PROJECT MANAGEMENT

&
ENTREPRENEURSHIP

KHU-702

BY
UMA SHARMA
 Syllabus UNIT-01

1.Entrepreneurship: need, scope

2 .Entrepreneurial competencies & traits
3.Factors affecting entrepreneurial
development
4.Entrepreneurial motivation (Mc Clellend’s
Achievement motivation theory)
5.Conceptual model of entrepreneurship
6.Entrepreneur vs. intrapreneur
7.Classification of entrepreneurs
8.Entrepreneurial Development Programmes
 Content – Unit I

Introduction: Meaning, definition and concept

of entrepreneur, entrepreneurship and
entrepreneurship development. The
entrepreneurial mind-set. Common myths to
becoming an entrepreneur and how to
overcome them.
Corporate entrepreneurship. Concepts of
intrapreneurship, types of entrepreneurs,
functions of entrepreneur. Family Business,
Women entrepreneurship, social and rural
entrepreneurship.
 ENTREPRENEUR
An entrepreneur is often considered as a person
who sets up his own business or industry. He has
initiative, drive, skill and spirit of innovation who
aims at high goals.
The entrepreneur is the individual that identifies
the opportunity, gathers the necessary resources
and is ultimately responsible for the performance
of the organization.
Entrepreneurs are action oriented, highly
motivated individuals who take risks to achieve
goals.
Entrepreneurs play a vital role in the economic
development of a country.
 The Entrepreneur

In French entreprende, which means – ‘Go

between’ or ‘to undertake’
Webster dictionary – one who organizes,
manages and assumes the risks of a
business or enterprise

Ritesh Singhal
 Meaning
 Entrepreneur (Oxford Dictionary) – Person who
undertakes an enterprise with chances of profit or loss.
(Entrepreneur is a person who undertakes a business
activity of which he has no background and faces
considerable risks in the process. If either of the two
elements, i.e., “no background” or “considerable risk” is
missing in the venture, it is no entrepreneurship).
 Enterprise (Oxford Dictionary) – Bold Undertaking
 Entrepreneur – (New Encyclopedia Britannica) – An
individual who bears the risk of operating business in
the face of uncertainty about the future conditions.
 Entrepreneurship – It is a philosophy or process
through which an entrepreneur seeks innovation and
employment.
 Entrepreneur Entrepreneurship
Enterprise
Person Process or Philosophy
 Entrepreneur - Definition
 Richard Cantillon: As a person, who pays a certain price to a
product to resell it at an uncertain price, thereby making
decisions about obtaining and using the resources while
consequently admitting the risk of enterprise.
 Adam Smith: An individual, who undertakes the formation of an
organization for commercial purposes by recognizing the
potential demand for goods and services, and there by acts as an
economic agent and transforms demand into supply.
 Peter F. Drucker: An entrepreneur is one who always searches
for changes, responds to it and exploits it as an opportunity.
He believes in increasing the value and consumer satisfaction.
Thus, a professional manager who mobilizes resources and
allocates them to make a commercial gain from an opportunity,
is also called an entrepreneur.
 Francis A Walker: The true Entrepreneur is one who is
endowed with more than average capacities in the task of
organizing and coordinating the various other factors of
production. He should be pioneer and a captain (Leader) of
 Entrepreneur - Definition

Joseph Schumpeter: Entrepreneur is an innovator, who

carries out new combination to initiate the process of
economic development through introduction of new
product, new market, new source of raw material and
establishment of new organization.
The process of development is a deliberate and continuous
phenomenon which is actively promoted by the services of
a change agent who provide economic leadership.
To sum up, entrepreneurship may be defined as a
systematic innovation which consists of the purposeful and
organized search for changes, and a systematic analysis of
the opportunities that such change might offer for
economic and social transformation.
 Evolution of Entrepreneur

Period I: Entrepreneurship in Ancient Period

 Dharma, Manusmriti

 Agriculture, Handicraft, iron, cloths, livestocks

Period II: Entrepreneurship in pre-independence era

before 1850
 Agriculture, metalwork, handicraft, stone carving, jewellary
designing. Domination of parsis, Marwari's, Gujarati, Jain.
Period III: During 1850 – 1947
 Britishers started harnessing the natural resources of India to

their own advantage simultaneously developing the roads,

railways, ports etc.
 Jute, Textile, Tea, Coal

 Emergence of Parsis entrepreneurs

 Swadeshi Movement
 Evolution of Entrepreneur

 Period IV: During 1947 and Onwards Post Independence

 Industrial Policy Resolution IPR, 1948

 Marwaris such as Birlas, Dalmia, Goenkas, Singhanias, Bajaj,

Kirloskar rising.
 Industrial Policy Resolution IPR, 1956

 Establishment Public Sector and heavy industries

 Nationalization of Banks.

 Formation of NSIC (National Small Industries Corporation), KVIC

(Khadi and Village Industries), MSME (Ministry of Micro, Small

and Medium Enterprises), SFC (State Funding Corporations),
NIESBUD (National Institute for Entrepreneurship and Small
Business Development), EDII (Entrepreneurship Development
Institute of India) etc…
 Rising family entrepreneurs
 Evolution of Entrepreneur
 1600 – French verb – Entreprendre – to undertake.
 Middle Ages: Actor and person incharge of large scale
production project.
 1700 – Person bearing Risk or Profit in a fixed price contract
(Risk)
 1725 – Richard Cantillon – Person bearing risks is different
from Capital Supplier (Risk bearer)
 1803 – Jean Baptiste Say – Shifts economic resources out
from an area of lower to higher productivity & greater yields
(Organizer or Coordinator)
 1876 – Francis Walker – Distinguish between those who
supplied funds and receive interest and those who received
profit from managerial capabilities. (Leader who mobilizing
resources)
 1934 – Joseph Schumpeter – Innovator and develops untried
technology (Productivity & Innovation)
 Evolution of Entrepreneur
1961 – David McClelland – Highly motivated,
energetic, moderate risk taker (Need for
achievement)
1964 – Peter Drucker – Searches for change, responds
to it & exploits as opportunity (Opportunity Focused)
1979 – Kirzner – An arbitrageur who discover
opportunity at low prize and sell at high price because
of inter-temporal and inter spatial demand (Demand
focused)
1980 – Karl Vesper – Seen differently by Economists,
Psychologists, Businessmen, Politicians (Environment)
1983 – Gifford Pinchot – Intrapreneur (an
entrepreneur within an already established
organization)
 Evolution of Entrepreneur

