Chapter 1

Concept, Meaning and

Definition
of Entrepreneur and
Entrepreneurship

ENTREPRENEUR

MEANING OF ENTREPRENEUR

The word entrepreneur is derived from the French word

Enterprendre it means to undertake and literally translated
means Risk - taker.
Entrepreneur is an individual who takes risk and starts
something new.
In Simple Words, entrepreneur is a person who establishes
his own business with a view to earn profit.
He is a moderate risk taker and works under uncertainty for
achieving the goal.
He is innovative
He peruses the deviant pursuits
Reflects strong urge to be independent.

MEANING OF ENTREPRENEURSHIP

Entrepreneurship is the process of creating something

new of value by devoting (giving) the necessary time and
effort.
By accepting and acknowledging the necessary financial,
psychological, and social risks, and
Finally receiving the resulting rewards be it monetary and
personal satisfaction and freedom to do what you want.
Robert D.Hisrich, M. Peters & D.A Shepherd
Simple Definition
Process of creating something new and assuming the
risks and rewards.
Robert D.Hisrich, M.P.Peters &
D.A.Shepherd

ENTREPRENEU
Entrepreneur

Entrepreneurship

Person

Process

Visualizer

Vision

Organizer

Organization

Decision maker

Decision Making

Innovator

Innovation

Risk bearer

Risk bearing

Motivator

Motivation

Creator

Creation

Leader

Leadership

Manager

Management

Initiator

Initiation

Planner

Planning

Technician

Technology

Communicator

Communication

Administrator

Administration

CHARACT

1. INNOVATION:
. A businessman, who simply behaves in traditional ways,
cannot be an entrepreneur.
. Innovation is a key to succeed in the todays competitive
market.
.
Innovation involves finding out solution for various
problems.
. An entrepreneur solves those problems by introducing
something new in the economy.
2. MANAGERIAL SKILL AND LEADERSHIP ABILITY:
. Managerial skills and leadership are the most important
facets of entrepreneurship.
. A successful entrepreneurship is well versed with the
ability to lead and manage.
3. High Achievement:
. McClelland identified two features of entrepreneurship,
(a)doing things in a different and better way;
(b) decision making under uncertainty.

CHARACT

4. GROUP ACTIVITY:
. Entrepreneurial characteristics are found in clusters which
may qualify themselves as entrepreneurial groups.
. In many situations it is generalized by the particular
family, background, experience as a member of groups
and as a reflection of general values.
5. CONTINEOUS PROCESS:
. Entrepreneurship is a distinct process of developing and
implementing new business ideas. E.g. Development of
new products, services, processes etc.
.
An entrepreneur works continuously which involves
different managerial functions planning, organizing,
directing etc.
6. RISK AND REWARDS:
. An entrepreneur accepts risks and uncertainties which
are unavoidable part of his work.
. If the new business idea, becomes successful, and
entrepreneur gets positive returns in the form of

CHARACT

7. COMMUNICATION:
Good communication ability is essential to succeed in the
business.
An entrepreneur who can communicate effectively with
different stakeholders will be able to serve best to them
and this would help him to achieve goals and objectives.
8. PROBLEM SOLVING ABILITY:
.
An entrepreneur should focus on dedication and hard
work.
. Entrepreneurship is the ability of accepting challenges as
an opportunities and potentialities.

1. Ambitious:
. They actively seek out problems, and have the ambition to
fix them.
. Doing so comes to them as a habit; it is their state-ofmind.
. Everyone doesnt have this ambition, and this is one
quality that defines an entrepreneur.
2. seek-out opportunities:
. One of the thing that defines an entrepreneur is his/her
ability to search for potential opportunities.
. Because that is what being an entrepreneur is all about:
finding potential problems and opportunities, and providing
real, tangible solutions to these problems.
. Identifying or discovering an opportunity comes naturally
to them, and it is actually a big part of being an
entrepreneur in the first place.
3. Risk Bearer:
.Good entrepreneurs dont fear taking risks, they take them

4. Knack for innovation and creativity:

. Successful entrepreneurs can usually be identified by their
ambition to innovate this involves developing new ideas,
methods, processes, products, services, and above all, new
solutions that meet new requirements and provide more value
to stakeholders.
.

successful in business relies upon improvement and positive

change, and all good entrepreneurs have the vision to be
creative and innovative in order to bring about this sort of
change and improvement.

