ASSIGNMENT 1-Explain the characteristics of Entrepreneurship. Ans.

Following characterstics of entrepreneurship : Innovation: A businessman, who simply behaves in traditional ways, cannot be an entrepreneur. Innovation involves problem solving and the entrepreneur is a problem solver. According to Schumpeter entrepreneurship is a creative activity. An entrepreneur is basically an innovator who introduces something new in the economy.

(2) High Achievement: People having high need for achievement are more likely to succeed as entrepreneurs. The achievement motive is, by assumption a relatively stable enduring characteristic of an individual. Achievement motive can be increased by deliberate efforts. Various studies on psychological roots of entrepreneurship reveal the presence of high achievement among successful entrepreneurs.

(3) Managerial Skill and Leadership: According to B.F. Hoselitz, managerial skills and leadership are the most important facets of entrepreneurship. Financial skills are only of secondary importance. A person who is to become an industrial entrepreneur must have more than the drive to earn profit. He must have the ability to lead and manage.

(4) Group Level Pattern: Entrepreneurial characteristics are found in clusters which may qualify themselves as entrepreneurial groups. Entrepreneurial activity is generated by the particular family background, experience as a member of certain groups and as a reflection of general values.

(5) Organisation Building: According to Harbison entrepreneurship implies the skill to build an organisation. Organisation building ability is the most critical skill required for industrial development. This skill means the ability to multiply one self by effectively delegating responsibility to others.

(6) Gap Filling Function: The most significant feature of entrepreneurship is gap filling. It is the job of the entrepreneur to fill the gap or to makeup the deficiencies which always exist in the knowledge above the production function. Some inputs like motivation and leadership are vague and their output is indeterminate. An entrepreneur has to Marshall all the inputs to realise the final product.

(7) Status Withdrawal: According to Hagen creative innovation or change is the fundamental feature of economic growth. An entrepreneur is a creative problem solver interested in things in practical and technological realm. He feels a sense of increased pleasure when facing a problem and tolerates disorder without discomfort. In traditional societies, position of authority was granted on the basis of status, rather than individual ability. Hagen visualized an innovative personality in contrast to such authoritarian personality.

(8) A Function of Social, Political and Economic Structure: Entrepreneurs are not equally distributed in the population. Minorities have provided most of the entrepreneurial talent but all the minorities are not important sources of entrepreneurship. Entrepreneurial supply depends upon the four structure viz. limitation structure, Demand structure, opportunity structure and labour structure. However entrepreneurship depends on rather specific combinations of circumstances which are difficult to create and easy to destroy.

2-What is the different between Manager and Entrepreneurship? Explain briefly. Ans.2. Sometimes, an entrepreneur and a manager are considered as synonymous. The two terms are used interchangeably. In fact, the two terms differ in their meaning. The major points of distinction between the two are presented as follow:

1. An entrepreneur is the owner of the enterprise but A manager is just an employee in the enterprise of the entrepreneur. 2. The main motive of an entrepreneur is to start a venture by setting up an enterprise. But the main aim of a manager is to render services to an entrepreneur. 3. An entrepreneur, being the owner of the enterprise assumes all risks and uncertainty. But a manager as the servant does not share any risk involved in the enterprise. 4. The reward of an entrepreneur is profit. But the reward of a manager for rendering his services is salary. 5. All the policies and strategic decisions like expansions, diversification, takeovers, mergers, capital budgeting, pricing policies etc. are taken by entrepreneur. But all the managerial and operational decision relating to day-to-day activities of enterprise are taken by manager. 6. An entrepreneur acts as an innovator to maximize the profits. But a manager simply implements the policies prepared by entrepreneur and gives them practical shape. An entrepreneur is a person who is motivated to satisfy a high need for achievement in innovative and creative activities. He is a great motivator to start his new business and manage it successively. He is the investor and takes risk in the enterprise. He perceives and exploits opportunity and works for his satisfaction to get positive results, whereas a manager (Professional Manager) takes care of the general functions of running an organisation such as strategic planning, operation planning, organising the resources, staffing, coordination, motivation and controlling work of the organisation. Normally a professional manager acquires such knowledge through formal education and training. He has to work within the policy framework set by the entrepreneurs (owners) of the organisation. Management, as a scientific discipline, and managers as practitioners of it, are concerned with the control and maximization of a firms resources. These resources may include

