MANAGEMENT AND

ENTREPRENEURSHIP
By
Prof. Basavaraj S M
AIET Dept of MBA
PROF.BASAVARAJ S MAMMANI 6/14/2019
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 • The word entrepreneur is derived from the
French word ‘enterprendre’ it means “to
undertake”

• Entrepreneur is an individual who takes risk and

starts something new.

PROF.BASAVARAJ S MAMMANI 6/14/2019

 Entrepreneurship is a systematic innovation,
which consists in the purposeful and
organized search for changes, and it is the
systematic analysis of the opportunities
such changes might offer for economic and
social innovation.”
---Peter Drucker

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 MEANING
1. Entrepreneur is an organizer of a business firm central
to its distributive and productive function.

2. Entrepreneur are specialized group of persons who

bear risk and deal with uncertainties.

3. Entrepreneur is an economic man who tries to

maximize his profits by innovations. Innovation
involves problem solving and entrepreneur gets
satisfaction from using capabilities in attacking
problems.

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 Entrepreneurship is the process of creating
something new with value of devoting the
necessary time and effort, assuming the
accompanying financial, physical and social
risk and receiving the resulting rewards of
monetary and personal satisfaction and
independence.

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 Anentrepreneur is one who always search for
change, responds to it and exploits it as an
opportunity

 An entrepreneur in any given economy is an

individual who introduce something new in
economy

 An entrepreneur is a social Parasite

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PROF.BASAVARAJ S MAMMANI 6/14/2019
 The word entrepreneur originates from the
French word –ENTREPRENDRE- 19TH ,Centaury
which means "to undertake." In a business
context, it means to start a business.

 The entrepreneur is one who undertakes to

organize, manage, and assume the risks of a
business.

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Functions of Entrepreneur

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Peter has identified 13 functions of an
entrepreneur these function has been
divided into 3 categories

 Entrepreneur as an innovator

 Entrepreneur as a risk taker

 Entrepreneur as an organizer

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 1 Entrepreneur as a innovator
 Introduction of new product in the market
 Introduction of a new method
 Entering new market
 Discovery of a new source of supply of raw
material
 Carrying out of new form of supply of raw
material

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 2 Entrepreneur as risk taker

 Assumes all possible risks of business

 Buysraw material necessary for finished

product but uncertainty about selling prices

 Hereduce the uncertainty by his initiative

and skill

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 3 Entrepreneur as an organizer
 He has to raise the sufficient capital and
resources

 He has to plan, delegate and execute

 He has to manage his profit wisely

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TYPES OF ENTREPRENEURS

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According to stages of economic development

Innovative entrepreneur
An innovative entrepreneur is one who
introduce a new product or a new techniques
or a new market and can re-organise the
enterprise

 Fabian entrepreneur
Fabian entrepreneurs are those who are very
cautious and are skeptical about any changes

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 Imitative entrepreneur
Imitative entrepreneur are those who adopt or
copy successful innovations created by
innovative entrepreneurs

o Drone entrepreneur
Drone entrepreneur are those who are highly
resistant to change

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According to the types of business
 Business entrepreneur
 Trading entrepreneur
 Industrial entrepreneur
 Corporate entrepreneur
 Agriculture entrepreneur
 Retail entrepreneur
 Service entrepreneur

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According to the use of technology

Technical entrepreneur
Non-technical entrepreneur
Professional entrepreneur
High-tech entrepreneur
Low tech entrepreneur

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 According to area

 Urban entrepreneur

 Rural entrepreneur

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According to gender and age

 Men entrepreneur

 Women entrepreneur

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 According to motivation

 Pure entrepreneur

 Induced entrepreneur

 Motivated entrepreneur

 Spontaneous entrepreneur

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 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.

 Definition
 Pinchot (1985) defines an Intrapreneur as a
"person who focuses on innovation and
creativity and who transforms a dream or an
idea into a profitable venture, by operating
within the organizational environment."

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 Learning organizations encourage intrapreneurship.

 Organizations want to form:

 Product Champions: people who take ownership of a

product from concept to market.
 Skunkworks: a group of intrapreneurs kept separate from
the rest of the organization.
 New Venture Division: allows a division to act as its own
smaller company.
 Rewards for Innovation: link innovation by workers to
valued rewards.

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Intrapreneur = someone in an existing
organization who turns new ideas into profitable
realities.

Not every employee has the ability to become a

successful Intrapreneur. It takes well-developed
strategic action, teamwork and communication
abilities.

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 Entrepreneurs are people that notice
opportunities and take the initiative to
mobilize resources to make new goods and
services.

 Intrapreneurs also notice opportunities and

take initiative to mobilize resources,
however they work in large companies and
contribute to the innovation of the firm.

 Intrapreneurs often become entrepreneurs.

