omtexclasses.com: Entrepreneurship Development

Entrepreneurship Development

8.1 Introduction

8.2 Concept and' Definition

8.3 Functions and Need of Entrepreneur

8.4 Characteristics of Entrepreneur

8.5 Characteristics of Entrepreneurship

8.6 Competencies of Entrepreneurship 8.7 Process of Entropreneurship Development

8.8 Entrepreneurship Values

8.9 Summary

8.10 Exercise

Rohit and his friends had-just completed their matriculation exams and were parrying at Rohit's house. While taking with his friends Rohit asked Shyam, 'What do you want to be? A Doctor or an Engineer? Shyam answered 'I will be an Engineer'. What about you, Neha?' Rohit questioned. Neha said, 'no doubt I will be a Doctor'. Suddenly everybody questioned Rohit, 'but what about you, Rohit'. He said, 'I am confused, I want to be different, I want to be my own boss, I wish to serve the society and take our country at different heights. I imagined something different but have no idea how to go forward with it. Rohit's mother was excited to listen to her son's talk. Later in .the evening Rohit`s mother discussed the same with his father. He called Rohit and said since you have great ideas you should be an Entrepreneur. Rohit was surprised and was unable to understand who is an Entrepreneur. His father explained him the details,

8.1 INTRODUCTION

Entrepreneurs play a very important role in the development of any country. They are the backbone of a nation's economic progress. Entrepreneurs are innovators but in their role they act as the owners, producers, coordinators, market creators, decision takers and risk-takers. They organize land, labour and capital to provide much needed goods and services to the society and therefore are referred to as fourth `factor of production'. They endeavor to increase productivity and the quality of output by application of modernized techniques. They generate employment opportunities to large sections of the society and try to increase their standard of living.

Several factors were responsible for the slow growth of entrepreneurship in pre-independent India. At the time of independence, the industrial base of our economy was very poor and the industries were flooded with many problems like shortage of raw materials, deficiency of capital, competition, marketing problems, etc. After independence the governments had realized the need for rapid industrialization in the country. It started the process of clear cut industrial policies and established many entrepreneurship development institutions and advisory bodies.

8.2 CONCEPT AND DEFINITION

Since the days of Industrial revolution, enterprise and entrepreneurs are the focus of modernization.

Different professionals have studied the concept of entrepreneurship according to their disciplines. Hence there has been more variations about the concept than centralization of the meaning of entrepreneurship.

The concept of entrepreneur varies from industry to industry, country to country as well as time to time and the level of economic development. The word `entrepreneur' is derived from the French word `entreprende'. It means `to undertake'. The meaning of the term entrepreneur has changed considerably.

In early 16th century the Frenchmen who led military expedition were known as 'entrepreneurs'. In 17th century, architects and contractors of public works were referred as 'entrepreneurs'. In the 18th century the entrepreneur was introduced into business to symbolize /denote the individual providing the fourth `factor of production' i.e. enterprise. In this way the evolution of the concept of entrepreneur is considered, over more than four centuries.

The oxford English dictionary defines an entrepreneur as the director or a manager who is successful in setting a business. He is the one who provides the fourth factor of production, 'enterprise'. Thus today an entrepreneur is the combination of various factors. Jamsetji Tata, Jamnalal Bajaj, Laxmanrao Kirloskar, Ghanshyamdas Birla are some of the entrepreneurs in their truest sense.

Definition of Entrepreneur :

In 18th century, Richard Cantilon an Irishman, living in France firstly used the term entrepreneur.

1. Cantilon : "An entrepreneur is a person who buys factor services at certain prices with a view to selling its product at uncertain prices."

2. Joseph A. Schumpeter : "The process of development is a deliberate and continuous phenomenon which is actively promoted by the escort services of a change agent who provides economic leadership. This change agent is called an entrepreneur."

3. The new Encyclopedia Britannica : "An individual who bears the risk of operating a business in the face of uncertainty about the future conditions." Hence an entrepreneur is one who innovates, single decision maker, key planner, raises money, assembles resources, chooses managers and sets the organization.

