Chapter 01

Entrepreneurship and the

entrepreneurial mind set
 What is entrepreneurship?

The word derived from French word “entreprendre”,

means the individuals who were “undertakers”

Practical history TAX ENTREPRENDRE (14TH CENTRY)

 What is entrepreneurship?
NAME YEAR DEFINITION
Richard 1755 Buy at a certain price and sell at an uncertain
Cantillon price, therefore assuming risk.
Adam Smith 1776 Individual who undertook the formation of an
organization for commercial purpose
John Stuart 1848 Entrepreneur is a business founder
Mill
Carl Menger 1871 The change agent who transforms resources
into useful goods and services for making
industrial growth
Ronstadt 1984 Entrepreneurship is the dynamic process of
creating incremental wealth by taking risk and
offering new or may not be new value.
 The nature of entrepreneurship

Action
Opportunity
Knowledge

Doubt Motivation
 How entrepreneurs think?

1.Think structurally

2.Engage in bricolage

3.Effectuation

4.Cognitive adaptability
Successful entrepreneur Unsuccessful entrepreneur
Accept a project only if it is intrinsically Accept a project if it enjoys the
viable and enjoys one’s confidence support of external agencies

Minimize initial investment Invest as per experts’ recommendation

Minimize borrowed funds Borrow as much funds are available

Learn the technology involved in the Manage the technology through paid
business workers

Accept partners if they are Accept partners if they can contribute

comfortable to work with a share of capital

Test market before commercialization Produce and sell without market

testing
Start small and grow steadily Start relatively big by using external
resources
Entrepreneurial heuristics orientation

• Intrinsic orientation
• Organic growth orientation (no blue print)
• Entity orientation (no property orientation)
• People orientation (no self orientation)
• Vision orientation
 Entrepreneurial intentions
• Means motivation (consistency) to the
entrepreneurial outcome
• Depends on-
– Entrepreneurial self efficacy- confidence to be
successful.
– Perceived desirability- favorable evaluation to the
successful outcome.
 Entrepreneurial background and
characteristics
• Education
– To encounter problems.
– Formal education is not important, but it gives a good background
for the relevant venture.
– General education is also important because it facilitates the
integration and accumulation of new knowledge and opportunity.
– In an Indian research, it has been found that most of the
entrepreneurs have moderate levels of formal education.
• Age
– 22 to 45.
– 25,30,35,40 are the milestone.
• Work history
 Role models and support systems

• Moral support system

– Individuals who give psychological support.
– Friends, relatives are the source of moral support
system.
• Professional support system
– Individuals who help in the business activity
– Mentor, business associate, suppliers, trade
associates,