5. Excellent role models:

. These role models are people that they aspire to be, people
that they look up to, and people who provide them with
inspiration and the guidance that they need to be successful.
.

. A role-model could be anyone such as someone from within

your social circles, friends or family, or a famous personality
who they look up to (Steve Jobs, Michael Dell, Richard Branson,
Bill Gates all come to mind here and are just a few examples).

6. Leaders:
. Successful entrepreneurs are natural leaders, and
possess many leadership qualities.
. They are good at managing all aspects of their
professional and personal lives.
. They have the ability to make big decisions, and the right
decisions.
. They are people-oriented, and can get a group of people
to work towards the attainment of a common goal while
getting the best out of them. They are respected by their
peers.
7. Learning Attitude:
.
Entrepreneur is ever ready to learn more i.e. new
information, new processes, new techniques, of
production and so on.
. They challenge themselves to learn more and to do
more.
8. Other factor:

Chapter 2
Concept of
intrapreneur

CONCEPT OF INTRAPRENEUR
DEFINITION:
1. An inside entrepreneur, or anentrepreneurwithin a large
firm, who uses entrepreneurial skills without incurring
the risks associated with those activities.
2. Intrapreneur are usually employees within a company
who are assigned a special idea or project, and are
instructed to develop the project like an entrepreneur
would.
3. Intrapreneur usually have the resources and capabilities
of the firm at their disposal.
4. The intrapreneur main job is to turn that special idea or
project into a profitable venture for the company.

CONCEPT OF INTRAPRENEUR
Characteristics and skills necessary for becoming a
successful intrapreneur include:
Knowledge of the internal and external environment.
Visionary and willing to challenge the status quo.
Diplomatic and able to lead cross-functional teams.
Ability to build a professional-support network.
Ability to persevere, even in the face of uncertainty.

Differences

Entrepreneur
Intrapreneur
An entrepreneur is independent in his operations An intrapreneur is dependent
entrepreneur, i.e. the owner.

on

the

Dependency
An entrepreneur himself raises funds required Funds are not raised by the Intrapreneur.
for the enterprise.
Raising of Funds
Entrepreneur bears the risk involved in the An intraprenuer does not fully bear the risk
business.
involved in the enterprise.
Risk
An entrepreneur operates from out side

On the contrary, an intraprenuer operates from

within the organization itself.

Operation
An entrepreneur begins his business with a An intrapreneur sets up his enterprise after
newly set up enterprise.
working someone elses organization.
Orientation
Popularity of the Entrepreneur is a popular concept in business An Intrapreneur in many cases has to rely on
concept
world
the decision of top management.

Experience
Freedom to Act

As an entrepreneur establishes new business, so An intrapreneur establishes his business after

he does not possess any experience over the gathering experiences through working in the
business.
other organizations.
An Entrepreneur has freedom to act on his or Intrapreneur needs to ask for management
her whim
approval to make any changes in the
companys processes, products, design etc.

Classification on the basis of:

Type of business

Use of Technology

Motivation

Growth

Stages in Development

Others

ACCORDING TO BUSINESS
Business entrepreneur: Convert ideas into reality; deal
with both manufacturing and trading aspect of business
(Small trading and manufacturing business)
Trading entrepreneur: Undertakes trading activities;
concerned with marketing (Domestic and international
level)
Industrial entrepreneur: Undertakes manufacturing
activities only; new product development etc (textile,
electronics, etc)
Corporate entrepreneur: Interested in management part
of organisation; exceptional organizing, coordinating
skills to manage a corporate undertaking (Ambani, Tata
families)
Agricultural entrepreneur: Production and marketing of
agricultural inputs and outputs (Dairy, horticulture,
forestry)