Definition of Entrepreneurship :

The term 'entrepreaieurship' is often used synonymously with 'entrepreneur'. Though they are the two sides of the same coin, conceptually they are different. The entrepreneur is essentially a business leader ago entrepreneurship is the function performed by him.

1. B. Higgins : "Entrepreneurship means the function of seeking investment and production opportunity, organising an enterprise to undertake a new production process, raising capital, hiring labour, arranging the supply of raw materials, finding site, introducing, new technique and commodities, discovering new sources of raw materials and selecting top managers of day to day operations of the enterprise."

2. A.H. Cole : "Entrepreneurship is the purposeful activity of an individual or a group of associated individuals, undertaken to initiate, maintain or aggrandize profit by production or distribution of economic goods and services."

3. B.C. Tandon : "Entrepreneurship is the ability to create something new, organizing and coordinating and undertaking risk and handling economic uncertainty.' The above definition describes entrepreneurship as the function of creating something new for an economic activity by undertaking risk, organizing and coordinating resources. In other words entrepreneur is someone who is specialized in taking judgmental decision about coordination of scarce resources.

Definition off Enterprise :

1. Enterprise can be defined as an undertaking or adventure involving uncertainty and risk and requiring innovation.

2. Enterprise is defined as a framework within which decisions concerning what to produce, how much to produce, when to produce and how to produce are taken into concern by the entrepreneur.

Thus enterprise is an undertaking or organization involving some economic activity. It is a continuing entity. Just for a social organization, family is the basic unit, enterprise is for economic organization.

8.3 FUNCTIONS AND NEED OF ENTEREPRENEUR

The functions of an entrepreneur are many as they are the sole arranger of an entire organization. They can be explained as follows:

1. Determination of objectives : An entrepreneur has to determine the aims and objectives of the enterprise. He should change them as per required conditions or prefer those which are advantages to the enterprise.

2. Innovation : An entrepreneur is basically an innovator who introduces new combinations of means of production. He introduces something new in any branch of economic activity. Innovation implies doing new things or doing those things that one already is being done in a new way. Innovation also involves problem solving and the entrepreneur gets satisfaction from using his capabilities in attacking problems.

3. Good relations : The development of an enterprise greatly depends on the efficient relations of the, superiors, subordinates and all employees. Coordination among the employees of the enterprise will have great effect on the success of an enterprise.

4. Organizing funds : To keep the enterprise run successful the need of adequate financial resources, has to be looked after by the entrepreneurs. A good relation with the existing and potential investors has to be looked after.

5. Acquiring new technology : The requisition of new efficient technological equipment and the timely revision of it as new machinery appears.

6. Development of market : The entrepreneurs from time to time try different acts to develop the market for its products. It should also develop the new product in the market or look forward to consumer's demand.

7. Risk bearer : Future is uncertain and unknown. The entrepreneur has to take risk in any circumstances. If the enterprise succeeds, the entrepreneur gets profits, if it does not, losses occur. Risk is of two types, insurable or non-insurable. Non-insurable risk can be reduced by the entrepreneur by using his skills and good judgment of the PREVAILING environment.

8. Taking decisions : When an entrepreneur is convinced with his idea of a new production, he decides to enter the market with all his motivation and ability. He has to take wise decisions to formulate a proper action plan.

Economist Kilby Peter has enumerated 13 functions of an entrepreneur. He is of the opinion that an entrepreneur has to perform the following kinds of activities for the successful operations of the enterprise.

1. Perception of market opportunities.

2. Gaining command over scare resources.

3. Purchasing inputs.

4. Marketing of products and responding to the competition.

5. Dealing with the public bureaucracy.

6. Managing human resources of the firm.

7. Management of customer and supplier relations.

8. Financial management.

9. Managing production.

10. Acquiring and overseeing - assembly of factory.

11. Industrial engineering.

12. Upgrading process and product quality.

13. Introduction of new production techniques and products.

8.4 CHARACTERISTICS OF ENTREPRENEUR

There are certain characteristics of entrepreneurs : Some entrepreneurs may have some special characteristics according to their capabilities. Here, we are studying the common characteristics :

1. High goals : The entrepreneurs have very positive desires to achieve high goals. Such high self motivation keeps them strong and confident to face various obstacles and misfortunes. Hence they are successful in setting a prosperous organisation.

