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ENTREPRENEUR
Meaning Of Entrepreneur
Entrepreneur is a person who creates an enterprise. The word Entrepreneur is derived from a
French word enterpendre which means to undertake.
The process of creation is called Entrepreneurship
Definition:
According to International Labor Organization Entrepreneurs are people who have the
ability to see and evaluate business opportunities; together with the necessary resources to
take advantage of them; and to intimate appropriate action to ensure success.
Evolution of the Concept:
Although there is only limited consensus about the defining characteristics of
entrepreneurship, the concept is almost as old as the formal discipline of economics itself.
The term "entrepreneur" was first introduced by the early 18th century French economist
Richard Cantillon. In his writings, he formally defines the entrepreneur as the "agent who
buys means of production at certain prices in order to combine them" into a new product
(Schumpeter, 1951). Shortly thereafter, the French economist J.B. Say added to Cantillon's
definition by including the idea that entrepreneurs had to be leaders. Say claims that an
entrepreneur is one who brings other people together in order to build a single productive
organism (Schumpeter, 1951).
Over the next century, British economists such as Adam Smith, David Ricardo, and John
Stuart Mill briefly touched on the concept of entrepreneurship, though they referred to it
under the broad English term of "business management."
The necessity of entrepreneurship for production was first formally recognized by Alfred
Marshall in 1890.
Marshall believed that entrepreneurs must have a thorough understanding about their
industries, and they must be natural leaders
Since the time of Marshall, the concept of entrepreneurship has continued to undergo
theoretical evolution.
Unfortunately, although many economists agree that entrepreneurship is necessary for
economic growth, they continue to debate over the actual role that entrepreneurs play in
generating economic growth. One school of thought on entrepreneurship suggests that the
role of the entrepreneur is that of a risk-bearer in the face of uncertainty and imperfect
information.
FUNCTIONS OF AN ENTREPRENUER:
The functions of an entrepreneur can be broadly categorized into:
Risk bearing
Innovation
1. Risk bearing - Starting a new enterprise always involves risk and trying for
doing something new and different is also risky. The enterprise may earn
profits or incur losses because of various factors like increasing competition,
changes in customer preferences, shortage of raw materials and so on. An
entrepreneur, therefore, needs to be a risk taker, not risk avoider.
2. Innovation: It is doing some thing new or something different is a necessary
condition to be called as a person as an entrepreneur. The entrepreneurs are
constantly on the look out do something different and unique to meet the
changing requirements of the customers .They may or may not be inventors of
new products or new methods of production ,but they posses the ability to
foresee the possibility of making use of the inventions for their enterprise.
An entrepreneur also performs all the functions necessary right from the genesis of an
idea up to the establishment of an enterprise.viz:
Recruitment
TYPES OF ENTREPRENEUR:
According to the type of
business
According to the
1.business entrepreneur
1.Technical entrepreneur
1.Pure entrepreneur
2.Trading entrepreneur
2.Non-technical entrepreneur
2.Induced entrepreneur
3.Industrial entrepreneur
3.professional entrepreneur
3.Motivated entrepreneur
a.Large
4.High-tech entrepreneur
4.Spontaneous entrepreneur
b.Medium
5.Low-tech entrepreneur
5.Agricultural entrepreneur
1.Growth entrepreneur
1.Urban entrepreneur
a.Plantation
2.Super-growth entrepreneur
2.Rural entrepreneur
b.Horiculture
c.Dairy
d.Forestry
2.Modern entrepreneur
6.Retail entrepreneur
3.Classical entrepreneur
7.service entrepreneur
Others or unclassified
1.Professional
11.International
1.Men entrepreneurs
2.Non-professional
12.Bureaucratic
2.Women entrepreneur
3.Modern
a.Young entrepreneur
4.Traditional
b.Old entrepreneur
5.Skilled
c.Middle-aged entrepreneur
6.Non-skilled
7.Imitating
According to Area
13.Intrapreneur
14.Immigrant
8.Inherited
9.Forced
10.National
Spontaneous Entrepreneur: These entrepreneurs start their business their y natural talents.
Such entrepreneurs have a strong conviction and confidence in their inborn ability.
Growth and Entrepreneurs
Growth Entrepreneurs: Are those who necessarily take up a high growth industry which has
substantial growth prospects.
Super-Growth Enterpreneur:Are those who have shown enormous growth of performance
in their venture. The growth performance is identified by the liquidity of funds, profitability
and gearing.
Entrepreneur and Stages of development
First-generation entrepreneur: Is one who starts an industrial unit by innovative skill.
Modern Entrepreneur: Is one who undertakes those ventures which go well along with the
changing demand in the market.
Classical Entrepreneur: Is one who is concerned with the customers and marketing needs
through the development of a self-supporting venture.
INTRAPRENEUR AN EMERGING CLASS
An organization desiring to establish an intrapreneurial environment must implement
a procedure for its creation. Although this can be done internally, frequently it is easier to use
someone outside to facilitate the process.
The first step in this process is to secure a commitment to intrapreneurship in the
organization by top, upper, and middle management levels.
Second, ideas and general areas that top management are interested in supporting
should be identified, along with the amount of risk money that is available to develop the
concept further.
Third, a company needs to use technology to make itself more flexible.
Fourth, the organization should be a group of interested managers who will train
employees as well as share their experiences.
Fifth, the organization needs to develop ways to get closer to its customers.
Sixth, an organization that wants to become more intrapreneurial must learn to be
more productive with fewer resources.
Seventh, the organization needs to establish a strong support structure for
intrapreneurship.
Eighth, support must also involve tying the rewards to the performance of the
intrapreneurial unit.
Earliest Period
An early example of the earliest definition of an entrepreneur as a go-between is
Marco Polo, who attempted to establish trade routes to the Far East.