capital assets, human resource assets, customer assets, and processes. Managers thrive in and prefer relatively predictable and stable environments which enable them to steadily and incrementally improve utilization, nurture talent, cut costs, eliminate waste, and shorten development cycle times to extract more profits from same assets. That said, the ability for a manager to effect change in an organization is constrained by the inertia of his assets. A five percent annual improvement in productivity at a large industrial firm, such as GE, is considered to be an extremely successful result. Entrepreneurs, on the other hand, are innovators and disrupters who are naturally antagonistic to the stable environment and incremental approach espoused by managers; they have little interest in maintaining the status quo since since they cannot effectively compete against established players with well-oiled processes. The individual entrepreneur has no assets to start with and moves quickly to adopt new approaches and aggressively tackle opportunities in new markets and can thus afford to be disruptive as they have no well-established assets to lose. In the end, their advantage stems from the speed with which they can move in rapidly changing environments. In many cases, the relationship between entrepreneurs and managers is an adversarial one, fraught with misunderstandings and caricatured impressions of each other. Managers look upon entrepreneurs as whimsical and even capricious in their approach to business whereas entrepreneurs view managers as stodgy, hidebound, and potentially as impediments to change. The irony is that every successful entrepreneur ends up creating assets that need to be continuously kept productive and optimized by someone with managerial expertise. As a startup expands, the entrepreneur must transform himself into a highly effective manager, otherwise he risks serious damage to his own business; but that is very hard to do. As a firm starts to grow rapidly, the founders skillset has to expand at an even faster pace to stay ahead of the business requirements. He has to learn new skills and unlearn old ways of conducting business which were better suited to a business in its infancy. In most cases, it is much more effective to hire a manager to help manage the core of the business

while the entrepreneur pushes the envelope at the fringes. As the company matures, entrepreneurs often retire or move back into the startup world. In certain cases, the entrepreneurs and their startups become acquisition targets by managers looking to induce growth in large companies. A well-balanced team of entrepreneurs and experienced managers, bound together through mutual respect, can significantly propel an enterprise. At Google, Manu witnessed this first hand with Eric Schmidt coming in and acting as the companys lead manager through his role as CEO. The founders, Larry and Sergey, continued to focus on driving new technologies and strategic relationships. Over the years, Larry learned how to become a better manager of the core businesses without having to be at the reins and disrupting the assets that he had created. This type of symbiotic relationship between experienced managers and entrepreneurial visionaries isnt just unique to Google. Steve Jobs would rely on Tim Cook to streamline the supply chain and operations at Apple. Sheryl Sandberg brought sales and organizational expertise to Facebook while Mark Zuckerberg focused on executing his core product vision. Going further back, Bill Gates surrendered day-to-day management responsibilities at Microsoft to Steve Ballmer, so that he, himself, could focus on driving strategy and new technical efforts. The model has proven to be an effective one in the technology industry over the past two decades. Unfortunately, when there isnt mutual respect and intellectual honesty between the manager and entrepreneur the transition is usually disastrous. At Exodus, Kanwal (board of director) saw billions of dollars in equity value dissipate after Ellen Hancock was brought in as CEO. She had little regard for the founder and Chandrashekhar was sidelined. Similarly at Apple, John Scully had little regard for Steve Jobs. Apple stagnated for more than a decade. Yahoo also faced a similar fate. If the incoming manager is led to believe that he is being brought in to fix a problem they very quickly dismiss the entrepreneur. Ultimately, entrepreneurs are creators of new wealth in an economy while managers are conservers of established wealth. Society needs both of them as one brings stability to the

environment while others adds dynamism and fuel for expansion. An economy full of managers without entrepreneurs is likely to stagnate while an economy full of entrepreneurs without managers is likely to be unstable. Japan, an economy entering a third decade of economic stagnation, is a prime example of the first while Nigeria is a good example of the second. In the United States, on the other hand, we have a healthy balance between the two and so our economy is both relatively productive and dynamic compared to other nations.