2. Future foresight : The entrepreneurs have good foresight to know about the future market.. development and the external business environment. He can take proper decisions according to the market situations and market changes. This also helps them to take timely actions.

3. Mental abilities : Mental ability consists of intelligence and creative thinking. To be an entrepreneur a person must be intelligent and have the ability of creative thinking. This ability will help him to take proper decision.

4. Technical knowledge : An entrepreneur should have sufficient technical knowledge about the products and his plan to produce. Timely change of technology should always be updated to be in pace with the market.

5. Hard work : A successful entrepreneur will always be ready to work hard. Hard work will always distinguish a successful entrepreneur from an unsuccessful one. At the start of any venture, the entrepreneur has to work tediously, for long hours and independently handle the main areas.

6. Highly optimistic : An entrepreneur always thinks positive in all the activities. He is always optimistic with the market situations even in failure times. Such positive attitude helps the enterprise to run successfully.

7. Communication skills : This refers to communicate effectively. It is very important that the sender and receiver of the message are being understood perfectly. An entrepreneur has to communicate to various parties i.e. customers, suppliers, creditors, employees, etc.

8. Creativity : Creativity is the ability to bring something new into existence. Innovation is the process of doing new things, and creativity is a prerequisite to innovation. An entrepreneur should be creative; because ideas usually evolve through creative process whereby imaginative people bring them into existence, grow them and develop them positively.

8.5 CHARACTERISTICS OF ENTREPRENEURSHIP

Entrepreneurship is a process of setting up a new business organisation. It is the process where one decides to build a business career by finding the market options and mobilizing the available resources. The following are the characteristics of entrepreneurship.

1. Economic activity : An entrepreneur produces a new product for the consumers as per their needs. He feels the need of this to satisfy human wants and as well in exchange earn a better livelihood. It is a systematic plan activity as per the skills and knowledge of an entrepreneur. Hence entrepreneurship is an economic activity.

2. Innovation : Entrepreneurship is an innovation. The introduction of new combination of various factors of production is innovation. Anew product arrives in the market, uses new production technology, discovers new source of supply of raw materials and opens a new market for the specific product. In view of changing taste of consumers from time to time, entrepreneurship is of research and development to produce goods to satisfy the customers.

3. Creative activity : Innovation should have a strong support of creativity. Introducing creativity in producing some new is a big challenge for the entrepreneur. Thus, creativity is an essential part of entrepreneurship.

4. Organisation building : It is an activity where various factors of production have to be organized. Different factors like place utility, time utility, form utility, etc. has to be considered to collect them under one roof for new production.

5. Managerial skill and leadership : A person who wants to be a successful entrepreneur should have more passion of doing something new than just earn profit. Leadership and managerial skills are the most important facets of entrepreneurship. Other skills can be considered secondary. An entrepreneur must have the ability to lead and manage.

6. Risk bearing : Uncertainty is defined as a risk which cannot be insured against and is incalculable. Entrepreneur is an agent who buys factors of production at certain prices, in order to combine them into a product, to sell them at uncertain prices in future. Thus they too are risk-bearing agents of production.

7. Gap filling function : The most significant feature of entrepreneurship is gap filling. It is the entrepreneur's job to fill the gap or make up the deficiencies which always exist in the knowledge about the production function.

8. Skillful management : The success of any entrepreneurship depends on the management of the organization. With professional management and skilled managers, entrepreneurship becomes a successful activity.

8.6 COMPETENCIES OF ENTREPRENEURSHIP

In simple terms, a competence is an underlying characteristic of a person which led to his or her effective or superior performance in a job. The term `competence' refers to a combination of knowledge, skills, motive, attitude and habits. Every role or function requires some particular competencies.

An entrepreneur has to have certain competencies or abilities to have superior results. he.may possess certain competencies which can be developed through training, guidance and experience. Following is a list of major competencies identified by the study that lead to superior performance of the entrepreneurs.

