Distinction between

Entrepreneur and Manager

 Point of distinction

 Venture
 Risk bearing
 Reward
 Continuity
 Innovation
 Status role
 Prerequisites

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Entrepreneurship and
Intrapreneurship
 Basis of difference

 Dependence
 Capital
 Risk
 Operates

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Entrepreneur Entrepreneurship refers
to refers to
 Visualiser Vision
 Organizer Organisation
 Initiator Initiative
 Innovator Innovation
 Motivator Motivation
 Planner Planning
 Imitator Imitation
 Decision maker Decision-making
 Risk bearer Risk bearing

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Barriers
 Lack of technical knowledge
 Lack of market knowledge
 Lack of seed capital
 Lack of business knowledge
 Social stigma
 Time pressures and distraction
 Legal and bureaucratical constraints
 Patent inhibitions
 Political instability
 Non cooperative attitude of banks and other
institutions

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Problems of Women Entrepreneurs

 Lack of need achievement,economic

independence and autonomy
 Absence of risk bearing capacity
 Lack of education skill
 Male dominating society
 Lack of business information and
experience
 Heavily involved in family problems
 Lack of viable concept
 Social stigma attached to certain
vocations

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Entrepreneurial Competencies or Traits

 Capacity and willingness to assume risk

 Willingness to hard work and be always tenacious
 Vision and foresightedness
 Creative and imaginative thinking
 High need achievement
 Innovativeness and willingness to adapt to change
 Ability to organize resources
 Total commitment,determination and perseverance
 High degree of ambition

 Initiation , watching for opportunities,persistence,information

seeker,quality conscious,commitment to
work,persuation,concern for employees,efficient monitoring.

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Why should you become an
entrepreneur
 You will have the chance to put your ideas
into practice
 You will make money for yourself rather
than for someone else
 You will be your own boss and boss to
other people and make decisions that are
crucial to the business’s success or failure
 You will have the chance to work in a field
or area that you really enjoy
 You will have the personal satisfaction of
creating and running a successful
business.

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Types of Entrepreneurs
 Innovative Entrepreneurs: An
innovative entrepreneur is one who
launches new products, discovers
new markets, establishes new
methods of production and
restructures the enterprise.
Innovative Entrepreneurs can work
only when definite level of progress
has been previously accomplished.
They focus on revolutionalisation and
development.

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Types of Entrepreneurs
 Imitative Entrepreneurs: Imitative
Entrepreneurs adopt victorious
innovations launched by the
innovative entrepreneurs. They
duplicate the technology and
techniques innovated by others and
they are suitable for underdeveloped
countries.

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Types of Entrepreneurs
 Fabian Entrepreneurs: Fabian
entrepreneurs are exemplified by
great caution and skepticism in
experimenting any change in the
organization. They imitate only in
situations where it becomes
necessary to do so.

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Types of Entrepreneurs
 Drone Entrepreneurs: Drone
Entrepreneurs suffer losses, as they
refuse to make any modifications in
the existing production methods.

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Types of Entrepreneurs

 Some of the behavioral scientists

have classified entrepreneurs as
follows
 Solo operators
 These entrepreneurs basically work
alone and if required may recruit few
people.

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Types of Entrepreneurs

 Active Partners
 These entrepreneurs set up an enterprise
as a joint venture and they actively take
part in the activities of the organization.
 Simply partners
 These entrepreneurs contribute funds, but
are not involved in the operations of the
enterprise.

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Types of Entrepreneurs

 Inventors
 These entrepreneurs are involved in
the research and development and
innovative activities.

