What is concept of entrepreneurship?

Entrepreneurship refers to the concept of developing and managing a business venture in

order to gain profit by taking several risks in the corporate world. Simply put,
entrepreneurship is the willingness to start a new business.

What are the key concepts of entrepreneurship?

The 4 key concepts of entrepreneurship are as follows:

1. Innovation
2. Risk taking
3. Vision
4. Organisation

What are entrepreneur traits?

Some of the most important entrepreneurial traits are:

1. Passion
2. Risk taking ability
3. Persisting nature
4. Innovative
5. Leading from the front
6. Ethical in nature

Importance of Entrepreneurship:

• Creation of Employment- Entrepreneurship generates employment. It provides an entry-

level job, required for gaining experience and training for unskilled workers.
• Innovation- It is the hub of innovation that provides new product ventures, market,
technology and quality of goods, etc., and increase the standard of living of people.
• Impact on Society and Community Development- A society becomes greater if the
employment base is large and diversified. It brings about changes in society and promotes
facilities like higher expenditure on education, better sanitation, fewer slums, a higher level
of homeownership. Therefore, entrepreneurship assists the organisation towards a more
stable and high quality of community life.
• Increase Standard of Living- Entrepreneurship helps to improve the standard of living of
a person by increasing the income. The standard of living means, increase in the
consumption of various goods and services by a household for a particular period.
• Supports research and development- New products and services need to be
researched and tested before launching in the market. Therefore, an entrepreneur also
dispenses finance for research and development with research institutions and
universities. This promotes research, general construction, and development in the
economy
What are the 4 Types of Entrepreneurship?
It is classified into the following types:
Small Business Entrepreneurship-
These businesses are a hairdresser, grocery store, travel agent, consultant, carpenter, plumber,
electrician, etc. These people run or own their own business and hire family members or local
employee. For them, the profit would be able to feed their family and not making 100 million
business or taking over an industry. They fund their business by taking small business loans or
loans from friends and family.
Scalable Startup Entrepreneurship-
This start-up entrepreneur starts a business knowing that their vision can change the world. They
attract investors who think and encourage people who think out of the box. The research focuses
on a scalable business and experimental models, so, they hire the best and the brightest
employees. They require more venture capital to fuel and back their project or business.
Large Company Entrepreneurship-
These huge companies have defined life-cycle. Most of these companies grow and sustain by
offering new and innovative products that revolve around their main products. The change in
technology, customer preferences, new competition, etc., build pressure for large companies to
create an innovative product and sell it to the new set of customers in the new market. To cope
with the rapid technological changes, the existing organisations either buy innovation enterprises
or attempt to construct the product internally.
Social Entrepreneurship-
This type of entrepreneurship focuses on producing product and services that resolve social
needs and problems. Their only motto and goal is to work for society and not make any profits.

Enterpreral Development Program (EDP)

Definition

Motivation is regarded as “the inner state that energizes activities and directs or channels
behavior towards the goal”.

Motivation is the process that arouses action, sustains the activity in progress and that regulates
the pattern of activity.

Nature of Motivation

The nature of motivation emerging out of above definitions can be expressed as follows:

1. Motivation is internal to man

Motivation cannot be seen because it is internal to man. It is externalized via behavior. It activates
the man to move toward his / her goal.

2. A Single motive can cause different behaviors

A person with a single desire or motive to earn prestige in the society may move towards to join
politics, attain additional education and training, join identical groups, and change his outward
appearance.

3.Different motives may result in single behaviour

It is also possible that the same or single behaviour may be caused by many motives. For
example, if a person buys a car, his such behaviour may be caused by different motives such as
to look attractive, be respectable, gain acceptance from similar group of persons, differentiate the
status, and so on.

4.Motives come and go

Like tides, motives can emerge and then disappear. Motives emerged at a point of time may not
remain with the same intensity at other point of time. For instance, an entrepreneur overly
concerned about maximization of profit earning during his initial age as entrepreneur may turn his
concern towards other higher things like contributing towards philanthropic activities in social
health and education once he starts earning sufficient profits.