1. Initiative : An entrepreneur is a person who takes the initiative or starts something first to set up an enterprise. Initiative is an inner urge of a person to do something. People who are innovators usually have the quality of taking initiative. Entrepreneurs take the initiative to carry out new combinations and innovates something new in the process of economic development.

2. Sound knowledge : An entrepreneur always wants to receive new information which can help him update his knowledge and help him in realizing his goals. He also refers to different markets, takes experts advices and does researches to gain complete knowledge to bring his ideas into reality.

3. Proper planner: An entrepreneur believes in following a perfect plan to execute his ideas. He develops the future courses of action keeping in mind the goals to be achieved. They believe in realistic planning and ensure proper execution of the same. This helps them in achieving success.

4. Efficiency : An entrepreneur always has high efficiency in whatever act he does. He believes ,in hard work to attain efficiency. They are ready to try and involve new methods to make the working pattern easier, simpler, better and economical.

5. Opportunity seeker : The entrepreneurs regularly keep studying the market and business environment. They observe and wait for the best opportunity for their enterprise or organisation in the market. They grab the best opportunities available for their organization.

6. Self-Confidence: The successful entrepreneurs have complete confidence over their knowledge, skills, abilities, strengths and competencies. They show great persistence in difficult situation and future uncertainties.

7. Positive attitude : An entrepreneur always thinks positive even in failure times. He is, never disheartened by failures. He believes in 'Try and try till you succeed' formula. He takes any failures as a new experience and lesson. He believes in his abilities and ensures that others fall in the line with his thinking to promote the interest of the organization.

8. Persuasive : An entrepreneur is in a position to convince his superior and subordinates to get the work done according to his ideas by sound arguments and logical reasoning. He uses his intelligences to convince others the way he wants them to do things for him.

9. Quality consciousness : Entrepreneurs who wish to, succeed believe in quality performances. They do not compromise with moderate or average performance. As they want to be the best, they, set high quality standards for themselves. They put in all efforts to achieve excellence for their organization.

10. Problem solver : Any problem is taken up as a new challenge and best strategy is found out to solve the problems. The entrepreneur puts in the best for finding out the most appropriate solution for the same. He must have an intense desire to complete a task or solve a problem.

11. Supervising/Monitoring : Top entrepreneurs ensure that every step is carried out in their organization as per their wishes or ideas. Hence they ensure regular monitoring of the production so that the goals of the organization are achieved in the best possible manner. Supervising will also help in rectifying mistakes on the spot instead of redoing the whole thing again.

12. Committed to work : Successful entrepreneur are ready to make all sacrifices needed for honouring the commitments they have towards the enterprise. Their every commitment is a moral binding, irrespective of the costs involved.

8.7 PROCESS OF ENTREPRENEURSHIP DEVELOPMENT

An entrepreneur is one of the most important inputs in the economic development of a country or of regions within the country. Development of the entrepreneurship has become a movement in India. Entrepreneurship does not appear suddenly. It is a self-motivated (dynamic) process of interaction of a person and the environment.

In a broad sense, development of entrepreneurship refers to all those activities undertaken to encourage a prospective entrepreneur to set up an industrial unit. In a narrower sense, it refers to the process of bringing out the `entrepreneur' as an individual.

Entrepreneurship development (ED) refers to the process of enhancing entrepreneurial skills and knowledge through structured training and institution-building programmes. ED aims to enlarge the base of entrepreneurs in order to hasten the pace at which new ventures are created. This accelerates employment generation and economic development. Entrepreneurship development focuses on the individual who wishes to start or expand a business. Small and medium enterprise development, on the other hand, focuses on developing the enterprise, whether or not it employs or is led by individuals who can be considered entrepreneurial. Furthermore entrepreneurship development concentrates more on growth potential and innovation.

PROCESS OF ENTREPRENEURIAL DEVELOPMENTS

1. Training

2. Entrepreneurial development programme (EDP)

3. Specialised entrepreneurship development agencies

1. TRAINING

The traditional school of thought had been thinking that `entrepreneurs are born and not made' where as the modern observation mentions that some entrepreneurs may be born but a large of them can be made by education and training. Hence today there is a need of training to produce eligible future entrepreneurs.