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Problems of Entrepreneurship
External
Which result from factors beyond the
control of entrepreneur

 Internal
These are not influenced by external forces
they relate to
organisation,structure,production channel
distribution channel,tecnical know
how,training,industrial relations and
inadequacy of management etc

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Internal Problems
 Choice of an idea
 Feeble structure
 Faulty planning
 Poor project implementation
 Poor management
 Poor production poor quality
 Poor quality
 Marketing
 Financial crunch

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 Labour problems
 Capacity utilization
 Lack of vision
 Lack of motivation
 Inadequate training in skills

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External Problems

 Infrastructure
Location
Power
Water
Communication
Financial
Long term funds
Recovery
Marketing
Taxation

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 Raw material
 Industrial and financial regulations
 Technology
 Competitive and volatile
environment
 Government policy
 Administrative hurdles
 Rampant corruption

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 Since the time of independence, the small-
scale sector in India has been a major
contributor to country’s Gross Domestic
Product (GDP). This traditional sector in
India is considered to have huge growth
prospect with its wide range of products.
With 40 percent share in total industrial
output and 35 percent share in exports, the
small-scale industrial sector in India is
acting as Engine of Growth in the new
millennium.

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 The definition for small-scale industrial undertakings
has changed over time. Initially they were classified
into two categories- those using power with less
than 50 employees and those not using power with
the employee strength being more than 50 but less
than 100. However the capital resources invested on
plant and machinery buildings have been the
primary criteria to differentiate the small-scale
industries from the large and medium scale
industries. An industrial unit can be categorized as a
small- scale unit if it fulfils the capital investment
limit fixed by the Government of India for the small-
scale sector.

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 As per the latest definition which is
effective since December 21, 1999, for any
industrial unit to be regarded as Small
Scale Industrial unit the following condition
is to be satisfied: -
 Investment in fixed assets like plants and
equipments either held on ownership terms
on lease or on hire purchase should not be
more than Rs 10 million.

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 The traditional small-scale industries clearly
differ from their modern counterparts in
many respects. The traditional units are
highly labor consuming with their age-old
machineries and conventional techniques of
production resulting in poor productivity
rate whereas the modern small-scale units
are much more productive with less
manpower and more sophisticated
equipments.

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 Khadi and handloom, sericulture, handicrafts,
village industries, coir, Bell metal are some of
the traditional small-scale industries in India.
The modern small industries offer a wide
range of products starting from simple items
like hosiery products, garments, leather
products, fishing hook etc to more
sophisticated items like television sets,
electronics control system, various
engineering products especially as ancillaries
to large industrial undertakings.

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 Nowadays Indian small-scale industries (SSIs) are
mostly modern small-scale industries. Modernization
has widened the list of products offered by this
industry. The items manufactured in modern Small-
scale service & Business enterprises in India now
include rubber products, plastic products, chemical
products, glass and ceramics, mechanical
engineering items, hardware, electrical items,
transport equipment, electronic components and
equipments, automobile parts, bicycle parts,
instruments, sports goods, stationery items and
clocks and watches.

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 Since independence the Government of
India has nurtured this sector with special
care with the following aims: -
 To develop this sector as a major source of
employment 
To encourage decentralized industrial
expansion 
To ensure equitable distribution of income. 
To mobilize capital investment and
entrepreneurship skills

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 Tiny Enterprises

Investment limit in plant and

machinery in respect of tiny
enterprises is Rs 2.5 million
irrespective of location of the unit.

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 Food And Allied Industries
 Textile Products Including Hosiery
 Art Silk/Man-Made Fibre Hosiery
 Wood And Wood Products
 Paper Products
 Leather And Leather Products Including Foo
twear
 Rubber Products
 Plastic Products

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Setting up a small scale industry
 Small scale industries play a key
role in industrialization of a
developing country.
 This is because they provide
immediate large scale employment
and comparatively higher
labour/capital ratio, and moreover
they need a shorter gestation
period.