1985 – Robert Hisrich – Creating something

different with value, devoting time & effort,
assuming risks; results– rewards and satisfaction
(Leadership & Vision)
2008 – National Knowledge Commission of India
“The professional application of knowledge, skill
and competencies and/or monetizing a new idea,
by an individual or a set of people by launching
an enterprise de novo or diversifying from an
existing one, thus to pursue growth while
generating wealth, employment and social goods.
 Charm of becoming an entrepreneur

Opportunity to create one’s own destiny

Opportunity to make differences
Opportunity to reach one’s full potential
Opportunity to reap impressive profits
Opportunity to contribute to society
Opportunity to do what one enjoys
 Pros & Cons
 You are the boss  You are alone
 All profits are yours  All decisions are yours
 There will be great  All losses are yours
variety in roles and  You will need to put in
tasks long hours
 Increases self  Lack of success will
confidence effect self esteem
 Work can be very  Exiting the business is
satisfying difficult
 Success will give you  Pressures will affect
immense satisfaction social and family life

Ritesh Singhal
 Enterprise

Enterprise
 An entrepreneur is a person who starts an
enterprise. The process of creation is called
entrepreneurship. The entrepreneur is the actor
and entrepreneurship is the act. The outcome of
the actor and the act, is called the enterprise. An
enterprise is the business organization that is
formed and which provides goods and services,
creates jobs, contributes to national income,
exports and contributes to the overall economic
development.
 Characteristics of Entrepreneur
(1) Vision :
An entrepreneur has a dream and he visualizes the ways and means to achieve dream. In
doing so he visualizes :
 Market Demands
 Socio-Economic Environment
 Technological Environment
And then based on these dynamic, he visualizes a future for his business venture.

(2) Knowledge :
An entrepreneur has full knowledge about all the technicalities of his business- be it
technological, operational, financial or market dynamic.

(3) Desire to succeed :

An entrepreneur has a strong desire to succeed in life. Their dreams are not just limited to
achieving one single goal but they constantly work to achieve higher goals.

(4) Independence :
An entrepreneur needs independence in work and decision-making. They don't follow the
rules of thumb but make their own rules and destiny.

(5) Optimism :
Entrepreneurs are highly optimistic about achieving their vision.
 Characteristics of Entrepreneur
(6) Value Addition :
Entrepreneurs do not follow the conventional rules of thumb. They have a
constant desire to introduce something new to the existing business. They
create, innovate or even add value to the existing products/services.

(7) Leadership :
An entrepreneur exhibits the qualities of leader. They are good planner,
organizers, have good communication skill, good decision makers, take
initiative to implement plans and are result-oriented.

(8) Hardworking :
At times they are called workaholics. Work is worship for then. They put in
continuous efforts to achieve success and know that there is no substitute for
hark work.

(9) Risk-Taking Ability :

Risk is an inherent and inseparable element of entrepreneurship. He assumes
the uncertainty of future. An entrepreneur guarantees rent to the landlord,
wages to employees and interest to the investor in the hope of earning more
than the expenses.
 Characteristics of Entrepreneur
Other characteristics are:

1. Mental ability
2. Clear objectives
3. Business secrecy
4. H.R. ability
5. Communication ability
6. Technical knowledge
7. Achievement– oriented
8. Perseverance
9. Ethical
10. Motivator
11. Self– confident
12. Long term involvement
13. High energy level
14. Problem solver
15. Initiator
16. Goal setter
 Entrepreneur vs Entrepreneurship

 The term “entrepreneur” is often used interchangeably with

entrepreneurship but, conceptually, they are different, yet
they are just like the two sides of a coin. Both the terms are
co-related. An entrepreneur is a person who bears the risks,
unites various factors of production and carries out creative
innovations. He/she is an individual or one of a group of
individuals who try to create something new. He/she always
attempts to bring about change in terms of factor
proportions, which is known as innovation.
 On the contrary, entrepreneurship is the set of activities
performed by an entrepreneur. It is process of identifying
opportunities in the market place and marshalling the
resources required to pursue these opportunities for long
term gains. It is the attempt to create value.
Relationship between Entrepreneur and
Entrepreneurship
 Theories of Entrepreneurship

Meaning of Entrepreneurship:
Entrepreneurship refers to a process of action an
entrepreneur undertakes to establish his
enterprise. It is a creative and innovative response
to the environment. In other words
entrepreneurship can be defined as an ability to
discover, create or invent opportunities and
exploit them to the benefit of the society, which in
turn brings prosperity to the innovator and his
organization.
Main theories of entrepreneurship are
summarized as follows:
 Entrepreneurship a Function of
Innovation: Joseph A. Schumpeter (1934)
 For the first time, put the human agent at the centre of the process of
economic development and assigned a critical role to the entrepreneurship in
his theory of economic development. He considered economic development as
a discrete technological change. The process of development can be
generalized by five different types of events:
(i) Firstly, it can be the outcome of the introduction of a new product in the
market.
(ii) Secondly, it can be the result of a new production technology or new method
of production.
(iii) Thirdly, it may arise on account of a new market.
(iv) Fourthly, it may be the consequences of a new source of supply.
(v) Fifthly, it may be due to the new organization of any industry.
According to Schumpeter
(i) Development is not an automatic process, but it must be deliberately and
actively promoted by some agency within the system, Schumpeter called the
agent who initiates the above changes as an entrepreneur.
(ii) He is the agent who provides economic leadership that changes the initial
conditions of the economy and causes dynamic changes.
(iii) By nature, he is neither technician, nor a financier, but he is considered an
innovator.
 Entrepreneurship : An Organization
Building Function: Fredrick Harbison
(1964)