Training is a scheme of instructions :which is planned, systematic, consistent, pervasive and monitored to measure its effectiveness. It is an integral input of managerial development.

Training broadens the vision of entrepreneurs by providing them suitable opportunities for an interchange of experience within and outside an industry. It builds necessary skills of new entrepreneurs. It imparts knowledge of marketing of goods production methods, consumers education, etc. Training exposes an entrepreneur to the latest development which can directly or indirectly affects him.

With the help of training there can be minimization of excessive scraps, defective outputs and wastages in the production process. Training helps in improving overall efficiency of an entrepreneur. The process of training helps an entrepreneur to accept new technology, team spirit, standardization, reduces fatigue, minimizes industrial accidents, etc.

Some methods of training are lecture method, demonstration method, individual instructions, group instructions, meetings, conferences, seminars, etc.

2. ENTREPRENEURSHIP DEVELOPMENT PROGRAMMES (EDPs)

An entrepreneurship development programme has been defined as "a programme designed to help a person in strengthening his entrepreneurial motive and in acquiring skills and capabilities necessary for playing his entrepreneurial role efficiently."

EDPs is a device through which people with latent entrepreneurial traits are identified, motivated to take up new industrial venture, training in managing the unit and guided in all aspects of starting a venture/an enterprise.

EDP was first introduced in Gujarat in 1970 and was sponsored by the Gujarat Industrial Investment Corporation. The EDPs are based on McClellands experiments in Kakinada district of Andhra Pradesh where businessmen were provided with motivation training. Later on they improved their performance.

Objectives of EDPs

The following objectives are identified of EDPs:

1. To foster entrepreneurial growth in the country.

2. Optimum use of available resources.

3. Development of backward regions and improving economic status of socially disadvantaged groups.

4. Generation of employment opportunities.

5. Widening base for small and medium scale industries.

NOTE

E.D.P : is also used as an abbreviation of Electronic Data Processing. Students and teacher s are requested not to consider this concept while teaching and learning.

3. Specialised Entrepreneurship Development Agencies :

For the development of entrepreneur a number of specialized agencies have been set up by the state and central governments which are as follows:

1. Small Industries Service Institutes (SISI).

2. Small Industries Development Organisations (SIDO).

3. National Small Industries Corporation.

4. Small Industries Extension Training Institute.

5. Entrepreneurship Development Institute of India.

6. Institute for Rural Management and Administration.

7. National Institute for Entrepreneurship and Small Business Development (NIESBUD):

8. National Alliance of young entrepreneurs (NAYA).

9. Maharashtra Centre for Entrepreneurship Development (MCED).

10. Xavier Institute of Social Service, Ranchi.

11. Technical Consultancy Organisation.

8.8 ENTREPRENEURSHIP VALUES:

Attitudes and Motivation-Meaning and Concept of Entrepreneurship Values

Values are "enduring beliefs that a specific mode of conduct or end state of existence is personally or socially preferable to an opposite or converse mode of conduct or end state of existence". They are center to our functioning and are said to be the most significant' creation in social sciences.

Values act as chief motivations for basic psychological needs through representing beginning of desirable influences on the way that individuals select behaviour and evaluate their worlds. Individuals use their values to help rationalize and guide their beliefs, attitudes, and behaviours. Values are considered to be shaped largely by pre-audit socialisation and have been viewed as situationally invariant, however, values can and do change with time and events.

Various studies support the hierarchical power of values over attitudes and behaviours. As such, they provide a stable and inner-oriented understanding of individuals - more so than attitudes. Whereas attitudes are open to change across time and situations, values are stable and occupy a central position within a person's cognitive system. Once a value is learned, it becomes part of a value system in which each value is ordered in priority to other values. Value systems provide a completed understanding of the motivational forces driving an individual's beliefs, attitudes and behaviours.

A List of Values (LOV) is prepared by some researchers. If consists of nine values, a sense of belonging, excitement, fun and enjoyment in life, warm relationships with others, self-fulfillment, being well-respected, a sense of accomplishment, security, and self-respect.

