Ethics & Entrepreneurship

Entrepreneurship
• The word entrepreneur has a French origin.
• It originated during the Middle Ages when the term entrepreneur was
applied to “the man in charge of the great architectural works: castles
and fortifications, public buildings etc.
• It is derived from the French word, entreprendre, which means “to
undertake.” In a business context, it means to undertake a business
activity or simply to start a business.
What is Entrepreneurship?
• The process of setting up a business is known as entrepreneurship.
• Entrepreneurship is the creation or extraction of economic value.
• Entrepreneurship is viewed as change, generally entailing risk beyond
what is normally encountered in starting a business, which may
include other values than simply economic ones.
• Entrepreneurship is defined as the process of making money, earning
profits and increasing the wealth while posing characteristics such as
risk taking, management, leadership and innovation. The term
Entrepreneurship is a complicated term and gives various meaning
depending on the situation.
Entrepreneurship: Wide Range of Meanings
• The concept of Entrepreneurship has wide range of meanings.
• On one extreme an entrepreneur is a person of very high aptitude who pioneers
change, possessing characteristics found in only a very small fraction of the
population.
• On the other extreme, anyone who wants to work for himself is considered to be
an entrepreneur. That is, entrepreneurship is equated to simply starting one’s own
business. Most economists believe it is more than that.
• To some economists, the entrepreneur is one who is willing to bear the risk of a
new venture if there is a significant chance for profit.
• Others emphasize the entrepreneur plays a role of an innovator who markets his
innovation.
• Still other economists say that entrepreneurs develop new goods or processes that
the market demands and are not currently being supplied.
Entrepreneurship: Wide Range of Meanings
These are various interchangeable meanings of what is entrepreneurship.
– A theory of evolution of economic activities.
– A continuous process and an ingredient of economic development.
– Essentially a creative activity or an innovative function.
– A risk taking factor which is responsible for an end result.
– The name given to the factor of production, which performs the
functions of enterprise.
– Creates awareness among people about economic activity.
– Generates Self-employment and additional employment
Four Key Elements of Entrepreneurship
– Innovation
– Risk taking
– Vision
– Organising skills
Entrepreneur
• An entrepreneur is an individual who creates and/or invests in one or
more businesses, bearing most of the risks and enjoying most of the
rewards.
• The entrepreneur is commonly seen as an innovator, a source of new
ideas, goods, services, and business/or procedures.
Traits of an Entrepreneur
– He is a person who develops and owns his own enterprise.
– He is a moderate risk taker and works under uncertainty for achieving
the goal.
– He is innovative.
– He peruses the deviant pursuits.
– Reflects strong urge to be independent.
– Persistently tries to do something better.
– Dissatisfied with routine activities.
– Prepared to withstand the hard life.
Traits of an Entrepreneur
– Determined but patient.
– Exhibits sense of leadership.
– Also exhibits sense of competitiveness.
– Takes personals responsibility.
– Oriented towards the future.
– Tends to persist in the face to adversity.
– Convert a situation into opportunity.
Attributes of an Entrepreneur
Successful entrepreneurs come in various ages, income levels, gender, and race.
They differ in education and experience. But research indicates that most successful
entrepreneurs share certain personal attributes, including:
• creativity
• dedication
• determination
• Flexibility
• leadership
• Passion
• self-confidence
Attributes of an Entrepreneur
• Creativity is the spark that drives the development of new products, services, or
ways to do business. It is the push for innovation and improvement. It is
continuous learning, questioning, and thinking outside of prescribed formulas.
• Dedication is what motivates the entrepreneur to work hard, 12 hours a day or
more, even seven days a week, especially in the beginning, to get the endeavour
off the ground. Planning and ideas must be joined by hard work to succeed.
Dedication makes it happen.
• Determination is the extremely strong desire to achieve success. It includes
persistence and the ability to bounce back after rough times. It persuades the
entrepreneur to make the 10th phone call, after nine have yielded nothing. For the
true entrepreneur, money is not the motivation. Success is the motivator; money is
the reward.
Attributes of an Entrepreneur
• Flexibility is the ability to move quickly in response to changing market needs. It is being
true to a dream while also being mindful of market realities. A story is told about an
entrepreneur who started a fancy shop selling only French pastries. But customers wanted
to buy muffins as well. Rather than risking the loss of these customers, the entrepreneur
modified her vision to accommodate these needs.