 He states that the 'organisation building' ability is the most critical

skill needed for the industrial development. According to him
entrepreneurship means the skill to build an organization.
Harbison spots the crux of the entrepreneurship in his ability to
multiply himself by effectively delegating responsibilities to
others. The main features are:
 (i) Unlike Schumpeter, Harbison's entrepreneur is not an innovator
but an 'organisation builder' who must be able to harness the new
ideas of different innovators to the rest of the organization.
 (ii) Such persons are not always the men with ideas or men who
try new combinations of resources but they may simply be good
leaders and excellent administrators.
 (iii) Harbison's definition of entrepreneurship lays more stress on
the managerial skills and creativity so far as organisation is
concerned.
 Entrepreneurship : A Function of
Managerial Skill and Leadership: Hoselitz

 He states that a person who is to become an industrial

entrepreneur must have additional personality traits. In
addition to being motivated by the expectations of profit he
must also have some managerial abilities and more
important he must have ability to lead.
 Hoselitz maintains that financial skills have only a
secondary consideration in entrepreneurship. According to
him managerial skills and leadership are the important facts
of entrepreneurship. He identifies three types of business
leadership in the analysis of economic development of
under-developed countries:
 The merchant money lender type
 The managerial type
 The entrepreneur type
 Entrepreneurship: A Function of High
Achievement: McClelland

 He states that a business man who simply behaves in traditional

ways is not an entrepreneur. Moreover, entrepreneurial role appears
to call for decision making under uncertainty. McClelland identified
two characteristics of entrepreneurship
 firstly "doing things in a new and better way" and secondly "decision
making under uncertainty".
 Persons with high achievement would take moderate risks. They
would not behave traditionally (no risk). The high achievement is
associated with better performance at tasks which require some
imagination, mental manipulation or new ways of putting things
together, and such people do better at non routine task that require
some degree of initiative. People with high achievement are not
influenced by money reward as compared to people with low
achievement. People with low achievement are prepared to work
harder for money or such other external incentives.
 Need for Achievement (Factor responsible for
entrepreneurship)
 Need for Power
 Entrepreneurship: A Function of Social,
Political and Economic structure: John
Kunkel
 He states that the industrial entrepreneurship depends upon four
structures which are found within a society or community.
(i) Limitation Structure: The society limits specific activities to
members of particular subcultures. This limitation structure affects
all the members of a society.
(ii) Demand Structure: The limitation structure is basically social and
cultural but the demand structure is mainly economic. The demand
structure is not static, and changes with economic progress and
government policies.
(iii) Opportunities Structure: This structure is necessary to increase
the probability of entrepreneurial activity. The opportunity structure
constitutes the availability of capital, management and
technological skills, information concerning production methods,
labours and markets.
(iv) Labours Structure: Kunkel argues that the labours supply cannot
be viewed on par with the supply of other material conditions like
capital. He states that labours means 'men' and is a function of
several variables. The supply of factory labours is governed by
available alternative means of livelihood, traditionalism and
 Entrepreneurship: 'Input Completing' and 'Gap filling'
Function: Liebenstein
(Theory of X-efficiency)

 He identified gap filling as an important characteristic of

entrepreneurship. In economic theory the production function is
considered to be well defined and completely known.

 It is the entrepreneurial function to make up the deficiencies or to fill the

gaps. These gaps arise because all the inputs in the production function
cannot be marketed because some inputs like motivation, leadership etc.
are vague in their nature and whose output is underminate.

 This "gap-filling" activity gives rise to a most important entrepreneurial

function namely "Input-Completing". He has to marshal all the inputs to
realize final products.
 Routine Entrepreneur
 New Entrepreneurship
 Twin roles of entrepreneur
 Gap Filling

 Input completing
 Entrepreneurship: A Function of Group
Level Pattern: Frank W. Young

He was reluctant to accept the entrepreneurial

characteristics at the individual level.
According to him, instead of individual, one must find
clusters which may qualify itself as entrepreneurial
groups, as the groups with higher differentiation have
the capacity to react.
He defined 'reactiveness' or 'solidarity' as the degree to
which the members of the group create, maintain and
project a coherent definition of their situation; and
'differentiation' is defined as the diversity, as opposed to
coherence, of the social meanings maintained by the
group, it tends to intensify its internal communication
which gives rise to a unified definition of the situation.
 Knight’s Theory of profit
Knight points out that entrepreneurs are specialized group of
persons who bears risk and deals with uncertainty. Main
features of this theory are:
 Pure Profit
 Situation of Uncertainty
 Risk Bearing Capability
 Guarantee of Specified Sum
 Identification of Socio Economic and Psychological Factors
 Use of consolidation techniques to reduce business
 Eg Bhai Mohan Singh of Ranbaxy run a profitable business
for many years had high risk bearing capability found a
golden opportunity to exit Ranbaxy and he grabbed it (Sold
to Daiichi sankyo Japan, now owned by Sun Pharma).
 Papanek and Harris Theory

Papanek and Harris propounded that when

certain economic conditions are favorable,
entrepreneurship and economic growth will
take place. The highlights of the theory are:
 Economic Incentives
 Link between economic gains and inner urge
 Economic gain
 Harvard School Theory

 Harvard School (A.H. Cole) Contemplated that

entrepreneurship involves any deliberate
activity that initiates, maintains and grows a profit-oriented
enterprise for production or distribution of economic goods
or services, which is inconsistent with internal and external
forces.

Internal Forces:
 These forces refer to the internal qualities of the individual
such as intelligence, skill, knowledge experience, intuition,
exposure, etc. These forces influence the entrepreneurial
activities of an individual to a great extent.
External Forces:
 These forces refer to the economic, political, social,
cultural and legal factors which influence origin and
growth of entrepreneurship in an economy.
 Classification of theories
 Sociological theories
 Theory of religious belief – Max Weber
 Theory of Entrepreneurial Supply – Thomas Cochran
 Theory of Social Change – E.E. Hagen
 Theory of Group Level Pattern – F. Young
 Economic theories
 Schumpeter’s Theory of Innovation
 Leibenstein’s Theory of X-efficiency
 Mark Casson’s Theory
 Papanek and Harris Theory
 Harvard School Theory
 M.Kirzner’s Theory of Adjustment
 McClelland’s Theory of Achievement Motivation
 Knight’s Theory of Profit
 Hayek’s Theory of Market Equilibrium
 Cultural theories
 Hoselitz’s Theory
 Stoke’s Thoery
 Psychological theories
 Theory of Personal Resourcefulness
 Theory of Entrepreneurial Supply - John H. Kunkel
 Models of Entrepreneurship
 Kao’s Conceptual Model
 Common myths to becoming an
entrepreneur