V arious studies have demonstrated that these nine values can be reduced to three dimensions. It includes external values (sense of belonging, warm relationships with others, being well-respected, security), internal values (self-fulfillment, sense of accomplishment, self-respect); and fun and excitement values (excitement, fun and enjoyment in life).

To understand the value system of entrepreneurs; one should consider what entrepreneurs do. Recognizing opportunities is one of the most important abilities for successful entrepreneurs. In addition, they demonstrate an entrepreneurial self-efficiency that is associated with entrepreneurial confidence and a belief in oneself. As such, it can be expected that Entrepreneurs specially budding entrepreneurs will demonstrate high levels of internal values since internal values are associated with confidence in oneself and what one has achieved. Non-entrepreneurs, on the other hand, will come from a variety of backgrounds and experiences and will have a variety of motivations. As such, they are likely to demonstrate the full range of internal values levels depending on the environmental influences, they were exposed to in their formative values years as well as that which is inherited from prior family generations. Thus, overall, as a group, entrepreneurs and growing entrepreneurs will tend to demonstrate higher levels of internal values than non-entrepreneurs.

Entrepreneurs are good at networking and cultivating relationships with others. They appreciate that they do not necessarily need to know all the answers but they do need to know who to contact if they need someone with the answer to a problem they are experiencing. As such, it can be expected that entrepreneurs will demonstrate high levels of external values since these are associated with being able to relate with others. Non-entrepreneurs, on the other hand; will demonstrate the full range of personal values from low to high depending on their formative year experiences, etc.

When it comes to fun and excitement values, however, it can be expected that necessity-based growing entrepreneurs will be serious about setting up their businesses. It will not be about fun and excitement, the entrepreneurial process will be about "putting food on the table" and being able to have a life without poverty. Thus, it can be expected that the fun and excitement values of necessity based budding entrepreneurs will be low. Non-entrepreneurs, however, as a group, will demonstrate the entire range (from low to high) of fun and excitement values depending on their formative year experiences, etc.

ENTREPRENEURIAL ATTITUDE

Attitude is the tendency to respond in a generally favourable or unfavourable manner with respect to the object of the attitude. Entrepreneurial attitude is measured in terms of the individual's attitude toward opportunity recognition. Since the discovery of opportunities is important to the entrepreneurial process, entrepreneurs and new entrepreneurs will be inclined towards recognizing and developing opportunities. Necessity-based new entrepreneurs will demonstrate higher levels of entrepreneurial attitude (opportunity recognition) than non-entrepreneurs.

Some Attitude traits that enables for achieving entrepreneurial success:

1. Have passion for your business: Work should be fun. Your passion will help you overcome difficult moments and persuade people to work for you and want to do business with you.

2. Set an example trustworthiness: People have confidence in trustworthy individuals and want to work for them in a culture of integrity. The same is true for customers.

3. Be flexible, except with core values: It's given that your plans and strategies will change as time , goes on. However, no matter the pressure for immediate profits, do not compromise on core values.

4. Don't let fear of failure hold you back: Failure is an opportunity to learn. All things being equal, venture capitalists would rather invest money in an individual who tried and failed founding a company than in someone who never tried.

5. Make decisions in time: It's okay to use your intuition. Planning and thought are good. But procrastination leads to miss opportunity.

6. The major company asset is you: Take care of yourself. Your health is more valuable than the most expensive machinery or computer software for the company. Maintain your health for balance and energy, which will, in turn, enhance your mental outlook.

7. Keep your ego under control : The end result of ego is declinment in the progress. So an entrepreneur issued emphasizes to keep the ego under his control. He plays a role as motivator only.

8. Believe: You need to believe in yourself, in your company, and that you will be successful. This confidence is contagious with your employees, customers, stakeholders, suppliers and everyone you deal with.

9. Encourage and accept criticism graciously. Admit your mistakes: You need to constantly work on convincing your employees that it's okay even necessary to state their honest opinions even it if conflicts with the boss's opinion.

