ENT301

Enterprise Entrepreneur Entrepreneurship

A unit of economic organization
or activity; especially : a
business organization
An organization, especially a
business, or a difficult and important
plan, especially one that will earn
money with eagerness to do
something new and clever, despite
any risks
An enterprise is a company or
business, often a small one
Person who starts or organizes a
commercial enterprise,
especially one involving
financial risk. (The shorter
Oxford Dictionary, 1989)
A person who shifts economic
resources out of an area of lower
and into an area of higher
productivity and yield. (J B Say)
One who starts his/her own new
and small business. (Expert)
The process of organizing,
managing and assuming the risk
of a business. (Kuratko D F and
Hodgetts R M )
It is the capacity for innovation,
investment, and expansion in
new markets, products, and
techniques.(Nathaniel H Leff)
Act of starting a business.
(Expert)

Type of Entrepreneurship
There are normally five types of Entrepreneurship
 Administrative Entrepreneurship
a) Traditional R & D management approach.
b) Joint efforts of both the general management and scientific technical personnel to identify
areas for R & D and the development of the new product, techniques or the improvement of
the existing ones.
 Opportunistic Entrepreneurship
a) Ability to catch at the right time the fruits of the internal as well as external technological
developments.
b) Detecting at the very first time the promising innovative achievements and taking opportunity
to adopt the same for raising the quality reducing the cost and thus marching ahead of many
of the competitors.
 Incubative Entrepreneurship
a) It is nothing but the ability to initiate and nurture new venture developments within the
original company with special care.
b) These venture development units are intended as incubators for innovative, high risk business
endeavors and for providing an environment that is supportive of entrepreneurial efforts.
 Imitative Entrepreneurship
a) This stresses the replication or creative imitation of innovative technical achievements made
by another firm.
b) Done with appropriate modifications and refinements in case protected property rights are
involved.
 Acquisitive Entrepreneurship
a) This is the ability of the internal management/entrepreneurs to acquire competitors’ technical
capabilities.
b) They make accelerated growth, diversification through horizontal or vertical integration by
gaining access tom others’ technological developments.
 Types of Entrepreneurs
Danhof classification
 Innovative
 Doing new things or doing of things that have already done in a new way. which may follows
 Introducing or opening a new market.
 Introducing a new product or production method or process.
 Creating new organization forms.
 Conquering a new source of raw materials supply.
 Imitative
 Readiness to adopt
 Imitate the technology or method invented by others
 Suitable for developing countries like ours.
 Fabian
 Skepticism and cautiousness in economic behavior
 Love to remain in the business with the age old techniques of production
 Drone
 Lack of dynamism, creativity and the tendency to resist change
 Very conservative or orthodox in outlook
 Comfortable with old fashioned technology of production
Smith’s classification
 Craftsman
 Narrowness in education and training, low social awareness and involvement, lack of
confidence in dealing with the social environment and a limited time orientation
 They are rigid, conservative and stagnant.
 Opportunistic
 Breadth in education and training, high social awareness and involvement, confidence in their
ability to deal with the social environment and future orientation
Leibenstein’s classification
 Routine
 Mange and co-ordinate production activities of established operating enterprises with well-
known input factors, techniques and equipment.
 Innovative
 Perform activities which are necessary to carry on an enterprise with relatively less known
production function
Westhead and wright classification
 Nascent / Novice
 Who are about to start career as self-employed or ready to switch over from employment to
self-employment status
 Inexperienced individual with no prior business ownership interests
 Serial
 Own a new economically active business firm who had previously sold or closed down
similarly owned firms.
 Portfolio
 Own and operate simultaneously two or more economically active firms
 Type of skills needed for an entrepreneur

Entrepreneur skills

Technical skills Business Management skills Personal entrepreneurial skills

 Planning & goal

 Writing skill
setting  Risk taker
 Oral skill
 Decision making  Ability to manage
 Interpersonal skill
 Human relation change
 Listening skill
 Marketing skill  Innovative
 Organizing skill
 Finance skill  Disciplined
 Networking skill
 Accounting skill  Visionary leader
 Coaching skill
 Controlling skill
 Negotiation skill

Qualities/Characteristic of a successful entrepreneur

Source: Entrepreneurship small business and lives of successful entrepreneurs

 National benefits of entrepreneurship
Entrepreneurship has at least four national benefits
1) Entrepreneurship fosters economic growth
2) Entrepreneurship creates new technologies, products & services
3) Entrepreneurship changes and rejuvenates market competition
4) Entrepreneurship increases productivity
Entrepreneurship vs Manager characteristics
Characteristics Manager Entrepreneur
Time orientation Immediate to medium range, uses daily, Medium to long range, will use year
weekly, monthly or annual reports to measure for growth projections 3-10 years
performance, seeking next performance planning
Others oriented Works with or manipulates others, desires Self-oriented, seeks achievement for
power over others self
Risk trading Lower risk taker, has developed a Moderate risk taker, calculated risks
conservative nature and will try to ensure a appear low, will chance income and
steady organization posture net worth
Structure Dependent upon structure for organization, Is developing structure, informal,
formal, department lines of control very whatever is best for the situation, not
important to maintain operations very important
Thinking Concrete, absolute, low tolerance for Abstract, high tolerance for ambiguity
ambiguity, seeks certainty, organizational and uncertainty, creative, imaginative
Communication Most often one way, seeks positive feedback Two-way, desirous of positive and
negative feedback
Managerial skills Broad, highly develop, often has received Limited, generally skilled in technical
formal management education, developed areas of business, often without
theoretical and practical base for managing formal management education
Operations A link in total organizations, a component Control figure, all operations and
part of the larger plan decisions will be made by this person

Variables Determining growth of Entrepreneurship

1) Family background and other economic factors
2) Personality characteristics
3) Economic factors
4) Socio-cultural factors
5) Political support
6) Psychological factors