Myth #1: Entrepreneurs don’t have a personal life

Myth #2: Entrepreneurs take lots of risks
Myth #3: Entrepreneurs are only motivated by money
Myth #4: Entrepreneurs raise money from venture
capitalists
Myth #5: Entrepreneurs have great ideas
Myth #6: Anyone can be an Entrepreneur
Myth #7: Entrepreneurs have formal training and
education
Myth #8: Entrepreneurs are young
Myth #9: Entrepreneurs don’t quit until they succeed
Myth #10: Entrepreneurship is genetic
Myth #1: Entrepreneurs don’t have a
personal life
Myth #2: Entrepreneurs take lots of risks
Myth #3: Entrepreneurs are only motivated by
money
Myth #4: Entrepreneurs raise money from venture
capitalists
Myth #4: Entrepreneurs raise money from venture
capitalists
Myth #5: Entrepreneurs have great ideas
Myth #6: Anyone can be an Entrepreneur
Myth #6: Anyone can be an Entrepreneur
Myth #7: Entrepreneurs have formal training and
education
Myth #8: Entrepreneurs are young
Myth #8: Entrepreneurs are young
Myth #9: Entrepreneurs don’t quit until they
succeed
Myth #9: Entrepreneurs don’t quit until they
succeed
 Myth #10: Entrepreneurship is genetic

You are not born an entrepreneur.

Here’s a breakdown of family-owned
businesses by generation.
30% survive to the second generation
12% survive to the third generation
3% survive to the fourth generation
 Classification of Entrepreneurs

Clarence Danhof (1949) classifies

entrepreneurs into four types –
Innovative

Imitative

Fabian and

 Drone
 Classification of Entrepreneurs

 Innovating entrepreneurs : Innovative entrepreneurship is

characterized by aggressive assemblage of information and the
analysis of results derived from sound combination of factors.
 Persons of this type are generally aggressive in experimentation
and cleverly put attractive possibilities into practice.
 An innovating entrepreneur sees the opportunity for introducing
a new technique or a new product or a new market.
 He or she may raise money to launch an enterprise, assemble
the various factors, choose top executives and set the
organization goals.
 Schumpeter’s entrepreneur was of this type. Such an
entrepreneur introduces new products and new methods of
production, opens new markets and re-organises the enterprise.
 Classification of Entrepreneurs

 Adoptive or imitative entrepreneurs: This kind of

entrepreneurs are characterised by readiness to adopt
successful innovations created by innovative entrepreneurs.
 These type of entrepreneur are revolutionary entrepreneurs
with the difference that instead of innovating the changes
themselves, they just imitate the technology and techniques
innovated by others.
 These entrepreneurs are most suitable for developing countries
because such countries prefer to imitate the technology,
knowledge and skill already available in more advanced
countries.
 Imitative entrepreneurs are most suitable for the
underdeveloped nations because in these nations people prefer
to imitate the technology, knowledge and skill already available
in more advanced countries.
 Classification of Entrepreneurs

 Fabian entrepreneurs : Entrepreneurs of this

type are very cautious and skeptical while
practicing any change. They have neither the will to
introduce new changes nor the desire to adopt new
methods innovated by the most enterprising
entrepreneurs.
 Such entrepreneurs are shy and lazy. Their
dealings are determined by custom, religion,
tradition and past practices.
 They are not much interested in taking risk and
they try to follow the footsteps of their
predecessors or follow only after they are satisfied
with its success rate.
 Classification of Entrepreneurs

 Drone entrepreneurs : Drone entrepreneurship is

characterized by a refusal to adopt and use opportunities to
make changes in production methods.
 Such entrepreneurs may even suffer losses but they do not
make changes in production methods. They are laggards as
they continue to operate in their traditional way and resist
changes. When their product loses marketability and their
operations become uneconomical they are pushed out of the
market.
 They are conventional in the sense that they stick to
conventional products and ideas.
 The traditional industries of Kerala are characterized by
drone entrepreneurs.
 The coir and bamboo industries are still in the hands of
laggards who refuse to innovate.
 Classification of Entrepreneurs

According to the types of business

 Trading Entrepreneurs
 Wholesale, Retail, Import, Export etc
 Industrial Entrepreneurs
 Corporate Entrepreneurs
 Agricultural Entrepreneurs
 Dairy, Forestry, Animal husbandry, horticulture etc
 Retail Entrepreneurs
 Service Entrepreneurs
 Social Entrepreneurs
 Classification of Entrepreneurs

According to the use of technology

 Technical Entrepreneurs

 Non-technical Entrepreneurs

 High-tech Entrepreneurs

 Low-tech Entrepreneurs

 E- Entrepreneurs

 Business process outsourcing

According to the motivation

 Pure Entrepreneurs
 Forced Entrepreneurs
 Accidental Entrepreneurs
 Induced Entrepreneurs
 Classification of Entrepreneurs

 According to the Stages of development

 First Generation Entrepreneurs

 Classical Entrepreneurs

 Inherited Entrepreneurs

 According to Area
 Rural Entrepreneurs
 Artisan, Khadi, Village industries, handicraft
 Urban Entrepreneurs
 Global Entrepreneurs
 Local Entrepreneurs
 According to Organization
 Individual & Group Entrepreneurs

 Private & Government Entrepreneurs

 According to gender and age

 Men & Women Entrepreneurs
 Young & old Entrepreneurs
 Unclassified Entrepreneurs

Intrapreneur
Foodapreneur
Technopreneur
Momapreneur
Artapreneur
Edupreneur
 Manager v/s Entrepreneur

 An Entrepreneur and a Manager make an interest

comparison.
 To succeed as an entrepreneur, one is required to possess
great managerial skills and more. Therefore, there are a lot
of commonalities between the two in terms of planning,
organizing, directing and controlling abilities which are
essential qualities of a manager.
 However, there are great deals of differences as well. The
differences primarily lie in approach to various issues.
Manager v/s Entrepreneur
 Manager v/s Entrepreneur

