undefined | unit 1 introduction

ENP

Unit 1

Introduction

Q1) Define the concept of entrepreneurship and its characteristics.

A1) Entrepreneurship refers to the process of creating a new enterprise with an innovative idea and bearing any of its risks, with the view of making the profit. It is an act of seeking investment and production opportunity, developing and managing a business venture, so as to undertake production function, arranging inputs like land, labour, material and capital, introducing new techniques and products, identifying new sources for the enterprise.

Entrepreneurship is a process of actions of an entrepreneur who is a person always in search of something new and exploits such ideas into gainful opportunities by accepting the risk and uncertainty with the enterprise. Entrepreneurship involves three aspects-

Entrepreneur: The person who innovate the idea and take risk of promoting the business idea.

Entrepreneurship: It is the process of initiating the business idea or promoting the business venture. He undertakes all the risk attached with the new venture like risk of loss, risk of rejection in the market other related risks.

Enterprise: It is the business venture started by the entrepreneur to undertake business activities.

Some examples of entrepreneur are Bill Gates (Microsoft), Warren Buffet (Hathaway), Gordon Moore (Intel) Steve Jobs (Apple Computers), Jack Welch (GE) GD Birla, Jamshedji Tata (TATA), Dhirubhai Ambani (Reliance), Ritesh Agarwal (OYO) etc.

Some of the essential characteristics of entrepreneurship are-

The entrepreneur must have the ability to take risk during the process of promotion of new business idea into a nosiness venture.

The entrepreneur should be characterised by innovativeness because he has to innovate new & unique ideas to start its own business venture.

The entrepreneur should have the leadership quality to lead the project/venture initiated by him where the numbers of employees are working in the project/venture.

The entrepreneur should be open minded who is able to grab the opportunity in the market

An entrepreneur should be flexible enough to adopt changes according to the situations in the business environment.

Q2) State the process involved in entrepreneurship.

A2) The steps involved in entrepreneurship are depicted in the following figure -

Description: https://businessjargons.com/wp-content/uploads/2015/12/Entrepreneurial-process.jpg

Figure : Entrepreneurship Process

Discovery/idea generation: It involves discovery/idea generation where an entrepreneur seeks inputs from all the persons including employees, consumers, channel partners, technical people, etc. to reach to an optimum business opportunity.

Developing a Business Plan: In this step the entrepreneur develop a plan to execute the idea the transform it into reality. It sets goals and standards and prepares the derivative plans accordingly.

Resourcing: In this step, the entrepreneur identifies the sources from fund, human resources and other material relevant resources.

Managing the company: The manager must decide the management structure of the company to bring effective management in the company.

Harvesting: The final step in the entrepreneurial process is harvesting wherein, an entrepreneur decides on the future prospects of the business, i.e. its growth and development. Here, the actual growth is compared against the planned growth and then the decision regarding the stability or the expansion of business operations is undertaken accordingly, by an entrepreneur.

Q3) Discuss the elements of entrepreneurship.

A3) The key elements of entrepreneurship are depicted in the figure ,

Description: Entrepreneurship

Figure : Key elements of entrepreneurship

Innovation to exploit opportunity:

The entrepreneur innovate ideas to exploit opportunities available in the market. The idea may be for new product, service, technology, production technique, marketing strategy, etc.

2. Resourcing:

In this step, the entrepreneur identifies the sources from fund, human resources and other material relevant resources.

3. Risk-Taking:

Risk is inherent in entrepreneurship stagnate a business and excessive impulsive risk-taking can cause losses. But the willingness of an entrepreneur to take risks gives them a competitive edge in the economy.

4. Vision:

Vision or foresight helps entrepreneurs to set out short term and long term goals for their business and also plan ways to achieve these objectives.

5. Organization:

In entrepreneurship, an entrepreneur must be able to manage and organize his finances, his employees, his resources, etc. So his organizational abilities are one of the most important elements of entrepreneurship.

Q4) Discuss about the determinants of entrepreneurship.

A4) The determinants of entrepreneurship are-

Entrepreneurship promotion schemes of Govt:

Central Govt. initiated different schemes like start up India, Made in India, Skill India, Mudra loan etc. for the promotion of entrepreneurship from time to time. Such schemes encourages youths for entrepreneurship by utilizing their skills and available natural resources.

2. The Rise of Technology:

The advancement of information technology provides facility for worldwide communication and easy accessibility of information. The potential entrepreneurs can collect information about potential market, competition, availability of raw materials etc. It promotes virtual businesses in the areas like e-commerce shopping sites, e-education, development of application software etc. For example, Byju, unacademy, facebook, flipkart etc.

3. Female Entrepreneurs:

The entrepreneurial wave is also being driven by women entrepreneurs who are carving a niche for themselves. Start-ups like Zivame, Kaaryah, Your Story and POPxo have become successful ventures.

4. Availability of resources:

Availability of resources in a locality also encourages local enthusiastic people to utilize the same for starting business venture. Different types of village and home based industries like handloom, handicraft, food processing industry etc. provides livelihood to a significant number of families in rural and semi urban areas of the country.

