K. Ashok Kumar

Entrepreneurship Development

Lecturer, GIACRRayagada

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According to A Schumpeter “The entrepreneurship is essentially a creative activity or it is an innovative function”.

Entrepreneurship can be defined as a process of action an entrepreneur undertakes to establish his enterprise.

According to McClelland, entrepreneurship is doing things in a better and new way and decision-making under the condition of uncertainty.

A purposeful activity to initiate and develop a profit oriented business.

“Entrepreneur” is a person who creates an enterprise or who starts business.

To Eston Kimani, “A person who creates and manages change by the recognition of opportunities(needs, wants, opportunities, problems and challenges) and develops people and manage resources to take advantage of the resources to take the opportunity and creates a venture (profitable business).

Ducker's Views on Entrepreneur “An entrepreneur is the one who always searches for change, responds to it and exploits it as an opportunity. Innovation is the specific tool of entrepreneurs, the means by which they exploit changes as an opportunity for a different business or different service” .

Adam Smith :The entrepreneur as an individual who forms an organization for commercial purpose. He/She is proprietary capitalist, a supplier of capital and at the same time a manager who intervenes between the labor and the consumer.

“Entrepreneur is an employer, master, merchant but explicitly considered as a capitalist”.

The word „entrepreneur‟ is derived from the French verb „enterprendre‟. It means “to undertake”.

Today, an entrepreneur is an innovator or developer who recognizes and seizes opportunities; converts those opportunities into workable or marketable ideas; adds value through time, effort, money, or skills; assumes the risks of the competitive marketplace to implement these ideas; and realizes the rewards from the efforts.

An entrepreneur is a person who brings in change through innovation for the maximum social good. Entrepreneur is an individual who organizes an enterprise or a business venture by combining various factors of production for production of goods or services with an aim of selling them at profit.

Entrepreneur as a risk bearerEntrepreneur as an organizer Entrepreneur as an innovator

Enterprise is that where Entrepreneurial activity is going on. Like: Company, Industry, Firm, organization, office, agency, franchise, Shops etc.

Enterprise supports the recognition of new market opportunities as well as develops the opportunity to change and develop at the individual, business and industry/sector levels.

E — Energy

N — Need to achieve

T — Task oriented

E — Empathy

R — Resourcefulness

P — Planning

R — Risk-taking

I — Innovation

S — Skills

E — Endurance

The various definitions of entrepreneurship identify two basic elements of entrepreneurship namely innovation and risk bearing.

(1) Innovation: Innovation is doing something new or something different. Entrepreneurs constantly look out to do something different and unique to meet the changing requirements of the customers. Hence entrepreneurship needs to apply inventions on a continuous basis to meet customers changing demands for products.

(2)Risk Bearing: An entrepreneur needs to be bold enough to assume the risk involved and hence an entrepreneur is a risk-bearer not risk-avoider. This risk-bearing ability keeps him to try on and on which ultimately makes him to succeed.

What are different outcomes of engaging in Entrepreneurship?

Innovation or newness – Product or services Organizing resources – finance, people, physical and information

resources. Generating wealth Creating new product or service. Taking risk in business venture Prepared to face uncertainty Create job opportunity Increase the abundance of wealth generation for the nation.

Enterpreneur Entrepreneurship Person

Visualizer Creator

Organizer Innovator Planner Leader

Process Vision

Creation Organization Innovation Planning

Leadership

Relationship between Entrepreneur and Entrepreneurship

Points Entrepereneur ManagerMotive The main motive of an

entrepreneur is to start a venture for his personal gratification.

Main motive of a manager is to render services in an enterprisealready set by someone else.

Status Owner ServantRisk Assumes risk and uncertainty Manager does not bear any risk

involved in enterprise.Rewards Profits, which are highly uncertain

and not fixed.Salary which is certain and fixed

Innovation

Entrepreneur himself thinks over what and how to produce goods to meet the changing needs of the customers. Hence he acts asinnovator / change agent.

A manager simply executes plansprepared by the entrepreneur.

Qualification

An entrepreneur needs to possess qualities and qualifications like high achievement motive, originality in thinking, foresight, riskbearingability etc.

A manager needs to possess distinctqualifications in terms of soundknowledge in management theoryand practice.

Difference between Entrepreneur and Manager

Points Entrepreneur IntrapreneurDependency He is independent in his

operation.He is dependent on the entrepreneurs i.e. owner.

Raising of funds

He himself raises funds requiredfor the organization.

He does not raise funds for theorganization.

Risk Entrepreneurs bears the riskinvolved in the business.

He does not fully bear the riskinvolved in the organization.

Operation An entrepreneur operates fromOutside

An intrapreneur operates frominside.

Innovation Entrepreneurs converts the ideasinto viable opportunities.

Intrapreneurs takes the responsibilityof creating innovation.

Reward Entrepreneurs takes the profit ofthe business.

He is provided with a variety ofperquisite for his innovation.

Who is an Intrapreneur?

When we split the term we will get, intra + preneur stands for intra-corporate entrepreneur. To heritage dictionary, “A person with in a large corporation who takes direct responsibility for truning an idea into a profitable finished product through assertive risk-taking and Innovation.”

Intrapreneur thinks like an entrepreneur or leaves to start a new company.

Difference between Entrepreneur and Intrapreneur?

Small businessman EntrepreneurEngages in business activities for the purpose of profit to support his living and his family. 

Starts the venture, assumes leadership and expands the venture to fulfill personal goals and attain self accomplishment.

Low risk-taker. Moderate risk-taker.

Follows others and invests only in tested and proven markets.

Takes calculated risks 

Qualities of a Successful Entrepreneur

(i) InitiativeIn the world of business, opportunities come and go. An entrepreneur has to be a man of action. He should be able to initiate action and take advantage of opportunity. Once you miss the opportunity it will not come again. Therefore, initiative on the part of entrepreneur is a must.

(ii) Willingness to assume riskIn any business there is an element of risk. It implies that a businessman may be successful or unsuccessful. In other words it is not necessary that every business shall earn profit. This deters individuals to take up business. However, an entrepreneur always volunteers to take risks to run a business and be successful.

(iii) Ability to learn from experienceAn entrepreneur may commit mistakes. However, once an error is committed, it should not be repeated as that will lead to heavy losses. So, one should learn from his mistakes. An entrepreneur, therefore, should have the ability to learn from experience.

(iv) MotivationMotivation is key to success. This is necessary for success in every walk of life. Once you get motivated to do something you will not rest unless you complete it. For example, sometimes you become so much interested is reading a story or a novel that you do not sleep unless you complete it. This kind of interest in the work comes through motivation. This is an essential quality of a successful entrepreneur.

(v) Self-confidenceFor achieving success in life, one should have confidence in himself or herself. A person who lacks confidence can neither do any work himself nor can inspire others to work. Self-confidence is reflected in courage, enthusiasm and the ability to lead. A successful entrepreneur must have self-confidence.

(vii) Decision making abilityIn running an enterprise, the entrepreneur has to take a number of decisions. He should therefore be capable of taking suitable and timely decision. In other words he must take right decision at the right time. In the present world things move very fast. If an entrepreneur does not have the ability to take timely decision, he might miss opportunity and incur loss.

(vi) Orientation towards hard workThere is no substitute for hard work in life. While running a business, everyday, one problem or the other may arise. The businessman has to be vigilant about it and solve it as early as possible. This requires hard work on the part of entrepreneur. He cannot afford to say that now office time is over and I will not work. In some situations he may even have to work for the whole night. Thus, orientation towards hard work is the secret of success of an entrepreneur.