Manager Entrepreneur
Skills Professional training, B- Knows business intimately
school trained
Education Highly Educated May be less educated in earlier
al level studies
Attention Primarily on events inside Primarily on technology and
corporation market place
Action Delegate action, supervising Gets hand dirty, may upset
and reporting employees by suddenly doing
their work
Failure Strive to avoid mistakes and Deals with mistakes and
and surprises failures as learning exercise
mistakes
Problem Works out problems within Deals problems in large and
solving system formal structure
style
 Intrapreneurship
Gifford Pinchot discover the word
“Intrapreneur” in 1982.
Intrapreneurship is defined as
entrepreneurship within an existing business
set up.
That is to say – Intrapreneurship is corporate
entrepreneurship.
When a corporation indulges in
entrepreneurial activities, like diversification
into new businesses, it is called
Intrapreneurship.
 Intrapreneurship

Intrapreneur is a manager who focuses on

innovation and creativity; who brainstorms,
dreams and puts ideas into profitable venture
by operating within the organizational
environment.
It is a tool for capitalizing the entrepreneurial
spirit of employees in the organization.
It gives managers the freedom to try new
ideas by employing firm’s resources in a
unique way.
 Intrapreneurship

 Google’s Intrapreneurship program:

 Through this Google Intrapreneurship program, all the
employees are empowered and encouraged to spend 20% of
their time on projects that interest them and that they think
will benefit Google and their customers.
 The Google “Innovation Time Off” Intrapreneurship program
has a formal process for their selection of entrepreneurial
projects, for the formal evaluation process and the monitoring
of each Google approved entrepreneurial project.
 For a Google employee, to participate in the program, he/she
needs to submit a project proposal with a timeline.
 It is critical to note that several of Google’s newest products
and services such as Gmail, Google news, Orkut and AdSense
were all originated through this program.
 Intrapreneurship

In India also, Marico, manufacturers of

Parachute Hair Oil, Saffola, Kaya Skin Clinic
Industries have institutionalized innovation
awards, where they receive 30-40 entries
every year for innovations across the
spectrum, including factories, brand, sales
and HR, virtually covering the whole
organization.
Consequences of not encouraging Intrapreneurship:

A classic case of entrepreneurs is that of the

founders of Adobe, John Warnock and
Charles Geschke.
They both were employees of Xerox. As
employees they were frustrated because
their new product ideas were not
encouraged.
They quit Xerox in the early 1980s to begin
their own business. Currently, Adobe has an
annual turnover of over $3 billion.
 Intrapreneurship

Hurdles in Intrapreneurship:
Need for organization alignment
Dependence on company resources
Dependence on existing business model
Inability to move beyond past successes
Low risk appetite
Level of integration
Short term vs long term results
 Benefits of Intrapreneurship

Identification of opportunities
Attracting entrepreneurial talent
Increased ROI from long range investments
Expansion of business design
Ensuring competitive advantage
 Entrepreneur Vs Intrapreneur

Basis Entrepreneur Intrapreneur

Primary Independence, Corporate rewards

Motive opportunity to create
wealth
Dependency An entrepreneur is But, an Intrapreneur is
independent in his dependent on the
operations entrepreneur
Raising the An entrepreneur himself Funds are not raised by
fund raises funds required for the
the enterprise Intrapreneur
Risk Entrepreneur bears the An Intrapreneur does not
risk involved in the fully bear the risk involved
business in the enterprise
Operation An entrepreneur operates On the contrary, an
from out-side Intrapreneur operates
from within the
organization itself.
Role of Entrepreneurship in Economic Development

 Entrepreneurs play a significant role in economic development

of a country. According to ‘Harbison’ entrepreneurs are prime
movers of innovation & growth. The important roles are:
1. Innovator in economic growth
2. Generation of employment opportunities
3. Complementing and supplementing economic growth
4. Balancing social stability
5. Balanced regional development
6. Export promotion
7. Import substitution
8. Augmenting and meeting local demand
9. Helps to reduce concentration of economic power
10. Establishment of backward and forward linkages
11. Mobilizing resources like finance, peoples money, human
resource, natural resources etc
 Problem of Entrepreneurship

Internal
Choice of an Idea
Faulty Planning
Poor management of enterprise
Marketing
Financial Crunch
Labor Problems
Capacity utilization
Inadequate training and skill
Lack of motivation
Poor coordination among employees
 Problem of Entrepreneurship
External
Infrastructural sickness (location, power, water, communication)
Financial (Capital, working capital, recovery, long term fund, seed
capital, startup capital) {angel investor}
Taxation (Income tax, Sales Tax, Excise, VAT, import duty, LBT etc)
Raw material
Industrial and financial regulation
Inspections
Technology
Government Policy (Bureaucracy)
Administrative Hurdle (eg security)
Corruption
Competitive and volatile environment
Licensing (Inspector Raj)
Gray Markets products (unbilled items)
Secular Country (Holidays)
 Women Entrepreneurship

DEFINITION: Women Entrepreneurs may be

defined as the women or a group of women
who initiate, organize and operate a business
enterprises.
Government of India has defined women
entrepreneurs as an enterprise owned and
controlled by a women having a minimum
financial interest of 51% of the capital and
giving at least 51% of employment generated
in the enterprise to women.
 QUALITIES OF A WOMEN ENTREPRENEUR

Ability to learn quickly from her abilities,

Her persuasiveness- quick learner.
Open style of problem solving.
Willingness to take risks and chances.
Ability to motivate people.
Knowing how to win and lose gracefully
Creative
 Characteristics of Woman Entrepreneur

 Management and Control

 Employment to Women
 Risk-taking
 Good organizer
 Self confidence
 Decision–maker
 Visionary
 Hard worker
 Achievement oriented
 Optimistic
 Technically competent
 Bold and brave
 Mentally sound
 Leadership
FACTORS AFFECTING WOMEN ENTRERENEURSHIP

Economic Independence
Establishing Identity
Motivation
Family Support
Availability Of Funds
Greater Freedom And Mobility
Developing Risk Taking Ability
Building Confidence
 WHY DO WOMEN TAKE-UP EMPLOYMENT?