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Sources of finance
 Long term – More than 5 years

 Medium term – 1 to 5 years

 Short Term – Less than 1 year

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Long Term Sources
 Equity Share
 Preference Share
 Debentures
 Loans from financial Institutions
 Lease financing
 Ploughing back of profits

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Medium Term
 Loans from financial institutions
 Public deposits

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Short Term
 Bank sources
Cash credit
Overdraft
Term loan
Discounting of bills
Non Bank sources
Trade credit
Advances from customers
Accrued Expenses

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Financial and developmental
institutions
 1.All India financial
institutions
IFCI , IDBI , ICICI , HDFC , EXIM
BANK , SIDBI , NSIC:National small
industries corporation
2. State level institutions
SFCs , SIDCs , SSIDCCs

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 SFCs State financial corporation
 SIDCs State industrial development
corporation
 SSIDCs Small state industries
development corporation
 District industries centre

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Subsidy
 Subsidy means a single lump-sum
which is given by a government to
an entrepreneur to cover the cost.
 Bounty denotes a bonus or financial
aid given to an industry to compete
with other units in country or in a
foreign market

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Subsidies in operation
 Export/Import subsidies
 Subsidies for R & D work
 Transport subsidy
 Interest subsidy
 Subsidy for power generations
 Subsidies to artisans and traditional
industries including handloom
 Subsidy/Assistance for technical
consultancy

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Problem of Incentives and Subsidies

 Studies reveal that the incentives

and subsidies are being highly
misused.
 I&S turned out to be ground for
dishonesty
 They have given scope for
favoritism and rampant corruption
 They have become the seeds of
unethical business practices

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National Bank for
Agriculture and
Rural
Development
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 National Bank for Agriculture
and Rural
Development (NABARD) is an
apex development bank in India. It
has been accredited with "matters
concerning policy, planning and
operations in the field of credit
for agriculture and other economic
activities in rural areas in India".

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 NABARD was established by an act of Parliament on
12 July 1982 to implement the National Bank for
Agriculture and Rural Development Act 1981. It
replaced the Agricultural Credit Department (ACD)
and Rural Planning and Credit Cell (RPCC)
of Reserve Bank of India, and Agricultural Refinance
and Development Corporation (ARDC). It is one of
the premiere agencies to provide credit in rural
areas.

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ROLE

1.Providing refinance to lending institutions in rural
areas  
 2.Bringing about or promoting institutional
development and  
 3.Evaluating, monitoring and inspecting the client
banks

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
Besides this pivotal role, NABARD also:  
 •Acts as a coordinator in the operations of rural credit
institutions  
 •Extends assistance to the government, the Reserve
Bank of India and other organizations in matters
relating to rural development  
 •Offers training and research facilities for banks,
cooperatives and organizations working in the field of
rural development  
 •Helps the state governments in reaching their targets
of providing assistance to eligible institutions in
agriculture and rural development

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 NABARD's Roles and Functions
are summarized below:  
 •Credit Functions  
 •Developmental and Promotional
Functions  
 •Supervisory Functions  
 •Institutional and Capacity
building
 •Role in Training
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CREDIT FUNCTIONS

•Framing policy and guidelines for rural financial
institutions  
 •Providing credit facilities to issuing organizations  
 •Preparation of potential-linked credit plans annually
for all districts for identification of credit potential  
 •Monitoring the flow of ground level rural credit

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Development and Promotional
Functions

 Help cooperative banks and Regional Rural Banks to

prepare development actions plans for themselves
   •Enter into MoU with state governments and
cooperative banks specifying their respective
obligations to improve the affairs of the banks in a
stipulated timeframe
   •Help Regional Rural Banks and the sponsor banks to
enter into MoUs specifying their respective obligations
to improve the affairs of the Regional Rural Banks in a
stipulated timeframe
   •Monitor implementation of development action plans
of banks and fulfillment of obligations under MoUs

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 Supervisory Functions

 •Undertakes inspection of Regional Rural Banks (RRBs)

and cooperative banks (other than urban/primary
cooperative banks) under the provisions of Banking
Regulation Act, 1949. 
  •Undertakes inspection of State Cooperative
Agriculture and Rural Development Banks (SCARDBs)
and apex non-credit cooperative societies on a
voluntary basis  
 •Undertakes portfolio inspections, systems study,
besides off-site surveillance of cooperative banks and
Regional Rural Banks (RRBs)  
 •Provides recommendations to Reserve Bank of India
on opening of new branches by State Cooperative
Banks and Regional Rural Banks (RRBs)
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 If I can build a company like Biocon, anyone can…
The first step was to dream however big or small….
If you have a vision, no matter how big or small, a
plan, no matter if it is imperfect, but if there is
passion and conviction for it, success is inevitable."1
 - Kiran Mazumdar Shaw, Managing Director,
Biocon India Limited.

