NC19 – ENTREPRENEURSHIP

DEVELOPMENT

Dr. Sreeya B
Associate Professor, Management Studies
Saveetha School of Law, SIMATS

Dr. Sreeya B, Associate Professor, Saveetha

School of Law 1
NC1901 – ENTREPRENEURSHIP
DEVELOPMENT
Module 1
• Concept of Entrepreneurship
• Definition / Meaning
• Types / Classification of Entrepreneurs
• Traits / Characteristics of an Entrepreneur
• Functions of Entrepreneurs
• Roadmap and Challenges
• Role of entrepreneurship in building employability
skills for intrapreneurs
• Entrpreneur Vs. Intrapreneur
Dr. Sreeya B, Associate Professor, Saveetha
School of Law 2
 Concept of Entrepreneurship

ENTREPRENE ENTREPRENEURSHI ENTERPRISE

UR P OUTPUT
PERSON PROCESS/ACTION OBJECT
(SUBJECT) (VERB)

Dr. Sreeya B, Associate Professor, Saveetha

School of Law 3
 Entrepreneur
According to George Bernard Shaw,
people fall into three categories:
(1) those who make things happen
(2) Those who watch things happen, and
(3) those who are left to ask what did
happen.
Generally, Entrepreneurs fall under the
first category.

Dr. Sreeya B, Associate Professor, Saveetha

School of Law 4
 ENTREPRENEUR
“Entrepreneur”= “to undertake”
Cantillon described an entrepreneur as a person
who pays a certain price for a product to resale it
at an uncertain price, thereby making decisions
about obtaining and using resources while
consequently assuming the risk of enterprise.
Entrepreneurs identify an innovation to seize an
opportunity, mobilize money and management
skills, and take calculated risks to open markets
for new products, processes and services.

Dr. Sreeya B, Associate Professor, Saveetha

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Four aspects of being an entrepreneur today:
Involves creation process.
Requires devotion of time and effort.
Involves rewards of being an entrepreneur.
Requires assumption of necessary risk

Dr. Sreeya B, Associate Professor, Saveetha

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 ENTREPRENEURSHIP
Entrepreneurship is defined as the process
of using private initiative to transform a
business concept into a new venture or to
grow and diversify an existing venture or
enterprise with high growth potential.
In simple terms, Entrepreneurship is the
process of creating value by bringing
together a unique package of resources to
exploit an opportunity.
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 ENTERPRISE
 Launching and organising an enterprise
 Enterprise should be evaluated with respect to
consistency with the ongoing business to remain
profitable and competitive.
 Basic strategy is become a low cost producer and
compete on price, differentiation by producing a
unique product, be a service provider to customers.

Dr. Sreeya B, Associate Professor, Saveetha

School of Law 8
 CHARACTERISTICS OF
ENTREPRENEUR
HARD WORK
BUSINESS ACUMEN AND SINCERITY
PRUDENCE
ACHIEVEMENT MOTIVATION
SELF-RELIANCE AND INDEPENDENCE
HIGHLY OPTIMISTIC
KEEN FORSIGHT
PLANNING AND ORGANISING ABILITY
INNOVATIVENESS
RISK TAKING
SECRECY MAINTENANCE
MAINTAIN PUBLIC RELATIONS
COMMUNICATION SKILL Dr. Sreeya B, Associate Professor, Saveetha
School of Law 9
FUNCTIONS OF ENTREPRENEUR
Risk measurement and risk taking
Innovate/ create/ discover
Analyze opportunities
Strategies for venture
Develop business plan
Acquire resources
Organize and start venture
Develop and grow venture
Delegate, direct and lead the plan
Supervise and control Dr. Sreeya B, Associate Professor, Saveetha
School of Law 10
TYPES OF ENTREPRENEURS
1. CLASSIFICATION BY CLARENCE
DANHOF
2. COLE’S CLASSIFICATION
3. ON THE BASIS OF STAGES OF
DEVELOPMENT
4. ON THE BASIS OF TYPE OF BUSINESS
5. ON THE BASIS OF USE OF TECHNOLOGY
6. ON THE BASIS OF MOTIVATION
7. ON THE BASIS OF ENTREPRENEURIAL
ACTIVITY
Dr. Sreeya B, Associate Professor, Saveetha
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 1. CLASSIFICATION BY CLARENCE
DANHOF
On the basis of American agriculture
a) Innovative Entrepreneurs: Aggressive on
experimentation and cleverly put attractive
possibilities into practice.
b) Adoptive Or Imitative Entrepreneurs: Copy
and learn from the innovating entrepreneurs
c) Fabian Entrepreneurs: Shy and lazy. They
try to follow the footsteps of their predecessors.
They follow old custom or traditions
d) Drone Entrepreneurs: refuse to adopt and use
opportunities to make changes in production.
They will not change even it is loss.
Dr. Sreeya B, Associate Professor, Saveetha
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2. COLE’S CLASSIFICATION
1. EMPIRICAL ENTREPRENEUR
 Who never introduces anything new in his method of
production or business.
 Simply follows the rule of thumb
 Like drone entrepreneurs

