Download - Entrepreneurial Management (EM 01) - Entrepreneurship

Management01 - Entrepreneurship

Suhas Dutta

Content (c) Copyright 3nayan Consulting. All rights reserved, 2014 - 18.2

Sir Richard Bransonon Entrepreneurship

E:/VIDEO/BMA/Sir Richard Branson On Entrepreneurship.mp4

E:/VIDEO/BMA/Sir Richard Branson On Entrepreneurship.mp4

Syllabus Coverage

• Introductiono Meaning & Definition of Entrepreneurship, Entrepreneur & Enterpriseo Differences between Entrepreneurship, Entrepreneur & Enterprise

• Functions of Entrepreneuro Role of Entrepreneur for Economic Developmento Factors influencing Entrepreneurshipo Pros and Cons of being an Entrepreneur

• Differences between Manager and Entrepreneuro Qualities of an Entrepreneuro Types of Entrepreneur


Learning objectives

• Who is an entrepreneur ando What are his /her functions, qualities,

contributiono What are the types of entrepreneurso Distinction between a manager and

an entrepreneuro Highs / lows of being an

entrepreneur

• What is entrepreneurshipo What influences entrepreneurshipo What are entrepreneurial

competencies and how can the be developed

• Entrepreneur Vs. Entrepreneurship Vs. Enterprise


Entrepreneur

• Credit for coining the term, generally, goes to theFrench economist Jean-Baptiste Say,o But in fact the Irish-French economist Richard

Cantillon defined it first

• Cantillon defined the term as a person who paysa certain price for a product and resells it at anuncertain price: "making decisions aboutobtaining and using the resources whileconsequently admitting the risk of enterprise."


Entrepreneur is originally aFrench word - anindividual who organizesor operates a business orbusinesses.

The word first appeared inthe French dictionaryentitled "DictionnaireUniversel de Commerce"compiled by Jacques desBruslons and published in1723.

Definitions of “Entrepreneur”1734: Richard Cantillon Entrepreneurs are non-fixed income earners who pay known costs of production but earn

uncertain incomes

1803: Jean-Baptiste Say An entrepreneur is an economic agent who unites all means of production- land of one, the labour of another and the capital of yet another and thus produces a product. By selling the product in the market he pays rent of land, wages to labour, interest on capital and what remains is his profit. He shifts economic resources out of an area of lower and into an area of higher productivity and greater yield.

1934: Schumpeter Entrepreneurs are innovators who use a process of shattering the status quo of the existing products and services, to set up new products, new services.

1961: David McClelland An entrepreneur is a person with a high need for achievement. He is energetic and a moderate risk taker.

1964: Peter Drucker An entrepreneur searches for change, responds to it and exploits opportunities. Innovation is a specific tool of an entrepreneur hence an effective entrepreneur converts a source into a resource.

1975: Howard H. Stevenson (HBS)

Entrepreneurship is the pursuit of opportunity without regard to resources currently controlled.

1975: Albert Shapero Entrepreneurs take initiative, accept risk of failure and have an internal locus of control.

2013: Ronald May An Entrepreneur is someone who commercializes his or her innovation.


Definitions of “Entrepreneur” (Contd.)

• The common elements are:o Innovationo Risk takingo Commercialization o New products / services


Relevance of an entrepreneur

• The need arises from the need to speed up and activate the factors of productiono Leads to economic growth

o Develops backward and tribal areas by creating employment opportunities

o Improves the standard of living of the weaker sections of the society


Relevance of an entrepreneur


47

1

8

9 2

3

6 5

1 Commercializing new inventions, develop technologies

2 Re-structuring andtransforming the economy

3 Breathe vitality into large organizations, serve the government

4 Reduce ossification of social institutions, and concentration of economic power

5 Make markets more competitive, stabilise staticand dynamic market efficiency

Stimulate redistribution of wealth, income and

political power

6

Improve social welfare of a country by harnessing

overlooked talent

7

Create new markets andfacilitate international

expansion

8

Help in job creation, raise productivity

9

Functions of an entrepreneur


PUBLIC RELATIONS

PROJECT DECISION

RAISING FINANCE

PRODUCTION PLANNING

MARKET RESEARCH

RISK BEARING

INNOVATION

MANAGERIAL FUNCTIONS

Characteristics of a successful entrepreneur


Hard work Self confidence

Ambition Independent

Innovation Involvement

Intelligence Initiative

Creativity Business secrecy

Foresight Accepting challenges

Communication ability Risk taking

Technical knowledge Motivating

Administration & Organizational capability

Determination & perseverance

Public relations Goal oriented

Qualities of an entrepreneur


Motivation Dynamism Self confidence Ambition

Creativity Aptitude Intelligence Stress taking

Vision Adaptability Knowledge Clarity

Organising ability Will power Commitment Opportunity explorer

Pride Determination Instinct Integrity

Risk taking Tactfulness Foresight Dedication

Optimistic

Types of entrepreneurs


Aggressive assemblage of ideasDevelops a business by novel combination of factorsINNOVATIVE ENTREPRENEUR

The adoptive entrepreneurImitates other successful modelsIMITATIVE ENTREPRENEUR

Timid and cautious Imitates other models carefullyFABIAN ENTREPRENEUR

Restricts entrepreneurial activity to one or two innovationsDRONE ENTREPRENEURClarence H Danhof

Types of entrepreneurs (contd.)