6. Attitude of self-independency:

Some people always interest to become self-independent rather than serving any private or public company or Government. Such people start their own business with innovative ideas and become boss of their own.

6. Education:

Educational institutions also play a significant role in promotion of entrepreneurship by making them aware and skilled to start a business venture. In educational institutions knowledge is provided about the entrepreneurship process, its pros and cons in different undergraduate and post graduate courses like B.com, M.com, BBA, MBA etc.

7. Availability of information:

The easy accessibility of information helps the entrepreneurs to get information about market accessibility, competition in the market, sources of funds, raw materials, cheap labour and other material information.

8. Accessibility to credit:

Accessibility to finance/credit is important to implement the plan into business venture. Banks and financial institutions extends credit under different schemes of Government like MUDRA loan, start-up India, Credit Guarantee Fund Scheme for Micro and Small Enterprises etc.

Q5) What are the challenges faced by the entrepreneurs.

A5) 1. Raising Funds for the Business:

The challenge for any start-up lies in raising funds for the business. To do so, they need to have a dependable business plan and a strategy on how they want to enter the market. Start-ups get funds from venture capitalists once they have convinced them about the venture’s potential for success.

2. Knowledge on How to Run a Business:

Lack of skill and knowledge is a threat to entrepreneurship. Various business schools have started entrepreneurship courses to answer the requirements of interested students who seek to become an entrepreneur. These courses help the students get their expectations right and prepare themselves for a career in entrepreneurship.

3. Keeping Up with Technology:

This point is important for start-ups in the technology sector. It is important for them to keep track of the latest technology and stay ahead of the curve. These days, technological innovations are happening every day leading to technology getting obsolete quickly. They need to keep on improving their products and give new and innovative products to their customers. Innovations need to be useful for customers. They need to have good research backing their product launches. If the product does not answer any need gap in the market, then it will not be successful in the market even if there is cutting edge technology behind it.

4. Quality of Human Resources:

Any business’ success is dependent on the people who work for it. It is critical to have the right mix of people. These people should be trained for their job profiles. For example, a marketing manager should understand the industry and its customers and accordingly plan marketing campaigns. They should also have practical experience in performing their jobs properly. Additionally, they should have the right attitude and keen interest in doing their work to the best of their abilities.

5. Market competition:

The new entrepreneurs face competition in the market from existing service providers or producers. To compete and overcome with this competition the new business venture must provide quality service/product with reasonable price.

6. Market linkage:

At the initial stage the entrepreneurs face hurdles in getting market linkage for their products or service. Different fairs and exhibitions are organized by the government from time to time to provide market for the products of small scale industries.

Q6) Discuss the significance of entrepreneurship.

A6) Some of the significance of entrepreneurship is -

Create jobs: Entrepreneurship create jobs and provide livelihood in the economy by starting new business ventures. It employs people to work for the achievement of the goal.

Entrepreneurs innovate: Some of the greatest technologies in today’s society have come from businesses. The technological advances come out of a need to solve a problem, create efficiencies, or improve the world. In periods where there’s more advancement in technology, there’s usually an entrepreneur to thank for it.

Entrepreneurs create change: Entrepreneurs create better changes in the existing product or service with its innovative ideas. From black n white TV to LED TV, from keypad phone to smart phone, from traditional shopping to online shopping, from traditional banking to online banking etc. all these changes are due to innovative ideas of entrepreneurs.

Entrepreneurs contributes to society: Entrepreneurs contributes to the society by providing livelihood to the people, paying taxes, donating to charities and non-profits for various causes and creating solutions to help poorer communities for education, clean drinking water and good health care.

Entrepreneurs add to national income: Entrepreneurship generates new wealth in an economy. New ideas and improved products or services from entrepreneurs allow for the growth of new markets and new wealth. Their income is contributed to the GDP of the economy.

Alternate livelihood: In developing countries like India where there is lack of job as per demand due to excess population, the educated and skilled unemployed youths can start business ventures with innovative ideas. Thus it provides an alternative source of livelihood and also provides solution to the unemployment problem.

Preserve culture: The entrepreneurs based on handloom, handicraft, local food processing industries preserves the local culture and heritage of their locality and also able to establish in the national and international scale.

Utilisation of natural resources: The local entrepreneurs also utilises natural resources of the locality for commercial production.

Q7) Discuss the creative response of entrepreneurship to the society and economy.

A7) 1. Entrepreneurial thinking challenges tradition:

The most successful social entrepreneurs challenge themselves to be open-minded and approach problems with a filter that is void of established tendencies and stigmas. They are unconventional thinkers, not limited by the constraints of the systems in place, but instead challenge those systems with fresh ideas and techniques. Their ability to challenge commonly assumed principles or beliefs ushers in a completely new way of thinking. For example, Different e-learning education app like unacademy, Byju and other online communication platform like zoom, google meet etc. solves the problem of access to education to a great extent during the covid 19 pandemic period.