• Leadership is the ability to create rules and to set goals. It is the capacity to follow
through to see that rules are followed and goals are accomplished.
• Passion is what gets entrepreneurs started and keeps them there. It gives entrepreneurs the
ability to convince others to believe in their vision. It can’t substitute for planning, but it
will help them to stay focused and to get others to look at their plans.
• Self-confidence comes from thorough planning, which reduces uncertainty and the level
of risk. It also comes from expertise. Self-confidence gives the entrepreneur the ability to
listen without being easily swayed or intimidated.
Characteristics of an Entrepreneur
(i) Mental Ability: entrepreneur must have creative thinking and must be able to
analyse problems and situations. He should be able to anticipate changes.
(ii) Business Secrecy: he should guard his business secrets from his competitors.
(iii) Clear Objectives: he must have clear objectives as to the exact nature of
business or the nature of goods to be produced.
(iv) Human Relation: he must maintain good relations with his customers,
employees etc. to maintain good relationship he should have emotional stability,
personal relations, tactfulness and consideration.
(v) Communication Ability: he should have good communication skills means both
the sender and the receiver should understand each others message.
Why Entrepreneur?
• Doing What You Love
• Independence and Freedom
• Recognition and Self Fulfilment
• Income Potential
• Own Boss
• Innovation
Entrepreneurship for Engineers
• Innovation and entrepreneurship are key drivers in today’s engineering
world, and the push for sustainable products, services and technologies is
needed now more than ever. From global corporations to small businesses,
national governments to local governments, many are avidly searching for
ways to come up with sustainable solutions to combat pressing
environmental challenges.
• So, when it comes to innovation in engineering, it’s never been more
critical. You’d be mistaken for thinking engineering is all about working
with a rational and logical process with no room for creativity, when in fact
engineering and innovation go hand in hand.
• Innovation is a great influence on the growth and survival of today’s
engineering world, which is why it’s important higher education institutions
are committed to the teaching of innovation and entrepreneurship.
Entrepreneurship for Engineers
• Innovation has the potential to add colossal value to practically everything and anything –
it doesn’t always have to be of monetary value which is why it plays such an important
role in engineering. It can strengthen market uptake of raw materials solutions and build a
bigger platform for a greener future.
• Engineers work to improve society, and not just for the benefit of the local community,
but the planet as a whole. Over the last few years, there’s been a rise in developing
sustainable innovative solutions, from e-mobility and new battery technology for greener,
more sustainable cities, to alternative energy sources and robotics for sustainable mining
technology. Without innovation in these areas, modern life wouldn’t be possible.
• Although there’s still a long way to go in developing and implementing these innovative
technologies and processes in order to overcome societal challenges, such as the recycling
and substitution of raw materials, it’s important that the next generation of engineers are
trained in innovation and are able to use their entrepreneurial mindset to design, create
and implement a favorable future – economically, socially and especially,
environmentally.
Challenges of Entrepreneurship
1. Selecting a service or product
An entrepreneur may have the skills and passion to start a
company, but one important factor in starting a business
is deciding what to sell. To start, they may identify a
demand in their community they could meet. A marketing
firm or freelance researcher may help them conduct
market research to discover what needs there are and
which ones they have the resources to address. For
example, an entrepreneur may learn that the people in
their community drive out of town to get massages, so
they know there is a local demand for a spa that they
could fill.
Challenges of Entrepreneurship
2. Developing a sales strategy
Though an entrepreneur may recognize an
opportunity in a certain community, they might
also research the best way to sell to that
community. They may hire a professional to
create a marketing plan or make one themselves.
To do this, they can assess who their target
audience is and what strategy might best reach
them. For example, if an entrepreneur opens a
business in a rural community where they know
many people listen to the radio, they may
develop a digital ad to broadcast locally.
Challenges of Entrepreneurship
3. Establishing starting funds
For entrepreneurs who start with lower
capital, there are ways to earn funding to
get started. They may begin with a
traditional bank loan or a federal small
business loan. If they plan to provide a
product or service that they know has
significant demand already, they might
start a fundraising campaign. For
entrepreneurs who would rather use a
self-fueled growth model, they may start
by targeting a small audience and slowly
building to serve larger client bases.