Push Factors
 Death of bread winner

 Sudden fall in family income

 Permanent inadequacy in income of the family

Pull Factors
 Women’s desire to evaluate their talent
 To utilize their free time or education
 Need and perception of Women’s Liberation, Equity etc.
 To gain recognition, importance and social status.
 To get economic independence
 An urge to do something new
Self-employed entrepreneurs
Rural entrepreneurs
CATEGORIES OF WOMEN ENTREPRENEURS

Women in organized & unorganized sector

Women in traditional & modern industries
Women in urban & rural areas
Women in large scale and small scale
industries.
Single women and joint venture.
 CATEGORIES OF WOMEN
ENTREPRENEURS IN PRACTICE IN
INDIA
First Category – Established in big cities – Having
higher level technical & professional qualifications
– Non traditional Items – Sound financial positions
Second Category – Established in cities and towns –
Having sufficient education – Both traditional and
non traditional items – Undertaking women services
- kindergarten, crèches, beauty parlors, health
clinic etc.
Third Category – Illiterate women – Financially
week – Involved in family business such as
Agriculture, Horticulture, Animal Husbandry, Dairy,
Fisheries, Agro Forestry, Handloom, Pottery etc.
 SOME EXAMPLES

 Shri Mahila Grih Udyog - 7 ladies (President by Jyoti Nayak)

started in 1959: Lizzat Pappad
 Lakme - Simon Tata (step mother to Ratan Tata)
 Herbal Heritage - Ms. Shahnaz Hussain
 Balaji films - Ekta Kapoor
 Naina Lal Kidwai, Investment Banker (HSBC), Fortune
magazine listed her as one of the world’s most powerful
business women in 2003.
 Indra Krishnamurthy Nooyi, chairman and executive officer of
PepsiCo
 Kiran Mazumdar Shaw, CMD, Biocon
 Chanda Kochar, MD ICICI Bank
 Sulajja Firodia Motwani, Kinetic Motors
 Mallika Srinivasan, TAFE (Tractor and Farm Equipment)
 PROBLEMS OF WOMEN ENTREPRENEURS

Dual role to play at workplace & at home place

Subordinate to men: Male dominated society
Being women: De-motivated by society
Non-awareness of facilities provided by government
Competition with large scale units
Problems related to marketing
Financial Problems
Credit Facilities
Problem of Middlemen• Lack of Access to
technology• Lack of self-confidence• Lack of
training
DIRECT & INDIRECT FINANCIAL SUPPORT
 Nationalized banks
 State finance corporation (SFC)
 State industrial development corporation (SIDC)
 District industries centers (DIC)
 Mahila Udyug Nidhi scheme
 Small Industries Development Bank of India
(SIDBI)
 State Small Industrial Development Corporations
(SSIDCs)
 Self Employed Women’s Association (SEWA)
 World Association of Women Entrepreneurs
(WAWE)
 Associated Country Women of the World (ACWW)
 Factors affecting entrepreneurial development

 It is important to know and understand each and every

components of business environment that may affect the
functioning of enterprise or business. These components may be
internal to entrepreneurs or external. Factors that affect
entrepreneurship growth are divided into various groups so that
strategies according to each group of factors can be devised.
These factors are classified into following categories/ groups:
 Economic Factors
 Social Factors
 Psychological Factors
 Government/Political Factors
 Other factors
 All the factors listed above are interconnected and mutually
dependent on each other. No single factor can facilitate the
complete growth of entrepreneurship. For the effective functioning
and speedier growth of entrepreneurship, all the factors must
contribute in positive manner.
 Factors affecting entrepreneurial development…

 Economic factors are those which contribute in the economic

development of the economy. From economic point of view,
these factors create conducive environment for the economic
development of country and also account for the
establishment and development of entrepreneurship.
 These factors actually provide the economic security and
favourable environment to an enterprise. Some of the major
economic factors that affect entrepreneurship growth are
discussed as follow:
 i. Capital
 ii. Labour
 iii. Raw Material
 iv. Market
 Factors affecting entrepreneurial development…

 b. Social Factors
 Social scientists support that economic factors alone are not
sufficient to boost entrepreneurship in any region.
 An entrepreneur can never be successful where society fails.
 Advocates of social theory state that influence of economic
factors on entrepreneurship growth depends on social factors
also.
 Some of the social factors that affect entrepreneurship growth
are discussed here under:
 i. Entrepreneurship Legitimacy
 ii. Social Mobility
 iii. Social Marginality
 Iv.Security
 Factors affecting entrepreneurial development…

 c. Psychological Factors
 Along with economic and social factors psychological factors
also contribute in the growth of entrepreneurship. If an
economy provides best economic environment and society
also supports entrepreneurial endeavour but, if individuals
are not self motivated then all economic and social support
will be wasted. There are various psychological theories of
entrepreneurship which propounded that for
entrepreneurship development positive attitude and
motivation is crucial. Following are the psychological factors
that affect entrepreneurial growth:
 Motivation for high achievement
 Status Respect
 Factors affecting entrepreneurial development…

 d. Government/Political Approach
 All above discussed economic, social and psychological factors
directly or indirectly influenced by the actions of government.
 To achieve the developmental objectives, government through its
various policy initiatives tries to provide congenial environment
to entrepreneurs.
 These policy measures may be in the form of economic policies,
social schemes, and various training programmes.
 Government can facilitate the establishment and growth of
entrepreneurship by creating basic facilities and services to the
entrepreneurship.
 Entrepreneurial growth is affected by various government
actions such as development of special economic zones,
industrial areas, industrial estates, and favourable policy
initiatives.
 Other factors are also influenced by the government actions and
approaches towards entrepreneurship development.
 Factors affecting entrepreneurial development…

 In India, government is trying to provide favourable

entrepreneurial environment by enacting MSMED Act
2006, establishing separate ministry for MSME sector and
by launching various attractive schemes for entrepreneurs.
 If government is not active or least interested in the
economic development of society, no growth in
entrepreneurship will be there.
 e. Other Factors
 Besides economic, social, psychological, and
government/political factors, there are many other
factors that affect the emergence and development of
entrepreneurship. Few of them are discussed below:
 Factors affecting entrepreneurial development…

i. Infrastructural Development

ii. Environmental Scanning
iii. Training
 Entrepreneurial motivation (Mc Clellend’s Achievement
motivation theory)