2. RATIONAL ENTREPRENEUR
 Who is ready to introduce even revolutionary changes on the
basis of general economic conditions prevailing in that area.
 Takes rational decisions himself depending up on the
situation.
3. COGNITIVE ENTREPRENEUR
 Who takes advices and services of experts and introduces
changes
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3. ON THE BASIS OF STAGES OF
DEVELOPMENT
1) First Generation Entrepreneur: He is one who
starts an industrial unit by means of his own
innovative ideas and skills. He is essentially an
innovator. He is also called new entrepreneur.
2) Modern Entrepreneur: He is an entrepreneur
who undertakes those ventures which suit the
modern marketing needs.
3) Classical Entrepreneur: He is one who
develops a self supporting venture for the
satisfaction of customers’ needs. He is a stereo
type or traditional entrepreneur.
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4. ON THE BASIS OF TYPE OF
BUSINESS
1) Business Entrepreneur: He is an individual who discovers an
idea to start a business and then builds a business to give birth to
his idea.
2) Trading Entrepreneur: He is an entrepreneur who undertakes
trading activity i.e; buying and selling manufactured goods.
3) Industrial Entrepreneur: He is an entrepreneur who undertakes
manufacturing activities.
4) Corporate Entrepreneur: He is a person who demonstrates his
innovative skill in organizing and managing a corporate
undertaking.
5) Agricultural Entrepreneur: They are entrepreneurs who
undertake agricultural activities such as raising and marketing of
crops, fertilizers and other inputs of agriculture. They are called
agripreneurs. Dr. Sreeya B, Associate Professor, Saveetha
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5. ON THE BASIS OF USE OF
TECHNOLOGY
1) Technical Entrepreneur: Extremely task
oriented.
2) Non-Technical Entrepreneur: They
develop marketing techniques and
distribution strategies to promote their
business
3) Professional Entrepreneur: He is an
entrepreneur who starts a business unit but
does not carry on the business for long
period.
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6. ON THE BASIS OF MOTIVATION
1) Pure Entrepreneur: Motivated by profit
2) Induced Entrepreneur: He is induced to take
up an entrepreneurial activity with a view to
avail some benefits from the government
3) Motivated Entrepreneur: desire to make use
of their technical and professional expertise
and skills
4) Spontaneous Entrepreneur: desire for self
employment and to achieve or prove their
excellence in job performance.
Dr. Sreeya B, Associate Professor, Saveetha
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 7. ON THE BASIS OF
ENTREPRENEURIAL ACTIVITY
a) Novice: A novice is someone who has
started his/her first entrepreneurial venture
b) Serial Entrepreneur: A serial
entrepreneur is someone who is devoted to
one venture at a time but ultimately starts
many
c) Portfolio Entrepreneurs: A portfolio
entrepreneur starts and runs a number of
businesses at the same time
Dr. Sreeya B, Associate Professor, Saveetha
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STAGES IN ENTREPRENEURIAL
PROCESS

IDENTIFY AN OPPORTUNITY

ESTABLISH VISION

PERSUADE OTHERS

GATHER RESOURCES

CREATE NEW VENTURE , PRODUCT OR

MARKET

CHANGE OR ADAPT WITH TIME

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ROADMAP/CHALLENGES
BENEFITS:
Create own destiny.
Make difference.
Reach one’s full potential.
Reap extraordinary profits.
Societal responsibility and recognition.
Opportunity to engage in work of their
choice.
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CHALLENGES:
Uncertainty of income.
Risk of losing entire investment.
Long hours of hard work.
Lower quality of life until the business
gets established.
High level of stress, complete
responsibility.

