1. Explain entrepreneurial motivations. What motivates a person to become an entrepreneur?

Factors affects the entrepreneurial experience

An Implementation to Outcome RelationshipThe impact of both extrinsic and intrinsic rewards on sustained behavior Value of rewards and their impact upon sustained behavior

Particular Goals

Attitudes

Willingness
Entrepreneurial Motivation

Backgrounds

2. Elaborate entrepreneurial competencies The general competencies or the motivational factors for entrepreneurs are: Initiative- Desire to do something different and taking a plunge The ability to comprehend opportunity to see what others have missed High degree of persistence in pursuing the entrepreneurial activity Capacity to innovate to reach market with least effort, expenditure and time The identification/recognition of market opportunity and the generation of a business idea (product or service) to address the opportunity Always seeking information The creation of an enterprisewith high degree of concern for quality Dream big and live to let dreams realize and a commitment to work Efficiency orientation Systematic planning Tolerance to failure Ever ready to solve problems High degree of assertiveness Persuasion with his way of argument Use of influence strategies Technical skills Business Management Skills Personal skills/Entrepreneurial 3. What are the risk taking attributes of an entrepreneur? Elaborate. OR How Cognitive theory helps in evaluating Entrepreneurial risk? What are its implications on the entrepreneur?

Cognition is a group of mental processes that includes attention, memory, producing and understanding language, solving problems, and making decisions. Cognitive Theory- Entrepreneurial Risk Entrepreneurs have no greater propensity to bear risk than nonentrepreneurs (Brockhaus, 1980) Entrepreneurs may not necessarily prefer to engage in more risky behavior; their behavior may be the result of framing a given situation more positively than negatively Have rose garden view and avoiding cognitive blind spot (Kahneman and Lovallo, 1994) Conclusions of Cognitive Theory There is no difference in risk propensity between entrepreneurs and non-entrepreneurs When presented with ideal situations, enterprisers will categorize them as having more strengths than non- entrepreneurs When presented with ideal situations, enterprisers will categorize them as having more opportunities and more potential for gain Cognitive theory- implications Since the theory explains the entrepreneurial and non entrepreneurial behavior, it throws certain implications1. It leads to two potential biases- entrepreneurs under estimating the riskiness of their enterprises and non entrepreneurs overlooking promising ventures (sinking boat vis--vis missing boat) 2. Scope for imparting proper training to entrepreneurs 3. A taxonomy of entrepreneurs and non entrepreneurs enhance research efforts in the field

4. What are the advantages and disadvantages of entrepreneurship? Some disadvantages 1. Will need to put in long hours 2. Need money to start 3. Have to keep up with government rules and regulations 4. May have to mark hard decisions (hiring, firing, etc.) 5. May lose money 6. Financial Risk 7. Career Risk 8. Family and Social Risk 9. Psychic Risks 10.All leading to Entrepreneurial Stress

5. How innovation is important for entrepreneurship? The act of innovation provides resources with a new capacity to create wealth. Entrepreneurs convert material into resource or combine the existing resources in a new and more productive manner- The story of Penicillin antibiotic (Alexander Flemming) is the best example. An inventor gives the idea but an innovator uses it for economic gain. 6. What are the sources for business ideas and how do you generate them? Golden rule for generating business ideas- explore resource life and reliability, linkages with resource-owners, infrastructure impediments and opportunities and do value addition by Technology Fulfillment of unsatisfied needs Creating and satisfying new needs Packaging, distribution and so on. Business ideas from existing/ expected enterprises:-

 Similar business- suppose your area is an established centre for any industry, you watch a few projects flourishing in your area and think of setting a venture with certain unique/ special features. Raw materials- suppose you live in an area where there are abundance of specific raw material, generate a business idea out of it. Parts and components- suppose a large company in your area, say automobile company, requires vendors, it is a business opportunitythen think of ancillary unit for supplying metal parts, electrical items, plastic components etc Further processing- you can think of extension of operations of existing company- example, dying and printing the cloth if there are power looms in your are

7. How entrepreneur was viewed upon in the history of Economic Theory? Entrepreneurship is a least understood topic in economics. For most of the 20th Century, the entrepreneur disappeared from the economics literature due to the domination of equilibrium economic models demand and supply determine the price (The supply curve shows the quantity supplied at a given price by profitmaximizing firms. The demand curve shows the quantity demanded at a given price by utility-maximizing consumers. The intersection of the supply curve and the demand curve is the point that maximizes both profits and utility) Richard Cantillion (1775) was the first to recognose the role of Entrepreneur. He stressed on the function of entrepreneur in economic theory- the farmer is an entrepreneur who promises to pay the land owner for his farm or land, a fixed sum of money without assurance of the profit he will derive from the enterprise. 8. What constellation of forces acted as growth engines in promoting entrepreneurship in the 20th and 21st centuries?