 McClelland’s need theory is closely associated with learning

theory, because he believed that needs are learned or
acquired by the kinds of events people experience in their
environment and culture.
 He found that people who acquire a particular need behave
differently from those who do not have.His theory focused on
Murray’s three needs: achievement, power, and affiliations.
 In the literature, these three needs are abbreviated as “n
Ach”, “n Pow”, and “n Aff” respectively.
Need for Achievement (“n Ach”):
 This is the drive to excel, to achieve in relation to a set
“standard, and to strive to succeed. In other words, need for
achievement is a Behaviour directed towards competition
with a standard of excellence.
 McClelland found that people with a high need for
achievement perform better than those with a moderate or
low need for achievement, and noted regional, national
Mc Clellend’s Achievement motivation theory…

 Through his research, McClelland identified the

following six characteristics of high need achievers:
 1. High-need achievers have a strong desire to assume
personal responsibilities for performing a task or finding
a solution to a problem.
 2. High need achievers tend to set moderately difficult
goals and take calculated risks.
 3. High need achievers have a strong desire for performance
feedback.
 4. They have need for achievement for attaining personal
accomplishment.
 5. They look for challenging tasks.
 6. The high need-achievement individuals are not buck-passers.
Mc Clellend’s Achievement motivation theory…

 Need for Power (“n Pow”):

 The need for power is concerned with making an impact on
others, the desire to influence others, the urge to change
people, and the desire to make a difference in life.
 People with a high need for power are people who like to be
in control of people and events. These result in ultimate
satisfaction to man.

People who have a high need for power are characterized

by:
 1. A desire to influence and direct somebody else.
 2. A desire to exercise control over others.
 3. A concern for maintaining leaders-follower relations.
Mc Clellend’s Achievement motivation theory…

 Need for Affiliation (“n Aff”):

 The need for affiliation is defined as a desire to establish and
maintain friendly and warm relations with other people. The need
for affiliation, in many ways, is similar to Maslow’s social needs.
 1. They have a strong desire for acceptance and approval from
others.
 2. They tend to conform to the wishes of those people whose
friendship and companionship they value.
 3. They value the feelings of others.

 As regards the above three needs, McClelland holds the

view that all three needs may simultaneously be acting on
an individual. But, in case of an entrepreneur, the high need
for achievement is found dominating one.
 EDP – Top 3 Models:

 Entrepreneurship helps in generating employment

opportunities, earning foreign exchange, and increasing
the total income of a country.
 The development of entrepreneurship requires proper
attention and supervision by the entrepreneur.
 It can be performed efficiently by using various models.
 Schumpeter was the first who introduced the dynamic
model of entrepreneurship.
 The three types of models are discussed as follows:
 Psychological,
 Sociological and
 Population-Ecology Model (PEM)
 1. Psychological Model:
 Psychological model signifies that psychological factors are
responsible for the development of entrepreneurial behavior in
individuals. Need for achievement may be described as the internal
stimulus in an individual that incites him/her to achieve something.
McClelland played a significant role in the identification of factors
responsible for entrepreneurship development.
 He focused on actors (entrepreneurs) rather than the act
(entrepreneurship) in his work on entrepreneurship (1961). In this
model, McClelland in association with D. G. Winter stated that need
for achievement is the prime factor for entrepreneurship
development. He also asserted that a society with a high level of
need for achievement comparatively produces more entrepreneurs.
 After identifying the need for achievement as a prime factor for
entrepreneurship development, he stated that the need of
achievement can be aroused in individuals by increasing their
motivation level. He suggested that motivation can be inculcated in
individuals by rewarding the best performers and generating
interest in excellence.
 McClelland also asserted that motivation-oriented training programs
inspire individuals to take up entrepreneurship as a career and
 2. Sociological Model:
 Sociological model considers societal factors responsible for
the development of entrepreneurial behavior in individuals.
Some entrepreneurship scholars have emphasized the
importance of socio-cultural surrounding in the development
of entrepreneurs.
 They stated that socio-cultural history has accounted for the
development of entrepreneurship and the performance of
entrepreneurial activities. Different societies with differing
interests, attitudes, and systems of arranging people in to
different classes are likely to produce different kinds of
entrepreneurs and different patterns of entrepreneurial
behavior.
 The sociological model given by Frank W. Young is based on
the theory of entrepreneurship, which is based on society’s
system of stratification. The model explains that a sub-
group that has a low status in a larger society leads to
entrepreneurial behavior, if the institutional resources are
provided by the government to the sub-group. The model
 3. Population-Ecology Model (PEM):

 Hannan and Freeman's (1977) population ecology theory hangs on

the assumption that environments can only handle a fixed number of
organizations of each type. After a certain point is reached, there are
diminishing returns to density that eventually balance out through
the mortality of organizations.

 The theory is about the tension between the need to be considered as

legitimate in order to compete, but also the need to be competitive.

 This model considers environment as the important determinant for

the survival of the enterprise rather than individuals with status and
personality traits.

 In addition, it focuses on the presence, characteristics, composition,

and change in a population or in ecological circumstances in a
particular society for developing entrepreneurial activity.
Population-Ecology Model (PEM)…

 As more organizations enter the market, they become

increasingly legitimate, but this leads to greater competition
making survival more challenging. Thus, the early market is
dominated by the need for legitimacy, while the later market is
dominated by competitive forces of selection.
 As environments change, often due to innovations introduced by
organizations within them, mortality rates increase for
organizations experiencing high levels of resistance to change.
 Inertial forces guarantee that most innovations will come from
new entrants and not from incumbents resisting change.
Organizational inertia is caused by a combination of internal
(e.g., sunk costs, impaired managerial cognition, or
organizational culture and history) and external restraints (e.g.,
government regulations, groupthink, or barriers to entry and
exit).
 John Kao’s Conceptual Model
 As shown in the figure, four factors are involved in
entrepreneurship development.
 1. The Person

