 14. Counter trade

I. Importing:. import products due to reasonable price and good quality.

to make their own products

2. Exporting: Direct export Indirect export

Advantages: Licensing arrangement is an excellent method. I. The process is loss risk. 2. Need not make an extensive capital investment. 3. Can generate savings in tariff and transportation cost. 4, Licensing is a more realistic means of expansion than exporting. particularly for the high-tech firm 5, Access to the market is easier in comparison with equity instruments. 6 Foreign governments are more likely to give their permission because technology is being brought into the country 7. There is potential for the licensees to become partner and contributor in improving the learning curve of technology.

Disadvantages: I. It is possible the licensee will become a competitor after the contract expires. honda is a competitor of kinetic. 2. To fit the licensee market. the licenser must set the licensee to meet contractual obligations and adjust the products & services. 3. Conflicts and misunderstanding may occur. Therefore the entrepreneur must manage the relationships. 4. There may be a problem of integrity and independence of both the licenser and licensee.

Entrepreneurial Development Programme

Designed to help strengthen & fulfill his entrepreneurial motive, Acquire skills & capabilities To develop first generation entrepreneurs 3 major variables location, target group, and enterprise. Continuous process of training & motivating

Objectives of EDP
To develop small & medium enterprise, Encourage self- employment To stimulate new ventures& encourage expansion by special programme for rural areas. Create employment opportunities in processing of indigenous raw material Develop potential entrepreneurs and upgrade managerial skills.