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 In November 2004, Kiran Mazumdar-Shaw (Kiran), the
Chairperson and Managing Director of Biocon India
Limited (Biocon) received the 'Businesswoman of the Year
Award,' from 'The Economic Times of India, a leading
Indian business daily. This award was to be given to a
person who "was global in nature and would have
shareholders' good uppermost in mind. The person should
have followed her heart and vision relentlessly, broken all
glass ceilings and pioneered the cause of women in
business.“ It symbolized the increasing importance of the
role of women in the Indian business arena. One of the
most successful businesswomen in India, Kiran had
received several awards during her career of over 25
years

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 She founded Biocon as an enzyme extraction company in
a rented garage in 1978. By 2004, Biocon had emerged as
the #1 biotech company in Asia, and #16 in the world in
terms of revenues and market capitalization. The
company made its initial offer of shares to the public in
March 2004. The shareholders earned handsome returns
on their investments as the stock, which was offered at Rs
315, touched a high of Rs 780 in early November 2004
Reportedly, Kiran had to break through the 'glass ceiling'
effect on several occasions being a woman entrepreneur
in the traditional Indian society

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 She believed that Indian women can do well in business
even if they don't belong to a business family or have
political influence or immense wealth. Kiran believed that
women in India were not meant for only certain kind of
jobs like teacher, nurse or personal secretary, or for
running a small or cottage industry at the most. She
considered herself a representative of the modern women
who could work shoulder-to-shoulder alongside men and
build mega businesses. Expressing a deep desire for
equality, she said in her award acceptance speech, "I do
hope that in the not-too-distant future, there will be one
award for men and women alike - the Businessperson of
the Year Award."

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 Kiran was born and brought up in Bangalore in the state
of Karnataka, India. She hailed from a middle-class
family, which encouraged her to pursue higher education.
Following the footsteps of her father, who was chief
brewmaster in United Breweries, she went to Ballarat
College in Melbourne, Australia, to specialize in Malting
and Brewing Technology to become India's first woman
brewmaster. Kiran came back to India in 1975 expecting
to get lucrative job offers. However, she did not receive
any. Though she possessed the required technical
qualifications, her chosen profession was completely male-
dominated one. After staying for two years as a consultant
in India, Kiran went abroad and found a job in the UK.

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 There she met Leslie Auchincloss
(Auchincloss), the owner of Biocon
Biochemicals Limited, an Ireland-
based company. Auchincloss was
planning to start a business in
India. The Irish company wanted to
establish its operations in India to
produce simple bio-products from
indigenous raw materials. 

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 The Growth of Biocon
 Biocon started with the manufacture and export of
Papain, a plant enzyme, and Isinglass, a marine
hydrocolloid, which are key products for the brewing
industry. Within two years, Biocon established a
steady flow of exports to Ireland. As the offtake of the
company's products by Ireland grew, Biocon's
manufacturing activity was shifted from the rented
garage to a 20-acre site near Bangalore city in 1983.
Kiran was not content with the steady growth in the
product offtake by the Irish company. In 1984, she
decided to recruit a team to commence research and
development (R&D) in new areas of enzyme
technology.
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 »  Describe the role of an entrepreneur and a leader in
creating a start-up and transforming it into a global player
and a leader in its industry.
 »  Study the role of an entrepreneur in the struggle,
survival and success of a company in the initial and
subsequent stages in the biotech industry.
 »  Analyze the leadership qualities of Kiran and identify
those characteristics that contributed to the success of
Biocon and made it the leading company in the biotech
industry.
 »  Understand the significance and impact of a leader on
an organization's culture and human resources

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