ACCORDING TO TECHNOLOGY
Technical entrepreneur: Production oriented, possesses
innovative skills in manufacturing, quality control etc.
Non technical entrepreneur:
distribution facilities and strategies

Develops

marketing,

Professional entrepreneur: Uses the proceeds from sale

of one business to start another one. Brimming with ideas to
start new ventures

ACCORDING TO MOTIVATION
Pure entrepreneur: Psychological and economic rewards
motivate him
Induced entrepreneur: Incentives, concessions, benefits
offered by government for entrepreneurs motivates him
Motivated entrepreneur: Sense of achievement and
fulfillment motivate him
Spontaneous entrepreneur: Born entrepreneurs with
inborn traits of confidence, vision, initiative

ACCORDING TO GROWTH
Growth entrepreneur: One who enters a sector with a
high growth rate; is a positive thinker
Super growth entrepreneur: One who enters a business
and shows a quick, steep and upward growth curve

ACCORDING TO STAGES IN
DEVELOPMENT
First generation entrepreneur: Innovator, risk taker,
among the firsts in family to enter business
Modern entrepreneur: Who considers feasibility of
business, which can adapt to change and dynamic market
Classical entrepreneur: One who gives more importance
to consistent returns than to growth; concerned about
customer and marketing needs

ACCORDING TO OTHER TYPES

Area- Rural and Urban entrepreneur
Gender/Age- Men and Women entrepreneur
Scale- Small and Large scale entrepreneur

Chapter 3
WOMEN
ENTREPRENEUR

 Women entrepreneurs may be defined as a Woman or a

group of women who initiate, organize and run a business
enterprise.
Government of India has defined women entrepreneurs
based on women participation in equity and employment of
a business enterprise.
Accordingly, a woman run a enterprise is defined as an
enterprise owned and controlled by a women having a
minimum financial interest of 51% of the capital and giving
at least 51% of the employment generated in the enterprise
to women.
Women entrepreneur constitute 10 % of the number of the
number of entrepreneur in the country.

 This has been a significant growth in self-employment of

women with women now starting new ventures at three
times the rate of men.
They constitute 50% of the population of our country with
a lower literacy rate than men. This statistical fact indicates
that for the economic growth of the nation, women should
not be encouraged to make their share of economic
contribution towards the country.
One way of achieving is by making women come out and
become entrepreneurs. In the traditional society, they were
confined to the four walls, playing household roles, but in
the modern society, they are coming out to participate in all
sorts of activities.
Normally, women entrepreneurship is found in the
extension of their kitchen activities, mainly in preparing
commercially the 3Ps namely, Pickles, Papads and
Powder. Few of them venture into services industry relating

FEATURES OF WOMEN ENTREPRENEUR

1. Management and Control:
A woman or a group of women manages the whole business
of enterprise. She prepares various plans and executes
them under her own supervision and control. There may be
some persons to help her but ultimate control lies with the
woman.
2.Self confidence:
It is essential to be a self confident for a woman
entrepreneur. She should have faith in herself and in her
abilities. She should have the confidence to implement the
change and overcome any resistance to change. A woman
entrepreneur should have courage to own the mistakes and
correct them.
3. Visionary:
A woman entrepreneur is one who incubates new ideas,
starts her enterprise with these ideas and provides added
value to society based on their independent initiative.

FEATURES WOMEN ENTREPRENEUR

4. Hard worker:
A distinguishing feature of a woman entrepreneur is the
willingness to work hard. She has to follow the principle, Hardwork is the key to success.
5. Leadership:
Leadership quality is one of the most important characteristic of a
woman entrepreneur. It is the process of influencing and
supporting others to work enthusiastically towards achieving
objectives.
6. Bold and brave:
Women entrepreneurs face the adversities boldly and bravery. She
has faith in herself and attempts to solve the problems even under
great pressure.
7. Achievement oriented:
A woman entrepreneur is an achievement oriented lady, not
money hungry. She works for challenge, accomplishment and
service to others. Achievement orientation is a derive to overcome
challenges, to advance and to grow.