Little revolutionary, follows heuristicsEMPRICIAL ENTREPRENEUR

Qualified, well informed and introduces revolutionary changesRATIONAL ENTREPRENEUR

Timid, well informed and introduces some new things after seeking advice and services of expertsCOGINITIVE ENTREPRENEUR

Arthur H. Cole

Types of entrepreneurs (contd.)

AREA Urban Rural

GENDER Male Woman

TECHNOLOGY Technical Non-technical Professional

BUSINESS Business Trading Industrial Corporate Agricultural

GROWTH Growth Super-growth

MOTIVATION Pure Induced Motivated Spontaneous

OWNERSHIP Private Public

DEVELOPMENT First generation Modern Classical

OTHERS Inherited Forced Immigrant


Entrepreneur Vs. Manager

Areas Entrepreneur Manager

Status Owner of the enterpriseShould be able to perform all functions

Works for an enterpriseAppointed to manage

Risk Bears all risks No, or low risks

Motive Personal or social gain Renders service in lieu of compensation

Rewards Rewards for risk bearing Salary as reward for work

Innovation Is the innovator Is the executor

Qualifications Should possess entrepreneurial qualities

Should possess specific qualification for the job


The entrepreneur differs from the professional manager in that he undertakes a venture for his personal gratification. Usually!

Women entrepreneurs

“A small scale industrial unit / industry relatedservice or business enterprise, managed by oneor more women entrepreneurs in proprietaryconcerns, or in which she /they individually orjointly have a share capital of not less than 51%as partners /shareholders / directors of privatelimited company / members of corporatesociety”


Ekta KapoorBalaji Telefilms

Shahnaz HussainShahnaz Herbals

Swati PiramalPiramal Healthcare

Kiran MazumdarShawBiocon

Amira ShahMetropolis Healthcare

Sairee ChahalFlexi-moms

Problems of women entrepreneurs

Problem of finance Low risk bearing capacity Limited mobility

Male dominated society Family involvement Competition

Lack of education Scarcity of raw materials Sexual harassment

Shortage of power High cost of production Recession

Initial hesitation and inhibitionLack of experience and information

Lack of freedom

Lack of encouragement False sense of security Fear of failure


Pros and Cons of being an entrepreneur

Pros (Advantages) Cons (Disadvantages)

Love for doing independent business Risks

Self employment Time keeping

Source of income Long hours

Alternative wage employment Making decisions

Being one’s own boss Stress

Freedom


Definitions of entrepreneurshipSource Definition

Knight (1921) Profits from bearing uncertainty and risk

Schumpeter (1934) Carrying out of new combinations of firm organization—new products, new services, new sources of raw material, new methods of production, new markets, new forms of organization

Hoselitz (1952) Uncertainty bearing...coordination of productive resources... Introduction of innovations and the provision of capital

Cole (1959) Purposeful activity to initiate and develop a profit-oriented business

McClelland (1961) Moderate risk taking

Casson (1982) Decisions and judgments about the coordination of scarce resources

Gartner (1985) Creation of new organizations

Stevenson, Roberts, & Grousbeck (1989); The pursuit of opportunity without regard to resources currently controlled

Shane & Venkataraman (2000) A field of business seeks to understand how opportunities create something new…

Kuratko & Hodgetts (2004) A dynamic process of vision, change and creation…

Allen (2006) A mindset or way of thinking that is opportunity focused, innovative and growth-oriented. Can be found in large corporations and socially responsible not-for-profits…


Definitions of entrepreneurship (contd.)

• The common elements are:o Creativity and innovationo Resource identification, acquisition, and

marshalingo Economic organization

o Opportunity for gain (or increase) under risk and uncertainty


Forbes 20 most promising entrepreneurs in Africa 2014Christian Ngan Senai Wolderufael Eric Kinoti Nick Kaoma Ronak Shah

CameroonMadlyn Cazalis(bio cosmetics)

EthiopiaFeed Green Ethiopia Exports Company (spice blends)

KenyaShades System East Africa(tenting)

South AfricaHead Honcho Clothing(apparel)

KenyaKronex Chemicals Ltd(household cleaning supplies)

Patrick Ngowi Heshan de Silva Julie Alexander Fourie

Sangu Delle Uche Pedro

TanzaniaHelvetic Group(solar power systems)