The individual is the key factor in

entrepreneurial activity.
He is a creative personality and makes things
happen.
Entrepreneur has distinct personality, certain
skills and experience and has motivation.
The success of entrepreneurial venture
depends largely on the personality of the
entrepreneur.
Entrepreneurs requires a variety of skills
ranging from intuition to analytical ability
 The Task & The Environment

 2. The Task: An entrepreneur has to perform several tasks.

First he has to perceive opportunity and then bring together
necessary resources to give life to the idea. He has to provide
the environment.
 3. The Environment: entrepreneur and his organization are
part of the environment.
 The environment influences, facilitates or hinders the growth
of entrepreneurship and the viability of the enterprise.
 He draws resources from the environment, and his output
goes to the environment.
 The environment consists of several elements such as
economic, socio-cultural, political, legal and others.
 The entrepreneurs will keep on acting and reacting to various
environmental changes. He tries to understand the
environment well.
 4. The Organization:

 The entrepreneur builds the organization and his

creative work takes place in it.
 It includes the organization structure, rule, policies,
culture, human resources systems and communication
systems.
 The organization should fit best with personal vision,
with key task to be preformed and with the environment
leadership. His leadership qualities will attract and
retain people with him.
 Entrepreneurship Development Programme

Entrepreneurship development programme is a

programme meant to develop entrepreneurial
abilities among the people.
The concept of entrepreneurship development
programme involves equipping a person with the
required skills and knowledge needed for starting
and running the enterprise.
EDP is an effective way to develop entrepreneurs
which can help in accelerating the pace of socio-
economic development, balanced regional growth,
and exploitation of locally available resources.
 Entrepreneurship Development Programme – Objectives
Entrepreneurship Development Programme (EDP) in India has many objectives.
 The expert group constituted by the NIESBUD accepted that it
must be able to help selected entrepreneurs to:

 (1) Develop and strengthen their entrepreneurial quality/motivation;

 (2) Analyse environment related to small industry and small business;
 (3) Select project/product;
 (4) Formulate projects;
 (5) Understand the process and procedure of setting up of small
enterprise;
 (6) Know and influence the source of help/support needed for launching
the enterprise;
 (7) Acquire the basic management skills;
 8) Know the pros and cons of being an entrepreneur; and
 (9)Acquaint and appreciate the needed social
responsibility/entrepreneurial disciplines.
 Entrepreneurship Development Programme – Need
 Following are the various needs for EDPs:

 (i) Eliminates Poverty and Unemployment

 (ii) Balanced Regional Development and Growth
 (iii) Prevents Industrial Slums
 (iv) Harnessing Locally Available Resources
 (v) Defuses Social Tension
 (vi) Capital Formation
 (viii) Facilitating Overall Development
 EDP – Phases: Pre-Training, Training and Post-Training Phases
 The entrepreneurship development programme
(EDP) normally runs through three important
phases followed by EDP evaluation:
 1. Pre-Training Phase:
 This is a preparatory phase for launching the programme. It is a
planning phase where all requisite arrangements are made to
deliver a content based and useful EDP. This stage lays the
foundation for a strong EDP that can deliver desired results.
 It encompasses:
 i. Identification of promising area having good commercial
prospects.
 ii. Selection of project faculty/course coordinator who is a visionary
and has relevant experience.
 iii. Arrangement of infrastructural facilities for the programme like
location, availability of internet, computers, food and lodging
arrangements (if participants are expected to be from different
cities).
 Pre-Training Phase…

 iv. Conducting industrial survey/environmental

scanning for identification of good business
opportunities.
 v. Designing the course contents.
 vi. Getting support from various agencies such as
DICs, SFCs, SISI etc.
 vii. Advertising and publicity of EDP to reach
prospective minds. Promotional campaigns through
either with the help of print or electric media,
leaflets, posters, etc.
 viii. Selection of participants for the training
program.
 2. Training Phase:

 Training phase of EDP includes:

 i. Management:
 They should be taught basic principles of management and their
applications in real life scenarios to realise the benefits and
significance of the management functions like planning, organizing,
staffing, directing, controlling and coordinating. The various
techniques involved in the management process must be explained.
The trainer can use case studies, management games, role- plays
and simulations to polish the skills acquired by the trainees.
 ii. Technical Competence:
 Focus should be laid upon acquiring technical competence suitable
to the area selected. Industry experts may be called upon to share
their experiences. It’s important for the trainees to understand the
basics of technology, rate of technological change in that industry
and challenges ahead. A comparative analysis of present state of
technology in developed and developing nations may be relevant at
this stage.
 2. Training Phase:

2. Training Phase…

 iii. Motivation and Stress Management:

 The entrepreneurial training programs are designed to
elevate and sustain the motivation levels of the trainees.
 Stress management is an important component of EDPs as
entrepreneurs have to struggle through different phases
before finally getting results.
 They should be taught stress management techniques and
should also be counseled to hold-on to their beliefs and ideas.
The importance of family members need to highlighted here.
 3. Post Training or Follow-up Phase:

 Post training support services are rendered to the

participants who have successfully completed the
entrepreneurship.
 This phase may comprise of the following steps:
 (i) Assistance in registration of the enterprise.
 (ii) Loan procedures and documentation.
 (iii) Facilitating infrastructure like land, plant layout,
purchase of plant and machinery, power connection etc.
 (iv) Securing subsidies and grants and utilizing incentives
given by Centre and State government.
 (v) Management consultancy and trouble shooting.
 (vi) Providing up-to-date information on the industry.
 (vii) Meeting with EDP organizers and participants.
 Important Questions – Unit 1
Q.1. “The entrepreneur is an economic agent who left the economic
resources of an area of lower productivity to an area of higher
productivity and greater yield.” Comment.
Q.2. What do you understand by entrepreneurship? Explain the
characteristics and functions of an entrepreneur.
Q.3. What are the different basis for classification of
entrepreneurship?
Q.4. Give a brief account of various theories of entrepreneurship in
detail.
Q.5. Explain the barriers to entrepreneurship, especially in the
context of India.
Q.6. Who is an Intrapreneur? Differentiate between Entrepreneur
and Intrapreneur.
Q.7. Differentiate between Entrepreneur and Manager.
Q.8. Describe the evolution of entrepreneurship from ancient times
to current era.
Thanks