5.Motives interact with the environment

The environment in which we live at a point of time may either trigger or suppress our motives.
You probably have experienced environment or situation when the intensity of your hunger picked
up just you smelled the odour of palatable food.

You may desire an excellent performance bagging the first position in your examination but at the
same time may also be quite sensitive to being shunned and disliked by your class mates if you
really perform too well and get too much of praise and appreciation from your teachers. Thus,
what all this indicates is that human behaviour is the result of several forces differing in both
direction and intent.

Entrepreneurial Motivating Factors

Most of the researchers have classified all the factors motivating entrepreneurs into internal and
external factors as follows:

Internal Factors

These include the following factors:

1. Desire to do something new.
2. Become independent.
3. Achieve what one wants to have in life.
4. Be recognized for one’s contribution.
5. One’s educational background.
6. One’s occupational background and experience in the relevant field.

External Factors

These include:
1. Government assistance and support.
 2. Availability of labour and raw material.
3. Encouragement from big business houses.
4. Promising demand for the product.

McClelland's Theory of Motivation: Achievement Theory

David C. McClelland (May 20, 1917 - March 27, 1998) was an American psychologist. He is well
known for his work and development of need theory on motivation. David McClelland and his
associates began a study of three needs that motivates human behavior that is power, affiliation
and achievement in the early 1950s. McClelland believes that each person has a need for all
three and other needs but that people differs in the degree to which the various needs motivate
their behavior.

These needs are:

• Need for achievement

• Need for power
• Need for affiliation

Applications of McClelland’s Theory

David C. McClelland's Achievement Theory

Since he stated that each person has three needs, these three needs can be abbreviated as “n
Ach”, “n Pow” and “n Aff” respectively. They are defined as follows:

1. Need for Achievement (n Ach)

The need for achievement would fall between needs for esteem and self actualization. This need
is satisfied not by the manifestations of success, which confer status, but with the process of
carrying work to its successful completion.

This is the drive to excel, to achieve in relation to a set of standard, and to strive to succeed. In
other words, need for achievement is a behavior directed towards competition with a standard of
excellence. McClelland found that people with a high need for achievement perform better than
those with a moderate or low need for achievement and noted regional/national differences in
achievement motivation. Through his research, McClelland identified the following three
characteristics of high need achievers:
• High need achievers have a strong desire to assume personal responsibility for
performing a task or finding a solution to a problem.
• High need achievers tend to set moderately difficult goals and task calculated risks.
• High need achievers have a strong desire for performance feedback.

Individuals with a high need for achievement generally will take moderate risks, like situations in
which they can take personal responsibility for finding solutions to problems and want concrete
feedback on their performance. As McClelland points out, “No matter how high a person’s need
to achieve may be, he cannot succeed if he has no opportunities, if the organization keeps him
from taking initiative, or does not reward him if he does good. Thus, if management wishes to
motivate individuals operating on the achievement level, it should assign them tasks that involve
a moderate degree of risk of failure, delegate to them enough authority, to take initiative in
completing their tasks, and give them periodic, specific feedback on their performance.

2. Need for Power (n Pow)

The need for power is concerned with making an impact on other, the desire to influence other,
the ways to change people, and the desire to make a difference in life. People with a high need
for power are people who like to be in control of people and events. This results in ultimate
satisfaction to man.

People who have a high need for power are characterized by:
• A desire to influence and direct somebody else.
• A desire to exercise and control over others.
• A concern for maintaining leader-follower relations.
The need for power is expressed as a desire to influence others. In relation to Maslow’s hierarchy,
power would fall somewhere between the needs for esteem and self-actualization. People with a
need for power tend to exhibit behaviors such as out-spookiness, forcefulness, willingness to
engage in confrontation and a tendency to stand by their original position. They often are
persuasive speakers and demand a great deal from others. Management often attracts people
with a need for power because of the many opportunities it offers to exercise and increase power.
Managers who are motivated by the need for power are not necessarily “power hungry” in the
sense in which the expression is often used.