 Rise of Knowledge Intensive Industries resulting in the rise of technopreneurs Liberalization and Globalization trends resulting in to dismantling of licence-raj and deterritoralization in business activities Growing literacy and the rise of indigeneous enterprise Growth in infrastructure- thanks to 5 year plans Growing urbanization Growth of Service and Primary Sectors and the gradual decline of Primary Sector Information Technology, growing Social Network, improved communications, data warehousing- World crumbling in to Global Village Reducing trend of cultural barriers Women empowerment resulting in Woman Entrepreneurship Electoral Politics leading to empowerment of Dalits- Dalit Entrepreneurship Nucleus families, decline of joint families- growing entrepreniurial behavior and individualism Family back grounds, gender, age etc

9. What are the things that excite an entrepreneur? OR Can we predict a potential entrepreneur on the basis of traits? Substantiate 10.Differentiate entrepreneurs from non entrepreneurs on the basis of cognitive theory. What is the value of Cognitive theory on Entrepreneurship? Cognition is a group of mental processes that includes attention, memory, producing and understanding language, solving problems, and making decisions. Cognition is studied in various disciplines and usage of the term varies in different disciplines; for example in psychology and cognitive science, it usually refers to an information processing view of an individual's psychological functions Human cognition and implications for entrepreneurship

1. Our capacity to process new info is severely limited and is readily exceeded (overload) 2 We seek to minimize cognitive efforts just as we seek to minimize physical effort (short-cuts in thinking use techniques that reduce mental effort) 3 And because of above two and other factors, we are often less than totally rational in our thinking. Any special relevance for entrepreneurs? 1 Overload occurs more info than they can process 2 New situations and high degree of uncertainty situations in which can not fall back upon existing mental frameworks (schemas in cognitive psychology) 3 Emotions run high complex interplay between feelings and though process. Intense feelings/ emotions distort in many aspects. 4 Time pressure and are in less than optimal physical state (resort to mental short-cuts, physical fatigue and stress etc Entrepreneurs are susceptibility to cognitive biases- reasons are Over load of information Overload of work Multi tasking in the given time frame High level of uncertainty, novelty, emotion and time pressure 11. How the information advantage is utilized by an entrepreneur in opportunity identification? Discuss. Observing the trends- of external and internal Identifying and Solving the problem Identifying Gaps in the Market

12.Describe creative destruction with a few examples. What are the triggers for creative destruction? Creative destruction occurs when a new innovation kills something older. A great example of this is personal computers or Mobile Phones or I Pods The industry, led by Microsoft and Intel, destroyed many mainframe computer companies, but in doing so, entrepreneurs created something new. A term coined by Joseph Schumpeter in his work entitled "Capitalism, Socialism and Democracy" (1942) to denote a "process of industrial mutation that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one." Triggers new consumers goods, new methods of production or transportation, new markets, new forms of industrial organization that capitalist enterprise creates The opening up of new markets, foreign or domestic, organizational development and industrial mutation that ----incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one. 13.How can you promote innovation in an organization? Make a few suggestions. Innovation is successful implementation of a creation. This requires resources which are Availability of qualified personnel Information availability External cooperation and External capital --- Oldenboom and Kleinknechi, 1994 Networking relationships with external sources of information, knowledge and continuous interactive learning, Freeman,1994

Suggestions:To initiate the transition to a new innovation-led governance system, every organization can consider a few steps: 1. Appoint a chief innovation officer (CIO) directly responsible for planting innovation into the DNA of the company who has to introduce companywide programmes to make people understand and use the tools of innovation, like it is done for quality tools in a Six Sigma company. 2. Companies annual reports must contain a detailed section on innovation showing that innovation is not only rhetoric, but contributing to growth. 3. Bring necessary changes in the traditional matrix structure of reporting that stifles the spirit of innovation and does not allow creative deviance in a company. 4. Adopt a corporate philosophy that relies more on knowledge sharing and depth of external networking than secrecy and nondisclosure. 14.Describe the different styles of networking by an entrepreneur. How the style is different from that of small business owners? Both entrepreneurs and non- entrepreneurs use networks for business growth The difference is between the degree and usage Low innovation group lean heavily on personal circle and high innovation group rely on wider circle- professional associations and business associates Methods of networking by high innovators Creation of extended supply chain of sub-contractors Raising financial resources from small investors to ensure control of the enterprise