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Basis for Entrepreneur Intrapreneur
Comparison
Meaning Entrepreneur refers to a Intrapreneur refers to
person who set up his own an employee of the
business with a new idea or organization who is in
concept. charge of undertaking
innovations in product,
service, process etc.

Approach spontaneous healing

Resources Uses own resources. Use resources provided
by the company.
Capital Raised by him. Financed by the
company.
Enterprise Newly established An existing one
Dependency Dependent Independent
Risk Borne by the entrepreneur Taken by the company.
himself.
Works for Creating a leading position Change and renew the
in the market. existing organizational
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 Entrepreneurship is more than the mere
creation of business:
 Seeking opportunities
 Taking risks beyond security
 Having the tenacity to push an idea through to
reality
 Entrepreneurshipis an integrated concept
that permeates an individual’s business in an
innovative manner.

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 Entrepreneurship is the process of creating
something new with value of devoting the
necessary time and effort, assuming the
accompanying financial, psychic and social
risk and receiving the resulting rewards of
monetary and personal satisfaction and
independence.

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 Pioneer
 Perspective
 Practice
 Performance

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 Pioneer - a person who is one of the first
people to do something.
 Perspective a particular way of considering
something.
 Practice - action rather than thought or
ideas.
 Performance - how well a person, machine,
etc, does a piece of work or an activity.

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Entrepreneur Entrepreneurship
Person Process
Visualizer Vision
Organizer Organization
Decision maker Decision Making
Innovator Innovation
Risk bearer Risk bearing
Motivator Motivation
Creator Creation
Leader Leadership
Manager Management
Initiator Initiation
Planner Planning
Technician Technology
Communicator Communication
Administrator Administration
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PROF.BASAVARAJ S MAMMANI 6/14/2019
 Evolution of
Entrepreneurship
1. Earliest period : Marco polo is an early example of an
entrepreneur who attempted to establish trade route to far east.
Marco polo would sign contract with money person to sell his
goods. When the merchant adventurer took the role of trading
,bearing all physical and other risk. After his successful selling
of goods and completing his trip, the profit were shared by the
capitalist and merchant.

2. Middle ages : in middle ages entrepreneur were more

described as actor, person, manager. His job was to manage
large projects. He was merely managing the business while
the risk was borne by the government of the country and not
the entrepreneur. A typical entrepreneur in middle ages were
the clerk in charge of great architecture.
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3. 17th century manager : emerging connection of
risk with entrepreneurship developed with 17th
century. In this stage entrepreneur entered in contract
with government were payment to be made to
capitalist was fixed and after fixed payment, profit or
loss incurred through the business had to be borne by
entrepreneur.
E.g. Richard Cantillon a noted economist and author
in 1700 understood laws mistake. He developed one
of the early theories of the entrepreneur and is
regarded some as the founder of the term. He viewed
entrepreneur as risk taker. He was the first person to
recognize the role of entrepreneur in economic
theory. He stressed on the entrepreneur and not his
personality.

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 As a result of industrialization during century
the person with capital(capitalist) is
differentiated from the person who needs
capital (entrepreneur).
 Many of the technical inventors did not have
money to turn their invention into products.
Hence some capitalist had to finance them

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 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. Cont....

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 Concept of innovation and newness is the integral
part of entrepreneur which not only requires the
ability to create and conceptualize but ability to
understand forces at work environment. The
newness in the concept can be in the following
ways :
a. Introduction of new or quality goods
b. Introducing new method of production
c. Utilization of new source of raw material
d. Carrying out new organizational form of industry.

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6. 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
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 The entrepreneurial development is a key to
achieve overall economic development through
higher level of industrial activity.
 It is a process in which persons are injected with
motivational drives of achievement & insight of
tackle uncertain & risky situations especially in
business undertakings.
 The process of development focuses on training,
education, reorientation & creation of conducive &
healthy environment for the growth of enterprises.

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 DEVELOPMENT OF ENTREPRENEURSHIP
1. Government and non government support bodies
: government in country has come up with various
institution for supporting SSI they are national
institute for entrepreneurship and small business
development ( NIESBUD ) was established in 1983
by the ministry of micro, small and medium
enterprise. Entrepreneurship development institute
in India ( EDI ) an autonomous body and non profit
institution set up for supporting SSI in country .

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2. Incubation facility : premiere business schools and
technical institution in India have entrepreneurship
centres which provide incubation facility to start up
small scale unit. Incubator is facility designed to
assist start up companies with respect to providing
knowledge and technical assistance.
3. Educational programs : entrepreneurship is be
coming popular choice as an elective in MBA
programs at business schools in India. In addition to
educational programs their are some business school
which provide certification programs and training to
candidates intending to start up their own business.