10. Maintain a strong work ethic: Your employees will follow your lead. It will also help you beat your competition by outworking them, particularly when your product or service is very similar.

11. Rebound quickly from setbacks: There surely will be plenty of ups and downs as you build the business. Learn from the setbacks and move on. You can't change the past.

12. Periodically get out of your comfort zone to pursue something important: Many times you will feel uncomfortable in implementing a needed change in technology, people; mission, competing, etc. For the company and you to grow personally, you sometimes have to step out of your comfort zone.

Many organizational and leadership shortcomings can be overcome or mitigated with the good attitudes described above. All can be learned except passion, which comes from within. Take time out of your hectic schedule to periodically reflect on these attributes. You may be inspired to act.

ENTREPRENEURIAL MOTIVATION

The term `motivation' has been taken from the word `motive'. Motive may be defined as an inner state of our mind that moves or activates or energises and directs our behavior towards our goals. Motives are expressions of a person's goals or needs. In simple terms, motives or needs are ways of behavior. They give direction to human behaviour to achieve goals or fulfill needs.

Thus, motivation can now be defined as the process that motivates a person into action and , induces him to continue the course of action for the achievement of goals: It is an ongoing process because human needs or goals are never completely satisfied.

Definitions

1. Dalton E. McFarland : "Motivation refers to the way in which urges, drives, desires, aspirations, striving or needs direct control or explain the behaviour of human beings."

2. Flippo : "Motivation is the process of attempting to influence others to do your will through the possibility of gain or reward."

Motivation involves stimulating a person to act in a particular manner. Entrepreneurship is to a great extent the product of motivation. Motivation can be positive or negative. Positive motivation occurs when a person is inspired to act for earning some rewards and benefits. Negative motivation arises from fear of failure or frustration. An entrepreneur who sets up an enterprise to gain prestige and power is positively motivated.

Factors motivating the entrepreneurs can be classified into Internal and External factors:

Internal factors are as follows :

a. Strong desire to do something.

b. Educational background and technical knowledge

c. Business experience in same or related line.

External factors are as follows:

a. Financial assistance from government and other institutions.

b. Demand for the product.

c. Availability of raw material, labour and machinery.

d. Encouragement from big business houses.

e. Profit margin,

SOME PROMISING ENTREPRENEURS OF INDIA

1. Late J.R.D. Tata 2. N.R. Narayana Murthy 3. Late. Dhirubhai Hirachand Ambani 4. Azim Fremji 5. Rajkumar Chordia (Pravin Masale) 6. Chitle Udhyog Samuh

7. Laxmanrao Kirloskar 8. Rahul Bajaj 9. Shri Dandekar 10. Shri Shirke 11. D.S. Kulkarni 12, Ashok Katariya 13. Jain Udhyog Samuh 14. Lijjat Papad.

8.9 SUMMARY

Entrepreneurs act as the owners, producers, coordinators, market creators, decision takers, risktakers and innovators. They organize land, labour and capital to provide much needed goods and services to the society and therefore are referred to as fourth `factor of production'.

The word `entrepreneur' is derived from the French word `entreprende'. It means `to undertake'.

The meaning of the term entrepreneur has changed considerably.

Definition of Entrepreneur: Joseph A. Schumpeter: "The process of development is a deliberate and continuous phenomenon which is actively promoted by the escort services of a change agent who provides economic leadership. This change agent is called an entrepreneur."

Definition of Entrepreneurship: The term `entrepreneurship' is often used synonymously with `entrepreneur. The entrepreneur is essentially a business leader an entrepreneurship is the function performed by him.

B. Higgires : "Entrepreneurship means the function of seeking investment and production opportunity, organising an enterprise to undertake a new production process, raising capital, hiring labour, arranging the supply of raw materials, finding site, introducing a new technique and commodities, discovering new sources of raw materials and selecting top managers of day to day operations of the enterprise:"

Definition of Enterprise: "Enterprise can be defined as an undertaking or adventure involving uncertainty and risk and requiring innovation."

