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MC080401068Salma Noreen

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MGT602 – EntrepreneurshipAssignment no 1

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CASE STUDY

Following is a statement in which a business owner attempts to explain and justify his preference for slow growth in his business:

I limit my growth pace and make every effort to service my present customers in the manner they deserve. I have some peer pressure to do otherwise by following the advice of experts – that is, to take on partners and debt to facilitate rapid growth in sales and market share. When tempted by such thoughts, I think about what I might gain. Perhaps I could make more money, but I would also expect a lot more problems. Also, I think it might interfere somewhat with my family relationships, which are very important to me.

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Questions:

1. Should this venture be regarded as entrepreneurial? Is the owner a true entrepreneur?

Answer: As we see the definition of Entrepreneurship, an Entrepreneur is the person who has all rights and responsibilities of his business, in case of lose, Entrepreneur bear lose. He also can make changes in his business for increment of wealth; he can use innovative ideas and techniques. A person who has to assumes the risks and rewards. The entrepreneurship is the one who brings the capital, labor, resources, materials and other assets. So we can say this venture should be regarded as entrepreneurial. 

I don’t think that owner is a true entrepreneur, because he wants to be sole proprietor but for business he has to adopt partnership. He is in the condition of confusion, he is frustrated and couldn’t able to select one option as he is saying that one side is better for his business but his wishes is opposite. He limits his business because he can’t handle big one but it can also be risky for him but same time he is afraid of partnership, as he has fear of losing whole business in case of partner become a fraud. He is bit confused because he has not much financial resources and also afraid of losing this extra money as his business is not going in good condition.

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So when we see his condition and his thinking, we can’t say that he is true entrepreneur. Because a true entrepreneur can’t think about partners, he assumes all risks and rewards alone, he takes all decisions alone, but here we see the owner is depressed and he can’t take decisions confidently.

2. Do you agree with the philosophy expressed here? Is the owner really doing what is best for his family?

Answer: The owner is looking depressed. He has to adopt partnership for his business but he doesn’t want to. Business seems to be destroying and as experts suggest him and he also admit that if he has some partners, it facilitates his business, provide his business some sources of financial resources as well as assuming the risk. But same time he is thinking about the effects of partnership on his business life. Taking decisions will not be only his hands in case of partnership. As partners equally assume risks so they also equally assume the benefits and rewards. It seems that his business is his own family business, in which he doesn’t want or simply can’t make changes even for innovation point of view, he is afraid of family relationship as there is mostly happened to adopt family business as it was before so here seems same case with this person. I am agree with the philosophy which is expressed here, as this type of condition can make confused when one side we see our success but we are bound to adopt another way where we are already bearing loss. Same happened with this person, he is continuously bearing loss so he limited his business and experts suggest him a way which he admit that can be useful for his business but due to his family he can’t adopt that. Same time he is thinking about risks which are involved in adopting suggested way which is better for his business. When we talk about his family and think about his relation that he is doing good or bad then we can easily conclude that he is doing whatever best for his family in sense of doing their style of business but same time he is doing bad for his family in long term as if he lose his business. And will be only source of earning for his family then he will be doing very wrong for his family indirectly. But one thing is crystal clear for us that he is totally doing wrong for his business because as a good entrepreneur he must take good steps for his business’s betterment which are not taken by him.3. What kinds of problems is this owner avoiding?

Answer: After studying the case we come to know some problems which are in owner’s mind and he is trying to avoid them, because of these problems he is not able to take any decision. Let me elaborate one by one as follows:Customers Problems/Business handling problems:He is not able to handle his business alone so he limits his business, so he can serve current customers properly, this situation shows that he want to extend his business but he can’t handle properly so he need partners as experts suggest him for his business betterment. So his biggest problem is that he can’t handle his business alone, he hasn’t abilities of sole proprietor.Family Problems:As case study shows that it might his family business so he can’t make changes in this business for keeping his good family relations which are very important for him, but at same time he don’t

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want to lose his business. As he is thinking that he can make money if he was not to face the problem of family. One other problem is that in case of losing business he might lose his earning, family pressure is also a problem for him. Financial Problem:For extension of business, sometimes we have to bring and invest some money but sometimes it’s not much easy for only man so he needs some partners who will ready to invest some money for his business and also help him in handling business activities. But entering partners in business can be risky so it is also a problem for him and he want to avoid this too by keeping proprietorship. Debt:He is also depressed because he needs money for his business but if he take loan from bank then he must promise in exchange of getting money that in case he will not be able to give back lent amount to the bank then bank have right to snatch his property or other thing equal to that amount. When we are going to take loan for this type of business then it might be much risky because there are many chances to lose of business means loss of lent money.

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