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4. Entrepreneurship networks : refers to association
formed by successful entrepreneur where by
becoming member of such association fresher's will
get some guidance and assistance to start up their
own business. E.g. TIE : The Indus Entrepreneurs
was founded in silicon valley in 1992 by successful
entrepreneurs and professionals in country. National
Entrepreneurship Network ( NEN ) founded in 2002
is the non profit initiative working to inspire and
educate emerging entrepreneurs in company.

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 People and empowerment focused
 Value creation through innovation and
change
 Attention to the basics
 Hands-on management
 Doing the right thing
 Freedom to grow and to fail
 Commitment and personal responsibility
 Emphasis on the future and a sense of
urgency

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STAGES IN ENTREPRENEURIAL PROCESS

Identify an opportunity

Establish vision

Persuade others

Gather resources

Create new venture, product or market

Change/ adapt with time

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 Identify an opportunity : is an first step towards
setting up an enterprise. Entrepreneur before
identification of an opportunity should do proper
market analysis about market situation, economic
conditions and understand taste preference of
customers.
 Establish vision : is second step towards
establishing an enterprise. In the process
entrepreneur is required to establish long term
vision and accordingly plan in mission which will
serve as roadmap to achieve company vision.
Objectives established by entrepreneur should be
flexible in nature to adjust according to changing
situation.

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 Persuade others : even though the idea of
entrepreneurship is initiated by individual person, it
requires team effort to covert an idea into reality.
Entrepreneur is required to convince skilled
employees to work on business plan, make investors
and marketers understand credibility of business to
enhance status and goodwill of company in business
market.
 Gather resources : next step towards
entrepreneurship requires gathering of required
resources to start business. Resources includes
a. Finance resources : it refers to getting required
capital through financial institutions, raising capital
through general public by issue of shares, raising
required finance though other resources such as self
investment, finance through family and friends.
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b. Operating resources refers to tangible and
intangible resources which includes machinery, raw
material, company image, operating procedure,
transportation etc.
c. Human resources refers to skilled labour force in
organization and other decision in relation to human
resource such as training and development of
employees, decision to hire permanent or temporary
employees, amount of investment to be made of
human resource in organization.

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d. Information resources : it is very important on part
of organization to collect information about
competitors, customers taste and preference, recent
development in area of business company will be
operating. The company has to maintain valid and
accurate management information system in order to
suffice to the information needs of company.

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 create new venture : once the entrepreneur has
arranged in for resources mentioned above, next
step involves creation and establishment of new
venture. Which requires fulfilment of various legal
formalities.
 Change and adapt with time : initial plan
developed by entrepreneur may not be suitable for
long run. So business plan is required to be updated
on regular basis to cope up with recent trends or
updation in market.

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 ROLE OF ENTREPRENEURSHIP IN
ECONOMIC DEVELOPMENT
1. Create employment opportunities :
unemployment is major problem faced by
developing and under developing countries around
the world. As small scale industries are labour
intensive in nature they generate more
employment opportunities rather then large scale
industries in country.
2. Inspire others towards entrepreneurship : team
created by entrepreneurship provides opportunity
for employee cum tem mates to have first hand
experience in process of setting up an venture
creating possibility for team mate to come up with
his own SSI in future.

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3. Create knowledge spill over : entrepreneurship
serves as mechanism by which knowledge over to
the firm in which it is commercialized. New firm
gets the benefit by the experience and knowledge
gained by the founder in the company.
4. Augment the number of enterprise : augment
refers to making basic comparison and trying to find
out area in which competitors are ahead.
Entrepreneurship not only leads to formation of new
business but also brings into picture idea or new
concept in market exploring almost all the available
areas in market creating tuff competition in market
thus leading to supply of quality products in market.

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5. Provide diversity in the firms : entrepreneurship
activity in particular region often results into
creation of variety of firms in country. These firms
operates into diverse activities and these diversity
fosters economic development in the country.

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 It has started as family business known to be
around 1850s with the strating of cotton mill in
Mumbai
 Cotton mill to manufacture, to service,
electronic goods etc…
 Past “business community” was involved in trade
and commerce. The community is presently
know as “vaisyas” or “banias”
 The skills of any enterprise was inherited from
ancestors
 All the members of the family were involved in
the business from planning to manufacture stage
and finally selling them
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 Present- there is tremendous growth of
industries services over last 50 – 60 years
 J R D TATA
 NARAYANA MURTHY
 SHIV NADAR
 TULSI TANTI……….

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 Lack of capital.
 Lack of technical knowledge.
 Economics business cycle.
 Non availability of raw materials and
resources.
 Government regulations.
 Obsolescence of technology or idea.
 Unstable and unpredictable markets.
 Globalization and entry of foreign goods.
 Risk.

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