PROBLEMS FACED BY INDIAN W

1 Family ties:
Women in India are very emotionally attached to their families.
They are supposed to attend to all the domestic work, to look after
the children and other members of the family.
They are over burden with family responsibilities like extra
attention to husband, children and in laws which take away a lots of
their time and energy.
In such situation, it will be very difficult to concentrate and run the
enterprise successfully.
2. Male dominated society:
Even though our constitution speaks of equality between sexes,
male chauvinism is still the order of the day.
Women are not treated equal to men. Their entry to business
requires the approval of the head of the family. Entrepreneurship
has traditionally been seen as a male preserve.
All these puts a break in the growth of women entrepreneurs.

PROBLEMS FACED BY INDIAN W

3. Social barriers:
The traditions and customs prevailed in Indian societies
towards women sometimes stand as an obstacle before
them to grow and prosper.
Castes and religions dominate with one another and hinders
women entrepreneurs too.
In rural areas, they face more social barriers. They are
always seen with suspicious eyes.
4. Shortage of raw materials:
The scarcity of raw materials, sometimes nor, availability of
proper and adequate raw materials sounds the death-knell
of the enterprises run by women entrepreneurs.
Women entrepreneurs really face a tough task in getting the
required raw material and other necessary inputs for the
enterprises when the prices are very high.

5. Problem of finance:
Women entrepreneurs stiffer a lot in raising and meeting
the financial needs of the business, Bankers, creditors and
financial institutes are not coming forward to provide
financial assistance to women borrowers on the ground of
their less credit worthiness and more chances of business
failure.
They also face financial problem due to blockage of funds in
raw materials, work-in-progress finished goods and nonreceipt of payment from customers in time.
6.Tough competitions:
Usually women entrepreneurs employ low technology in
the process of production.
In a market where the competition is too high, they have to
fight hard to survive in the market against the organised
sector and their male counterpart who have vast experience
and capacity to adopt advanced technology in managing

7. High cost of production:

Several
factors
including
inefficient
management
contribute to the high cost of production which stands as a
stumbling block before women entrepreneurs.
Women entrepreneurs face technology obsolescence due
to non-adoption or slow adoption to changing technology
which is a major factor of high cost of production.
8. Limited mobility:
Women mobility in India is highly limited and has become a
problem due to traditional values and inability to drive
vehicles.
Moving alone and asking for a room to stay out in the night
for business purposes are still looked upon with suspicious
eyes.
Sometimes, younger women feel uncomfortable in dealing
with men who show extra interest in them than work related

9. Low risk-bearing capacity:

Women in India are by nature weak, shy and mild. They
cannot bear the amount risk which is essential for running
an enterprise.
Lack of education, training and financial support from
outsides also reduce their ability to bear the risk involved in
an enterprises.
10. Lack of self confidence:
Women entrepreneurs because of their inherent nature, lack
of self-confidence which is essentially a motivating factor in
running an enterprise successfully.
They have to strive hard to strike a balance between
managing a family and managing an enterprise.
Sometimes she has to sacrifice her entrepreneurial urge in
order to strike a balance between the two.

SUCCESSFUL LEADING BUSINESS WOMEN IN

INDIA
The 21st leading business women in India: Akhila srinivasan, Managing Director , Shriram Investments
ltd.
Chanda Kocchar, Executive Director, ICICI Bank
Ekta Kapoor, Creative Director, balaji Telefilms Ltd.
Jyoti Naik, President, Lijjat Papad.
Kiran Mazumdar Shaw, Chairman & Managing director, Biocon
Ltd.
Lalita D.Gupte, JMD , ICICI Bank.
Preetha Reddy , Managing Director, Apollo hospitals.
Priya Paul, Chairman, Apeejay Park Hotels.
Rajshree Pathy, Chairman, Rajshree Sugars & Chemicals ltd.