2. Entrepreneurial thinking combines creativity with market intelligence:

Entrepreneurial thinking naturally embodies creativity, a boundless imagination as to what is possible. But the most successful entrepreneurial endeavours balance creative solutions with comprehensive market intelligence. Knowledge of the problem and contributing factors empowers entrepreneurs to blend dissimilar concepts from different contexts and craft a new, differentiated or completely unique strategy.

3. Entrepreneurial thinking practices humility:

Humility is a core component of entrepreneurial thinking. It drives even the boldest leaders to challenge their own established tendencies and recognize their potential for continual improvement. Successful entrepreneurs strive for perfection, obsess over learning and iteration and recognize that they can always do better.

4. Entrepreneurial thinking embraces risk and failure:

The social sector has never taken failure lightly – funding protocols, public perception and the significance of the problems being addressed have contributed to a risk-adverse environment. But ideas that drive dramatic change are inherently risky propositions and they present the potential to fail. Entrepreneurial thinking acknowledges that uncertainty and accepts it as a necessary driver of progress.

5. Increased accountability and measurability:

Social entrepreneurs are accountable to their clients, employees, volunteers, investors and donors. Organizations measure social value using both quantitative metrics and qualitative data. Methods such as the social return on investment demonstrate the social value that is created for every dollar invested or donated to the organization. Thus, a back-to-work organization can measure money saved in welfare or Medicaid costs for each person who receives full-time employment, or a group that works with at-risk youth can measure the number of people who likely would have dropped out of high school but graduated because of the program, and the average difference in income made by high school graduates versus high school dropouts.

6. Sustainability:

Organizations often use a triple bottom line that measures the impact of the organization on people, the planet and profit. Even non-profit organizations benefit from financial sustainability, as they can fund new programs with profits from the venture and spend less time and resources on fundraising activities.

Q 8. Discuss about different types of entrepreneurship.

Q9. Discuss about different dimensions of entrepreneurship.

Q10. Write a note on intrapreneurship, netpreneurship, ecopreneurship, social entrepreneurship.

A) to Q8, 9, & 10

Intrapreneurship: The term intrapreneurship refers to a system that allows an employee to act like an entrepreneur within a company or other organization. Intrapreneurs are self-motivated, proactive, and action-oriented people who take the initiative to pursue an innovative product or service. An intrapreneurship creates an entrepreneurial environment by allowing employees to use their entrepreneurial skills for the benefit of both the company and the employee. For example, Ramzi Haidamus, the president of Nokia Technologies, is often considered an intrapreneur because of his initiatives with the company. It has the following characteristics-

Intrapreneurs are able to resolve specific issues such as increasing productivity or cutting costs.

It requires a high level of skill—namely leadership skills and thinking outside the box—directly applicable to the assignment.

An intrapreneur also takes risks and drives innovation within a business to better serve the market through increased goods and services.

They are able to interpret trends in the marketplace and visualize how the company needs to evolve to stay ahead of its competition.

a) Technopreneurship:

Technopreneurship allows the entrepreneurs to innvate and implement idea by using technology. The process of technopreneurship is a combination of technological advancements and entrepreneurial skills. A person who is engaged in technopreneurship creates a product or solution that uses technological solutions to change the way of doing something in an orthodox way. It improves how we have done something before and how it has to be done in the coming future. Some examples of successful technopreneurs are Bill Gates (Microsoft), Sergey Brin and Larry Page (Google), Jack Dorsey (Twitter), Steve Jobs (Apple), Kevin Systrom (Instagram), and so on.

b) Cultural entrepreneurship

Cultural entrepreneurship is an emerging discipline that examines how cultural products (such as art, theater, and literature) and cultural activities (like sports, music, food, and film events) have an impact on the growth of local, national, and global economies. Cultural Entrepreneurs are cultural change agents and resourceful visionaries who organize cultural, financial, social and human capital, to generate revenue from a cultural activity. Their innovative solutions result in economically sustainable cultural enterprises that enhance livelihoods and create cultural value and wealth for both creative producers and consumers of cultural services and products.”

c) International entrepreneurship

International entrepreneurship is the process of entrepreneurship that engaged in doing business with cross border countries like import-export, international service like banking, insurance, telecommunication etc.

d) Netpreneurship

It refers to the process of entrepreneurship that start business venture with new ideas by using internet. For example, youtuber, unacademy etc.

e) Ecopreneurship

Ecopreneurship is a term coined to represent the process of principles of entrepreneurship being applied to create businesses that solve environmental problems or operate sustainably. Such entrepreneurs generally started business venture to sustain ecology and environment. For example, establishment of resort, eco camp, eco part, local artisans producing furniture from bamboo, cane, decorative items from clay, stone etc.

f) Social entrepreneurship

Social entrepreneurship uses business to offer new ideas for wide-scale social and environmental impact. Social entrepreneurship unites the passion of a social mission with an image of business-like discipline, innovation, and determination. Many social entrepreneurs launch whole new ventures applying innovative and often risk-taking approaches to create scalable solutions, which includes inventing new products and services. Others join existing social enterprises aligned with their interests and passions. For example, AMUL (Anand Milk Union Limited) Social Entrepreneur: Dr. Verghese Kurien Grameen Bank Social Entrepreneur: Muhammad Yunus.

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