Challenges of Entrepreneurship
4. Maintaining a budget
Because running a company can be
unpredictable, an entrepreneur can stay
prepared by carefully maintaining a
budget. They may do this by prioritizing
efficient marketing strategies and
allocating the rest according to their
unique needs. Assessing which expenses
are necessary may help entrepreneurs
adjust their funds to better prepare for
changes. For example, they may observe
that there is a more affordable
manufacturer they can use and reallocate
those savings to address higher utility
costs.
Challenges of Entrepreneurship
5. Sustaining revenue
It's important for entrepreneurs to manage
their organization's money carefully to
account for any potential delay in invoice
payments. Aside from budgeting,
entrepreneurs may charge a down payment
to ensure they can afford expenses until
they receive full payment. By sending
invoices as early as possible and requesting
payment as soon as they complete projects,
entrepreneurs can secure funding to keep
operations running efficiently.
Challenges of Entrepreneurship
6. Staffing the organization
To make sure that they hire people who
care about their organization's mission and
will work hard, entrepreneurs may oversee
the hiring process. They may publish
highly detailed listings to attract
candidates whose qualifications match the
organization's specific needs. Before
interviewing anyone, they can develop
questions to assess if the candidate might
be a good fit for their organization and if
the role can help them in their career
goals.
Challenges of Entrepreneurship
7. Managing employees
As the creators and leaders of an
organization, entrepreneurs guide their
employees on how to best carry out the
organization's goals. They can achieve
this by developing clear, detailed
instructions for each role. When an
entrepreneur effectively communicates
the goals of the organization, employees
may better understand what they expect
and what they're working toward. For
example, if the founder of a clean water
initiative tells employees the story of why
they started the company, they may feel
more inspired to work toward the
common goal of providing clean water.
Challenges of Entrepreneurship
8. Expanding the business
After an entrepreneur establishes their
business, they may reach a level of
success where they want to expand. This
stage of managing a business entails many
considerations, including figuring out a
way to address greater demand,
researching new partners and reassessing
their role in the company. An entrepreneur
may revise existing processes to better
meet the company's needs. For example,
if a consulting firm uses software built for
a smaller client list, they may upgrade to
one that betters suits a wider client base.
Challenges of Entrepreneurship
9. Managing time
Starting a new business and managing it
creates many periodic tasks, so entrepreneurs
may create deadlines to help with prioritizing
their obligations. Because their role can
encompass many responsibilities,
entrepreneurs have several approaches they
can take to manage time. One strategy they
can use is creating goals for themselves and
others in the organization. They may assess
which tasks are absolutely necessary and
which they can delegate.
Challenges of Entrepreneurship
10. Maintaining confidence
It can take a lot of confidence to start a
company and just as much to run one. It's
important for entrepreneurs to maintain
confidence so they can lead effectively and
make appropriate business decisions.
Entrepreneurs may set long- and short-term
goals to track and reflect on their success.
Keeping a community of supportive
leadership and employees may also help.
When an entrepreneur is more confident,
they may feel more prepared to address
challenges.
Challenges of Entrepreneurship
11. Collaborating with partners
For entrepreneurs whose organization is
doing well, they may consider partnering
with other professionals or businesses.
Though this may help them allocate
leadership responsibilities and increase
funding, there are many considerations.
First, entrepreneurs can assess areas of
improvement, whether a partnership
might help and also how their skills and
personalities might combine to benefit
the organization. It's important to
establish the terms of the partnership
with a lawyer to protect all parties'
interests.
The Entrepreneurial Process
The entrepreneurship is a continuous process that needs to be followed
by an entrepreneur to plan and launch the new ventures more efficiently.
The Entrepreneurial Process: Discovery
An entrepreneurial process begins with the idea
generation, wherein the entrepreneur identifies and
evaluates the business opportunities. The
identification and the evaluation of opportunities is a
difficult task; an entrepreneur seeks inputs from all
the persons including employees, consumers, channel
partners, technical people, etc. to reach to an
optimum business opportunity. Once the opportunity
has been decided upon, the next step is to evaluate
it.An entrepreneur can evaluate the efficiency of an
opportunity by continuously asking certain questions
to himself, such as, whether the opportunity is worth
investing in, is it sufficiently attractive, are the
proposed solutions feasible, is there any competitive
advantage, what are the risk associated with it. Above
all, an entrepreneur must analyze his personal skills
and hobbies, whether these coincides with the
entrepreneurial goals or not.