KenyaDSGVenCap(travel insurance with bus tickets)

South AfricaiFix(Apple, samsung phone repair)

GhanaGolden Palm Investments(early stage VC)

NigeriaBellaNaija(new media)

Bankole Cardoso Isaac Oboth Barclay Paul Seth Akumani Jonathan Liebmann

NigeriaEasyTaxi Nigeria(Taxi mobile app)

UgandaMedia256(telly production)

KenyaImpact Africa Industries(low cost sanitary pads)

GhanaClaimSync(claims processingsoftware)

South AfricaPropertuity(real estate)

Issam Chleuh Tebogo Ditshego Tunde Kehinde Adii Pienaar Zaheer Cassim

MaliAfrica Impact Group(socially relevantinvesting)

South AfricaDitshego Media(PR firm)

NigeriaJumia Nigeria(online retailer)

South AfricaWoothemes(Wordpress themes, plugins)

South AfricaOne Way Up Productions(telly production)


Of the next 10, there are

5 Kenyans,1 Nigerian,

2 Egyptians,1 South African,

and 1 Cameroonian

Entrepreneurship – influencing factors

South Africa, 7

Kenya, 9

Nigeria, 4

Egypt, 2

Ghana, 2

Tanzania, 1

Cameroon, 2


Entrepreneurship – influencing factors

South Africa, 7

Kenya, 9

Nigeria, 4

Egypt, 2

Ghana, 2

Tanzania, 1

Cameroon, 2


ECONOMIC FACTORSCapitalLabourRaw MaterialsMarket

NON-ECONOMIC FACTORSSocial ConditionsSocial MobilityMarginalitySecurity

PSYCHOLOGICAL FACTORSNeed AchievementWithdrawal of status / respect

OTHER FACTORSAvailability – tech know howState of art / cultureExistence of marketGovernment policies

Entrepreneurship

• Entrepreneurship, is the control and deployment of resourcesto create an innovative economic organization (or network oforganizations) for the purpose of gain or growth underconditions of risk and uncertainty.


INPUT

Resources

OUTPUT

Innovative Economic Organization

PROCESSControl & Deployment

GAINand / or

GROWTH

UNCERTAINTY

RISK

Entrepreneurship – creation & innovation

• Schumpeter’s categories of “new combinations” are:o A new product or service offered?o A new method or technology employed?o A new market targeted and opened?

o A new source of supply of raw materials and resources used?

o A new form of industrial organization created? (rarest of all ?)


Entrepreneurship – then and nowThen Now

Small-business founderBossLone RangerSecretiveSelf-reliantSeat of the pantsSnap decisionsMale ownership

True entrepreneurLeaderSocial and business networkerOpenInquisitiveBusiness planConsensusMixed ownership

Idea Execution

Knows the trade Knows the business

Automation Innovation

Born with it Made with practice


Entrepreneurial competencies


The characteristics possessed by an entrepreneur which result insuperior performance are called “Entrepreneurial competencies”

Collection and retention ofinformation in one’s mind.Entrepreneur also needsskills to translateknowledge into action

Ability to translate andtransform a system.Both knowledge and skillsare needed.

Tool which helps in activatinggoals. The concern ofachievement of goals leads aperson to perfection.

Knowledge

Skill

Motive

Entrepreneurial competencies (contd.)


GOAL

ORIENTED

INDEPENDENT

COMMITTED

EFFECTIVE

STRATEGIST

PROBLEM

SOLVER

SELF

CONFIDENT

INITIATIVE

INFORMATION

SEEKER

OPPORTUNISTIC

QUALITY

CONSCIOUS

PERSISTENCE

EFFICIENCY

SEEKER

ASSERTIVE

EMPLOYEE

WELL WISHER

PERSUASIVE

PLANNER

Developing competencies


Competencies thru EDPs

Self assessment

Feedback Practice

Discussion

• What is the relationship between an entrepreneur, entrepreneurship and an enterprise?

• What could cause a discord between these three?


PROCESS OPTIMIZATION TRANSFORMATION

GROWTH SUSTENANCE STARTUP ADVISORY

OUTSOURCING , OFFSHORING

STRATEGY

PROCESS ENGINEERING

IT ADVISORY, IT STRATEGY, CIO ON TAP

SALES PROCESS MANAGEMENT

DIGITAL STRATEGY AND

IMPLEMENTATION

TALENT MANAGEMENT

DELIVERY / PROJECT / PROGRAM / PORTFOLIO

MANAGEMENT

LEARNING STRATEGY, CONTENT

DEVELOPMENT

LEADERSHIP , SOFT SKILLS

TRAINING

RETAIL / CONSUMER PRODUCTS

Stranzex ConsultingO Bangalore, Mumbai & NCR Delhi

W 3nayan.in

E [email protected]

Suhas Dutta

Experience . Agility. Passion