 Making use of others expertise and knowhow for ones use and for improving quality Keeping high profile in the eyes of public While small business owners tend to delegate marketing function to others, high innovative entrepreneurs rarely delegate marketing function to others. Example, a small company that manufactures high quality products for a reputed dealer would boost the image of the dealer and not of oneself Persons with entrepreneurial bent of mind constantly search for new ideas even if employed from different networks (Manimala) Innovative ways of organizing for initial production networking with ready to use and design specific product networks- why huge financial commitment until market acceptance? Acquiring talented team with networks and dispensing with advertisements Networking for managing growth external resources to be used as and when required it helps to retain agility and flexibility even if they increase the volume of operations

15.Describe Risk and Time implication in entrepreneurship. Distinguish entrepreneurs from non-entrepreneurs on Risk-Time implication. Risk - Variances in outcomes, can be measured Uncertainty- Can not be measured Entrepreneur- can be distinguished by his risk propensity Risk approach by the entrepreneur can be explained by 1. Trait theory 2. Cognitive approach 3. Time implication approach Non- entrepreneurs Short range- low risk behavior & Long range- high risk behavior persons More concerned with short term loss Avoid short range risk Stay away from entrepreneurship since self employment involves extreme outcomes in near future

 Since non-entrepreneurs avoid short range sinking the boat risk, their short term performance outcomes will vary less from their goal as compared to entrepreneurs They take long term high risk anticipating Missing the Boat worries. Variance in goals and achievements in the long run Entrepreneurs- (Craftsman entrepreneur) Short range- high risk behavior & Long range- short risk behavior persons Craftsmen are typical short range high risk persons- have limited time orientation Systematic planning is not their cup of tea. They focus on present time segment and are willing to take high risk akin to sinking the boat 'risk Since Craftsman entrepreneurs take short range sinking the boat risk, their initial performance outcomes vary from their goal as compared to that of entrepreneurs and non entrepreneurs Entrepreneurs- (Opportunistic entrepreneurs) They are growth- oriented and do not believe in comfortable living is enough Consciously plan for distant future Believe in action in present in order not to regret for missing the boat risk More missing the boat risk averse (Dickson, 1986) Since opportunistic entrepreneurs avoid long-range missing the boat risk, their long term performance outcomes will vary less from the original goal as compared to non entrepreneurs and also crafts men entrepreneurs 16.What are the different sources of business ideas? Forests- gum, timber, bamboo, herbs etc

Horticulture- fruits, vegetables and flowers Agriculture- commercial and traditional crops Agro waste- rice husk, straw, ground nut husk Marine- fish, shrimp, crab Mineral- clay, sand, iron and steel etc Animal- sheep form, wool, meat, etc Wind/ Sun- solar energy and wind energy

17.Discuss briefly the methods for generating business ideas. The following are some of the key methods to help generate end test new ideas: Focus Groups these are the groups of individuals providing information in a structural format. A moderator leads a group of people through an open, in-depth discussion rather than simply asking questions to solicit participant response. Such groups form comments in open-end indepth discussions for a new product area that can result in market success. In addition to generating new ideas, the focus group is an excellent source for initially screening ideas and concept. Brainstorming it is a group method for obtaining new ideas and solutions. It is based on the fact that people can be stimulated to greater creativity by meeting with others and participating in organized group experiences. The characteristics of this method are keeping criticism away; free wheeling of idea, high quantity of ideas, combinations and improvements of ideas. Such type of session should be fun with no scope for domination and inhibition. Brainstorming has a greater probability of success when the effort focuses on specific product or market area. Problem inventory analysis it is a method for obtaining new ideas and solutions by focusing on problems. However, instead of generating new ideas, the consumers are provided with list of problems and then asked to have discussion over it and it ultimately results in an entirely new product idea. Governmental/ Non Governmental sources- Department of Small Scale Industries, NABARD, SIDBI and such other establishments, District

Industry Centers, Lead Banks, Commissioner of Cottage Industries, EDI, National Institute of Entrepreneurship and Small Business Development, New Delhi etc. News paper reports, entrepreneurial journals and reports example, Chemical Business or Chemical Weekly,Pharmaceutical Product Founder,Indian Food Industry etc. Industry specific agencies- example, Indian Institute of Horticultural Research, Bangalore, Indian Institute of Packaging, Mumbai, Central Food and Technological Research Institute, Mysore etc. Social Net Working Sites Home Work