The Entrepreneurial Process: Developing a
Business Plan
Once the opportunity is identified, an
entrepreneur needs to create a
comprehensive business plan. A
business plan is critical to the success of
any new venture since it acts as a
benchmark and the evaluation criteria to
see if the organization is moving
towards its set goals.An entrepreneur
must dedicate his sufficient time
towards its creation, the major
components of a business plan are
mission and vision statement, goals and
objectives, capital requirement, a
description of products and services,
etc.
The Entrepreneurial Process: Resourcing
The third step in the
entrepreneurial process is
resourcing, wherein the
entrepreneur identifies the
sources from where the finance
and the human resource can be
arranged. Here, the entrepreneur
finds the investors for its new
venture and the personnel to
carry out the business activities.
The Entrepreneurial Process: Managing the
company
Once the funds are raised and the
employees are hired, the next step
is to initiate the business operations
to achieve the set goals. First of all,
an entrepreneur must decide the
management structure or the
hierarchy that is required to solve
the operational problems when
they arise.
The Entrepreneurial Process: Harvesting
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.
Sphere of Influence
• In business, we think of a sphere of influence as the people who find
what we say trustworthy. This might mean that someone asks your
opinion on what product is best. For example, if you are an expert at
giving financial advice, someone might ask you about the stock pick
of the week. Or, someone looking for a used car might ask a trusted
mechanic what is easy to fix or known for its reliability. This position
of trust is used in various ways when nurturing business relationships.
• Your sphere of influence is essentially a list of people. This list could
be quite substantial. It consists of all the people who know you, both
professionally and unprofessionally, and who may present an
opportunity for word of mouth marketing, a referral, or even direct
business.
Sphere of Influence
1. The education of your SOI about what you do and the type of clients
you are interested in.
2. Keeping your SOI informed of any changes in your business or new
items of interest so they can sound more knowledgeable about your
company when describing it to potential clients
3. Remind them constantly that your business is built on referrals.
4. Reward them in some manner for their referrals.
Sphere of Influence: Importance
• Remember it’s important that to help your SOI, you need a firm grasp on the type
of client or customer you are looking for.
• If you are unclear about which customers you’re targeting ask yourself these
questions:
i. What characteristics do most of the clients tend to have?
ii. What industry, demographic or geographic characteristics do my potential
clients have?
iii. How will my sphere of influence identify potential clients?
• Once you’ve identified who your ideal customers are you can begin to utilise the
contacts and knowledge of your sphere of influence to refer clients to your
business.
• As new clients come into your business your sphere of influence will only
continue to grow and keep reaping benefits.
Advantages of Entrepreneurship
• Autonomy: People enjoy more autonomy or freedom in
entrepreneurship as they invest their time, money, and efforts into the
business to make it successful. They are more involved and self-driven
as there is no one to interfere or ask for explanations of their decisions.
• Motivating: As entrepreneurs start making decisions and get
successful results, they become more motivated and engaged to work
hard to ensure success in their business.
• Flexibility: Entrepreneurship allows working without a fixed routine
time that helps to organize other works with better control and
flexibility. This can improve mental and physical well-being.
Advantages of Entrepreneurship
• Career orientation: Entrepreneurship allows someone to align his desire
and passion into the work and incorporate his values and beliefs into the
business. This can help him to move in a career path of his choice.
• Develop skills: Entrepreneurship involves overcoming challenges that
develop the growth mindset and professional abilities. It gives first-hand
knowledge and experience that helps to develop leadership skills and
managerial techniques.
• Economic development: A successful venture gives a lot of scope to
improve earnings by own efforts and involvement that is not possible in any
jobs. There are various opportunities and ways that can be explored to gain
a competitive advantage and profitability.
Advantages of Entrepreneurship
• Meeting people: When a new business is started, there are possibilities to connect
with people having exposure and experience in that particular field. Interaction
with like-minded people helps to focus on the work more strategically and
ambitiously.