Middle Ages
In the Middle Ages, the term entrepreneur was used to describe both an actor and a
person who managed large production projects.
17th Century
The reemergent connection of risk with entrepreneurship developed in the 17 th
century, with an entrepreneur being a person who entered into a contractural arrangement
with the government to perform a service or to supply stipulated products.
18th Century
In the 18th century, the person with capital was differentiated from the one who needed
capital.
19th and 20th centuries
In the late 19th and early 20th centuries, entrepreneurs were frequently not
distinguished from managers and were viewed mostly from an economic perspective.
ENTREPRENEUIRAL CULTURE:
Introduction:
The key growth is to foster entrepreneurial culture and play a pivotal role depending in the
enterprise/organization so that, it will contribute to the success of the enterprise.
Definition of culture:
According to Edward burnett tylor: culture of civilization is that complex whole which
includes knowledge, belief, art, moral, law, custom, and other capabilities and habits acquired
by man as a member of society
Clyde kluckhohn has defined culture very simply as the total life-way of a people
Meaning of Entrepreneurial culture:Culture consists of tangible man-made objects, such as automobiles, clothing, furniture,
buildings, and tools and intangible concepts such as laws, morals, and knowledge. In
addition, culture includes the values, character, qualities, skills, acceptable within the
particular society.
Culture in a society is learned and is passed on from one generation to the next. Culture is
nurtured, fostered and promoted.
A culture is usually divided into sub-cultures based upon geography or such human
characteristics as age or ethnic background.
Sub-cultures of entrepreneurship:
Culture of business
Culture represents the manner in which members of a group regulate their behavior in
order to be in harmony with each other and with other groups in that society it manifests itself
in their pattern of behavior, forms or art and music, language, customs and practices and in
the beliefs that are shared.
Business and ethics:
Ethics is that branch of philosophy which is concerned with rightness or wrongness,
goodness or badness of human conduct. In the case of a business organization, the definition
of human would extent to all activities carried out by people in the course of business. Ethics
are something which need to be followed by all member of a business society, public
exposure to marketing activities is higher than any other business activity.
Productivity culture:
Productivity improvement is not just doing things better; more importantly, it is doing the
right things better. A key to productivity is the attitude of employees who work together.
Attitudes reflect the interplay of many long-term and short-term factors including motivation,
culture, management, systems, nature of work and personal value system.
Total quality culture:
TQC is the way of making an integration of all efforts in the organization between hard Ss
nd soft Ss in achieving total quality and customer care. The process of TQM helps in
improvement of quality of work life and employees satisfaction and customer satisfaction.
culture of an organisation is influenced by the culture of the country as well as the nature of
its business
Organisations culture:
Culture and share values: Webster says that culture is the integral pattern of human behavior
that includes thought, speech and action and depends on mans capacity for learning and
transmitting knowledge to succeeding generations. most elements of a culture take a long
time in their evolution and equally as long to change. An organization has a mission when its
culture fits with its strategy.
Ten steps to changes entrepreneurial culture
Changing entrepreneurial culture doesnt require magic. What it needs is down-to-earth
action that will set a good example at a top. The following ten steps will help an entrepreneur
to create a culture supportive of changes:
1. start at the top. Lead the enterprise.
2. Attune to a culture of innovation.
3. Remove the hidden obstacles.
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Target prefers to do business with multi-product, rather than single-product, firms. Finally,
the opportunity must fit the personal skills and goals of the entrepreneur. It is particularly
important that the entrepreneur be able to put forth the necessary time and effort required to
make the venture succeed.
An entrepreneur must believe in the opportunity so much that he or she will make the
necessary sacrifices to develop the opportunity and manage the resulting organization.
Opportunity analysis, or what is frequently called an opportunity assessment plan, is one
method for evaluating an opportunity.
The assessment of the opportunity requires answering the following questions:
What market need does it fill?
What personal observations have you experienced or recorded with regard to that
market need?
What social condition underlies this market need?
What market research data can be marshaled to describe this market need?
What patents might be available to fulfill this need?
What competition exists in this market? How would you describe the behavior of
this competition?
What does the international market look like?
What does the international competition look like?
Where is the money to be made in this activity?
Developing a Business Plan
A good business plan must be developed in order to exploit the defined opportunity. This is a
very time-consuming phase of the entrepreneurial process. An entrepreneur usually has not
prepared a business plan before and does not have the resources available to do a good job. A
good business plan is essential to developing the opportunity and determining the resources
required, obtaining those resources, and successfully managing the resulting venture.
Determine the Resources Required
The resources needed for addressing the opportunity must also be determined. This process
starts with an appraisal of the entrepreneurs present resources. Any resources that are critical
need to be differentiated from those that are just helpful. Care must be taken not to
underestimate the amount of variety of resources needed. The downside risks associated with
insufficient or inappropriate resources should also be assessed.
Acquiring the needed resources in a timely manner while giving up as little control as
possible is the next step in the entrepreneurial process. An entrepreneur should strive to
maintain as large an ownership position as possible, particularly in the start-up stage. As the
business develops, more funds will probably be needed to finance the growth of the venture,
requiring more ownership to be relinquished. Alternative suppliers of these resources, along
with their needs and desires, need to be identified. By understanding resource supplier needs,
the entrepreneur can structure a deal that enables the recourses to be acquired at the lowest
possible cost and the least loss of control.
Manage the Enterprise
After resources are acquired, the entrepreneur must use them to implement the business plan.
The operational problems of the growing enterprise must also be examined. This involves
implementing a management style and structure, as well as determining the key variables for
success. A control system must be established, so that any problem areas can be quickly
identified and resolved. Some entrepreneurs have difficulty managing and growing the
venture they created.
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