Functions and need of Entrepreneur:

The functions of an entrepreneur are many as they are the sole arranger of an entire organization. They can be explained as follows:

1. Determine aims and objectives

2. Introduction of new production factors

3. Development of relation.

4. To look after adequate resources.

5. Providing new technological equipment

6. To develop market for product.

7. To take risk.

8. To take proper decision.

· Characteristics of Entrepreneur: To decide business goals

· Characterisics of entrepreneurship: To introduce innovation

· Competencies of entrepreneurship: To apply competencies

· Process of entrepreneurship development: To develop entrepreneurship

· Process of entrepreneurial developments

1. Training :

2. Entrepreneurial development programme (EDP)

3. Specialisation :

· Entrepreneurship values:

· Values : Values are "enduring beliefs that a specific mode of conduct or end state of existence is personally or socially preferable to an opposite or converse mode of conduct or end state of existence."

· Entrepreneurial Attitude : Attitude is the tendency to respond in a generally favorable or unfavorable manner with respect to the object of the attitude. Entrepreneurial attitude is measured in terms of the individual's attitude toward opportunity recognition.

· Motivation : Motive may be defined as an inner state of our mind that moves or activates or energises and directs our behavior towards our goals. Thus, motivation can now be defined as the process that motivates a person into action and induces him to continue the course of action for the achievement of goals. It is an ongoing process because human needs or goals are never completely satisfied. The basic element of the process of motivation is motive, behavior and goal.

Entrepreneur and a Manager

Points	Entrepreneur	Manager
1. Motive	The main motive of an entrepreneur is to start a venture by setting a enterprise to achieve his ideas.	The main motive of a manager is to give his services to an enterprise owned by someone else.
2. Status	An entrepreneur is the owner of the enterprise	A manager is a servant or paid employee of an enterprise
3. Risk-bearing	Being the owner, the entrepreneur undertakes all the risk and uncertainties of the enterprise.	A manager being an employee does not undertake any risk involved in the enterprise.
4. Qualifications	An entrepreneur requires qualities and qualifications like hard working, patience, foresight, high thinking, independence, etc.	A manager need to possess educational and technical skills. Special management knowledge and qualification is an additional benefit.
5. Innovations	Entrepreneurs are born innovators They set their own goals and work for it.	Managers only execute the plans prepared by the entrepreneurs. They only do the practical part of the plan.
6. Benefits	An entrepreneur gets profits as the benefits of the enterprise which is uncertain.	A manager usually gets fixed salary for the services rendered by him. It is fixed.
7. Decision making	An entrepreneur takes decision on his own as the enterprises has to develop as per his ideas.	A manager does not have authority to take decision on behalf of the enterprise, but he may take decision related to the plan which he is executing.
8. Specialization	An entrepreneur may not be a specialized in his trade but may have sufficient knowledge.	An manager is trained professional, hence is specialized in his field.

8.10 EXERCISE

Q.1 (A) Select the proper options given from the options given below and rewrite the completed sentences:

1. The word `entrepreneur' is derived from the ................... word `entreprende'

a) Japanese b) English c) French

2. `Entreprende' means to ..........................

a) undertake b) enterprise c) businessman

3. The oxford English dictionary defines an entrepreneur as the ...................... of a business.

a) secretary b) employee c) director

4. The term entrepreneur was first used by .................

a) J. Schumpeter b) R. Cantilon c) A.H. Cole

5. 13 functions of an entrepreneur were enumerated by .....................

a) J. Scumpeter b) R. Cantilon c) Kilby Peter

6. The inner urge of a person to do something is..................

a) initiative b) hard work c) creativity

7. Entrepreneurial ........................ is measured in terms of the individual's attitude toward opportunity recognition.

a) value b) attitude c) motivation

8. The basic element of the process of ......................., is motive, behaviour and goal.

a) value b) motivation c) attitude

B) Match the correct pairs :

Group "A"	Group "B"
a. Economic activity b. Highly optimistic c. External values d. Internal values e. Motivation	1. Self fulfillment 2. Entrepreneurship 3. Passion 4. A sense of belonging 5. Entrepreneur 6. Positive or negative 7. Benefit 8. Dimension 9. Necessity Based 10. Market opportunity