THEORIES OF
ENTREPRENEURSHIP

McClelland's Theory of Entrepreneurship

McClelland was an American personality social psychologist and an
advocate of quantitative History. His theory is considered as one of
the pioneering efforts of entrepreneurial research.
David McClelland is most noted for describing three types of
motivational need, which he identified in his 1961 book, The
Achieving Society:
- achievement motivation (n-ach)

- authority/power motivation (n-pow)

- affiliation motivation (n-affil)
David McClelland's needs-based motivational model
These needs are found to varying degrees in all workers and
managers, and this mix of motivational needs characterises a
person's or manager's style and behaviour, both in terms of being
motivated, and in the management and motivation others.
The need for achievement (n-ach)
The n-ach person is 'achievement motivated' and therefore seeks
achievement, attainment of realistic but challenging goals, and
advancement in the job. There is a strong need for feedback as to

McClelland's Theory of Entrepreneurship

The need for authority and power (n-pow):
The n-pow person is 'authority motivated'. This driver
produces a need to be influential, effective and to make an
impact. There is a strong need to lead and for their ideas to
prevail. There is also motivation and need towards increasing
personal status and prestige.
The need for affiliation (n-affil):
The n-affil person is 'affiliation motivated', and has a need for
friendly relationships and is motivated towards interaction
with other people. The affiliation driver produces motivation
and need to be liked and held in popular regard. These
people are team players.
McClelland said that most people possess and exhibit
a combination of these characteristics.
people with strong 'achievement motivation' make
the best leaders.

McClelland's Theory of Entrepreneurship

McClelland suggested other characteristics
attitudes of achievement-motivated people:

and

Achievement is more important than material or financial reward.

Achieving the aim or task gives greater personal satisfaction than
receiving praise or recognition.
Financial reward is regarded as a measurement of success, not an
end in itself.
Security is not prime motivator, nor is status.
Feedback is essential, because it enables measurement of success,
not for reasons of praise or recognition (the implication here is that
feedback must be reliable, quantifiable and factual).
Achievement-motivated people constantly seek improvements and
ways of doing things better.
Achievement-motivated people will logically favour jobs and
responsibilities that naturally satisfy their needs, i.e. offer flexibility

McClelland's Theory of Entrepreneurship

Conclusion:
McClelland firmly believed that achievement-motivated
people are generally the ones who make things happen and
get results, and that this extends to getting results through
the organisation of other people and resources.
Although as stated earlier, they often demand too much of
their staff because they prioritise achieving the goal above
the many varied interests and needs of their people.

Max Webers Theory of Entrepreneurship

Max Weber in his theory says religion has a large impact on

entrepreneurial development.
According to Weber some religions have basic beliefs to earn and
acquire money and some have less of it.
He calls them a spirit of capitalism and adventurous spirit.
The spirit of capitalism will be generated when mental attitude in
the society is favourable to capitalism.
According to Max Weber, driving entrepreneurial energies are
generated by the adoption of exogenously-supplied religious beliefs.
It is these beliefs which produce intensive exertion in occupational
pursuits, the systematic ordering of means to ends, and the
accumulation of assets.
His theory suggests the belief systems of Hinduism, Buddhism ad
Islam do not encourage entrepreneurship.
His stand has been challenged by many sociologists.

Max Webers Theory of Entrepreneurship

Max Webers Theory is shown in Figure.

Max Webers Theory of Entrepreneurship

The theory is based on the invalid assumptions, which are:

(a) There is a single system of Hindu value,

(b) The Indian community internalised those values and translated
them to day-to-day behaviour, and
(c) These values remained immune to and insulated against external
pressures and change. The rapid growth of entrepreneurship in India
since independence proves that Hinduism is not averse to the spirit
of capitalism and to adventurous spirit.

Max Webers Theory of Entrepreneurship

Many thinkers have accepted the Webers analysis of linkage

between religious belief and entrepreneurial growth.

But this view is not accepted universally.
Samuelson criticised Webers view on the ground that capitalism
also developed in those societies where protestant ethic was not
prevalent.
Hoselitz argued that Protestant could not develop industries in
France because they were not given political security.
It can be concluded in the words of Carroll that ethical values have
some effect on entrepreneurial growth but to consider them all in all
would be unrealistic.