• New experiences: Entrepreneurship gives new experiences and challenges that
are often unexpected. This helps to gain new lessons and develop problem-solving
and decision-making abilities that are useful for the further growth of the business.
• Building your own team: Entrepreneurs have the freedom to choose their team to
work with, select their clients and partners. He has the sole decision-making
power about the functioning of his company, its policies, and its culture.
• Get full rewards: In an entrepreneurship journey, the success of a business is
enjoyed by the entrepreneur with no one else to claim. One can enjoy the profit
and re-invest it into the business towards further growth.
Disadvantages of Entrepreneurship
• Uncertain income: Entrepreneurship doesn’t ensure a steady and
certain income as in jobs. When in the job, there is a fixed monthly
income but in entrepreneurship, the income flow is uncertain and not
guaranteed especially in the early stage of a business venture.
• Need to devote more time: As an entrepreneur, one needs to devote a
lot of time to establishing the business without having the luxury of
fixed working hours.
• Risk of failure: The initial stages of the entrepreneur journey may be
very challenging and there are risks that the business strategies may
not work resulting in losses in business.
Disadvantages of Entrepreneurship
• Create new customers: Customers often prefer established businesses for
purchasing products and availing services. Some customers often rely on
public reviews and personal references. As a startup business, it is difficult
to build a customer base and takes time to develop brand awareness.
• Financial instability: In the initial stages of entrepreneurship, there can be
more outflow of money as an investment as compared to the return from
business. As a self-employed person, it becomes a big challenge for
financial security.
• Greater competition: As an entrepreneur, it becomes difficult to compete
with established businesses in the same field due to a lack of resources in
terms of knowledge, experience, and customer support.
Disadvantages of Entrepreneurship
• Lack of investors/partners: Some ventures require a lot of
investment but it is difficult to find investors or partners to work with
due to the absence of a history of financial success. Sometimes
entrepreneurs start a business in debt and have to work very hard to
recover in course of time.
• More responsibilities: As an entrepreneur, one has to look after a lot
of things related to business and take care of finances, legal issues,
manpower, sales, customer support, and many other things to keep the
company functioning systematically
Firms in Economics

• The terms “Firm,” “Company,” “Business,” and “Establishment” are

often used interchangeably to refer to any organization that offers
goods or services.
• In economics, firms are organizations that produce goods and services.
They are typically owned and operated by individuals or groups of
individuals, and are motivated by the desire to make a profit.
Roles of Firms
They play a crucial role in the functioning of market economies by:
• allocating resources
• producing goods and services
• providing employment opportunities
Firms: Types
• Sole proprietorship: A sole proprietorship is owned and operated by
one person. It is the simplest and most common form of business
structure.
• Partnership: A partnership is owned and operated by two or more
individuals. Partners share profits and losses, and they have a say in
the management of the business.
• Corporation: A corporation is a separate legal entity from its owners. It
is owned by shareholders, who elect a board of directors to manage the
business.
Firms: Types
• Limited Liability Company (LLC): An Limited Liability Company is a
hybrid structure that combines the personal asset protection of a
corporation with the tax benefits of a partnership or sole
proprietorship.
• Cooperative: A cooperative is a business owned and operated by a
group of individuals for their mutual benefit.
• Non-Profit Organization: Non-profit organizations are established to
serve a specific social cause or purpose, rather than to make a profit.
• Publicly traded company: A publicly traded company is a company
whose shares are traded in a public stock market.
Creative Destruction
• Creative destruction can be defined as the decay of long-standing
practices, procedures, products or services followed by more
innovative, disruptive ones. It is based on the principle that old
assumptions need to be broken so that new innovations can benefit
from existing resources and energy.
• Creative Destruction is the ongoing process of innovating new
products and services to replace old ones. New products meet
customer needs better, making previous versions inadequate or
obsolete.
Creative Destruction
• Innovation and risk-taking can be important keys to success for
companies. Creative destruction ensures that there can continue to be
growth and progress and that we can generate sustainable wealth.
From this, we can conclude the following:
• If companies are willing to constantly question their business model
and adapt it if necessary, they have a better chance of remaining active
in the market.
• Newly founded companies and start-ups should be given special
support, as innovative ideas often come from new market participants.