3. Need for Affiliation (n Aff)

The need for affiliation is defined as a desire to establish and maintain friendly and warm relations
with other people. The need for affiliation, in many ways, is similar to Maslow’s social needs. The
people with high need for affiliation have these characteristics:
• They have a strong desire for acceptance and approval from others.
• They tend to confirm to the wishes of those people whose friendship and
companionship they value.
• They give value and feeling to others.
In conclusion, McClelland’s definitive motive is similar to Maslow's theory. The person is
concerned with forming friendly relations with others, desire for companionship, and the desire to
help others. People dominated by inflictive need would be attracted to jobs that allow considerable
social interactions interpersonal relations. A manager could also facilitate their need satisfaction
by spending more time with such individuals and periodically bringing them together as a group.

Limitations of Achievement Theory

• The theory does not deal fully with the process of motivation and how it really takes
place.
• Persons with high need for achievement expect similar results from others. As a
result, they may lack human skills and patience for being effective managers.
• The use of protective techniques for developing achievement motive is
objectionable.
• The research evidence in support of the achievement motivation theory is
fragmentary and doubtful.
Entrepreneurship Development Program
Entrepreneurship Development Programme (EDP) is a programme which helps in developing
entrepreneurial abilities. The skills that are required to run a business successfully is developed
among the students through this programme. Sometimes, students may have skills but it requires
polishing and incubation. This programme is perfect for them. This programme consists of a
structured training process to develop an individual as an entrepreneur. It helps the person to
acquire skills and necessary capabilities to play the role of an entrepreneur effectively.

EDP is an effort of converting a person to an entrepreneur by passing him through thoroughly

structured training. An entrepreneur is required to respond appropriately to the market and he/she
is also required to understand the business needs. The skills needed are varied and they need to
be taken care in the best possible way. EDP is not just a training programme but it is a complete
process to make the possible transformation of an individual into an entrepreneur. This
programme also guides the individuals on how to start the business and effective ways to sustain
it successfully.

Objectives of EDP
The objective of this programme is to motivate an individual to choose the entrepreneurship as a
career and to prepare the person to exploit the market opportunities for own business
successfully. These objectives can be set both in the short-term and long-term basis.
 • Short-term objectives: These objectives can be achieved immediately. In the short-term,
the individuals are trained to be an entrepreneur and made competent enough to scan
the existing market situation and environment. The person, who would be the future
entrepreneur, should first set the goal as an entrepreneur. The information related to the
existing rules and regulations is essential at this stage.

• Long-term objectives: The ultimate objective is that the trained individuals successfully
establish their own business and they should be equipped with all the required skills to
run their business smoothly.
The overall objectives of EDP are mainly to help in the rapid growth of the economy by supplying
skilled entrepreneurs. This programme primarily aims at providing self-employment to the young
generation.
Roles of EDP
An Entrepreneurship Development Programme primarily plays four roles to help an
individual to become an entrepreneur. They are:
• Stimulatory Role: It aims at influencing people in large number to be the
entrepreneur. This includes:
1. developing managerial, technical, financial, and marketing skill
2. inculcating personality traits
3. promotes and reforms entrepreneurial behavior and values
4. identifying a potential entrepreneur applying scientific methods
5. motivational training and building a proper attitude
6. strengthening the motive of a person and giving recognition
7. the valuable know-how of the local products and the processes help in the
selection of products, preparation of project reports

• Supportive Role: It helps in the following ways:

1. registration of the business
2. procurement of fund
3. Incubation support
4. Team building and team development support
5. Mentorship and guidance from industry experts
6. Providing tax relief, subsidy, government schemes etc.
7. guidance in product marketing
8. support for management consultancy

• Sustaining Role: It aims at providing an effective safeguard to businesses to sustain

against the cut-throat market competition. This includes:
1. help in modernization, expansion, and diversification
2. additional financing for further development
3. Global Networking Opportunities
4. creating new marketing processes
5. helping access to improved services and co-working centers

• Socio-economic Role: It aims at upgrading the socio-economic status of the public

and includes:
1. identifying entrepreneurial qualities in practicality
2. creating employment opportunities in micro, small, and medium industries
on an immediate basis
3. arresting concentration of industries by supporting regional development
in a balanced manner
4. focusing on the equal distribution of income and wealth of the nation
5. channelizing the latent resources for building an enterprise