Dr. Sreeya B, Associate Professor, Saveetha

School of Law 21
 INTRAPRENEUR
Intrapreneur is the person who works
within the organization, utilizes the
resources available within the
organization and tries to accomplish
present task in innovative and creative
manner by effective utilization of
available resources

Dr. Sreeya B, Associate Professor, Saveetha

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 INTRAPRENEUR (contd...)
 The new brand of corporate entrepreneurs from
within an organisation are called as intrapreneurs.
 The term intrapreneur was coined in USA in the
late seventies.
 Many senior executives of big companies in
America left their jobs and started small business
of their own.
 They left the organisation because they did not
get any opportunity to apply their own ideas and
innovative ability

Dr. Sreeya B, Associate Professor, Saveetha

School of Law 23
ENTREPRENEUR vs. INTRAPRENEUR
ENTREPRENEUR INTRAPRENEUR

Independent Dependent

Need not be highly educated Highly educated

Fund raising No fund raising

Risk bearing No risk bearing

Routine work Specialist

Operation from outside Operation from inside

Strong authoritarian Less authoritarian

Dr. Sreeya B, Associate Professor, Saveetha

School of Law 24
EVOLUTION OF ENTREPRENEURSHIP
EARLY PERIOD
 The earliest definition of the entrepreneur as a go-
between is Marco Polo.
 He tried to establish trade route to the far East.
 He used to sign a contract with a venture capitalist
to sell his goods.
 The capitalist was the risk bearer.
 The merchant adventurer took the role of trading.
 After his successful selling of goods and completing
his trips, the profits were shared by the capitalist
and the merchant.
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MIDDLE AGES
The term entrepreneur was referred to
a person who was managing large
projects.
He was not taking any risk but was
managing the projects using the
resources provided.
An example is the cleric who is in
charge of great architectural works
such as castles, public buildings,
cathedrals etc.
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16th CENTURY
The term entrepreneur was referred to a
person who was involved in military
Expeditions.
17th CENTURY
An entrepreneur was a person who entered
into a contractual arrangement with the Govt.
to perform a service or to supply some goods.
Civil engineering activities such as
construction and fortification.
The profit was taken (or loss was borne) by
the entrepreneur.

Dr. Sreeya B, Associate Professor, Saveetha

School of Law 27
18th CENTURY
Concept 1: ENTREPRENEUR = RISK BEARER
It was Richard Cantillon, French Economist, who
applied the term entrepreneur to business for the first
time (1734). • He is regarded by some as the founder of
the term.
He defined an entrepreneur as a person or an agent
who buys factor services at certain prices with a view
to sell them at uncertain prices in the future.
Concept 2: ENTREPRENEUR = ORGANISER
Jean-Baptiste , (aristocratic industrialist) in 1803 gave
this concept a person who unites
Concept 3: ENTREPRENEUR = INNOVATOR
Joseph A. Schumpeter (1934) gave this concept
creating something new
Dr. Sreeya B, Associate Professor, Saveetha
School of Law 28
19th century
During this period entrepreneur were not
distinguished from mangers and were viewed
mostly from managers and from economic
perspective in following manner :
a. He organizes and operates the enterprise for his
personal gains.
b. He pays current prices for the materials consumed
in the business.
c. He contributes his own initiative, skill, in planning,
organizing and administering things in company.
d. He assumes the chance of loss and gain consequent
to uncontrollable factors.

Dr. Sreeya B, Associate Professor, Saveetha

School of Law 29
During the period of 20th century entrepreneur
was
seen as innovator in the economy. He was the one
who came up the unique concept in the market. He
performed following functions as entrepreneur :
a. To revolutionize the pattern of production by
exploiting inventions.
b. To perform pattern of production by exploiting
technological method of producing new commodity
or old commodity in new patter.
c. Opening new source of supply of raw materials or
new change outlet of products
d. Performing these functions by organizing new
industry.
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 21st century :

During the present century two characteristics are

associated with the entrepreneur
they are innovation and creativity.
Creativity is the ability to bring some thing new into
existence.
While innovators are practical people and create from the
opportunities available in reality . Following principles of
innovation have emerged leading to success of entrepreneur
:
a. Action oriented and searching for new ideas
b. Making the product service simple and understandable
c. Trying, testing and revising
d. Learning from failures
e. Hard work is the key to success
Dr. Sreeya B, Associate Professor, Saveetha
School of Law 31