These do not have to take into account already established products
and existing markets.
Creative Destruction: Examples
• Photography companies whose business was greatly replaced by
smartphone incorporated companies;
• Traditional watches increasingly becoming replaced by smartwatches;
• Tablets and kindles replacing conventional printed books;
• Music streaming services (spotify, apple…) replacing digital shopping
of music songs or albums;
• Video streaming services replacing DVDs.
Innovation & Technology
• Modern leaders have understood the advantages of innovation in
business for increment and growth in the current business
environment. As a result, it is believed that there is great demand for
managers and executives with a penchant for business innovation.
• The importance of technology in business cannot be understated.
Companies worldwide are relying on emerging technologies to help
improve their competitive advantage and drive strategy and growth.
Today, we cannot even consider doing business without the Internet,
video conferencing, project management apps and more. In fact, the
role of technology in business will only continue to expand. This fact
necessitates incorporating technology into your processes if you aren’t
already doing it.
Importance of Innovation
1. Solves complex business problems
Knowing the answer to what product management life cycle is cannot help managers or
executives solve complex business problems. Moreover, the uncertainties and complex
business situations fueled by the COVID-19 pandemic can make things worse for them.
Therefore, to judiciously and effectively solve complex business problems, it is imperative
to use innovative ideas. Leaders must use external (online data, literary works, etc.) and
internal sources to develop innovative ideas to solve complex business problems. At first, it
might seem like a difficult task, but it is considered to steer your business in the right
direction.
2. Increases productivity
One of the benefits of innovation in business is the increase in productivity of individuals,
processes, and business models, among others. Simply put, innovation presents new ideas to
business leaders to increase efficiency with minimum resources. Furthermore, reducing
business and other risks.
Importance of Innovation
3. Brings uniqueness and novelty to business process
Business processes have been the same for more than a few decades. However, with the introduction
of innovation in business, there has been a disruption that is believed to be caused due to novelty,
creativity, and uniqueness. That is also helping in making the business stand out from the rest and
vicariously contributing to increased revenue and market share.
4. Gives a competitive advantage
Thinking innovatively or creatively can help managers and executives develop unique marketing
campaigns to help them stand out. Also, formulate promotional and advertising strategies that will
help in increasing market share and revenue, giving the company a competitive advantage.
5. Reduces cost and increases revenue
As mentioned above, one of the biggest advantages of innovation is that it helps increase revenue and
market shares. Subsequently, leading to a reduction in cost. Meanwhile, innovation has many
advantages in business, but the points mentioned above will help business leaders, managers, and
executives understand the importance of using innovative ideas actively. If not, then in the next part,
we will discuss how innovation helps achieve business success.
Importance of Technology in
Entrepreneurship
1. Communication
Technology enables a faster, wider and more efficient means of communication. This will
include interactions within your team or with your clients, potential customers, investors or the
general public. Video conferencing technologies, like Skype and Zoom, make meetings from
across geographical borders convenient. As for within your organization, an app like Slack or
Asana can help you simplify communication within your team. You can use this to track
projects, details on tasks, deadlines, etc., regardless of whether they work from under the same
roof, or remotely. Email, newsletters, social media, and other platforms are all equally essential
resources for communication.
2. Security
With the rise in cyber-crime and data breaches, tight security is imperative for all businesses.
Today, all business assets are mostly stored in the cloud or on endpoints. This has made it
necessary for companies to adopt strict measures to keep their data as well as that of their
customers secure.
performed by people. This helps by saving on employee costs, or having them work in areas
where they are really needed.
Importance of Technology in
Entrepreneurship
3. Efficiency
Technology helps increase the efficiency of systems, products and services. It helps
track and streamline processes, maintain data flow and manage contacts and
employee records. In fact, this increased efficiency in operation helps reduce costs
as well as enable the business to grow rapidly.
4. Employee assistance
Most employees feel the need to use the latest technologies in performing their tasks
with the belief that it will help them deliver the best results. Companies need to
consider the cost-output relationship and provide suitable technology to enhance
results.
5. Time and money
There’s no doubt that technology helps businesses achieve more in less time, with
no detriment to the quality of product or service. In fact, technology is now
performing repetitive tasks that were earlier
Thank you